The chief operating officer of online mortgage marketplace HashChing has suggested that the royal commission’s finding that lenders do not scrutinise broker applications is a mark of their trust in the broking profession.
During the first round of hearing for the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, ANZ revealed that it was reliant on the validity of general expense claims provided by brokers when determining a borrower’s suitability for a home loan.
The senior counsel assisting, Rowena Orr, then warned: “I want to put to you that your processes, or your lack of processes in relation to the verification of a customer’s expenses, are non-compliant with the National Credit Act, responsible lending obligations and with this regulatory guide issued by ASIC.”
Since then, several major banks, including Westpac, have revealed that they, too, rely on “information provided by customers to intermediaries to satisfy its responsible lending obligations”.
Speaking to The Adviser about this finding, HashChing COO Siobhan Hayden said: “My interpretation of what ANZ and CBA have identified is that they do little to no additional checks for broker-introduced loans.
“This clearly demonstrates the confidence that they place in that channel and the robustness with which brokers actually apply to the consumer’s application and the preparation of it.”
She added: “Nearly 60 per cent of flow is broker-introduced and the majors get a reasonable size of that because of the status of the major banks and the fact that they have done little to no additional work on those files.
“The fact that we’re in an environment of really low arrears and defaults and no systemic issues speaks volumes, in my opinion, regarding the current professionalism in our market.”
Ms Hayden went on to outline that lenders will increasingly need to look to innovative technical solutions in the future to ensure that consumer creditworthiness is validated.
She added that HashChing has already begun rolling out a new system that automates the borrower credit check process for brokers.
The HashChing COO told The Adviser: “What we have introduced and integrated into the assessment of a customer is scraping that data for 183 days and providing that to the broker in a very clear format for them to genuinely see what is happening, rather than the traditional process which is to ask the customer for all that information and analyse it. So, this can now be done in a matter of minutes.
“So, what that provides the broker is the information to provide more insight into what the customer is doing and the ability to dig deeper. So, it’s making the broker efficient, it’s providing a seamless experience for the customer to give across to the broker the information or paperwork required, and it means we can look at the expense in a genuine format.”
Ms Hayden added that the system is not only faster but also more secure than the traditional format of having a borrower email documents to the broker.
“It’s a four-step process that is done very quickly and it’s a far more secure portal than the traditional method of sending documents via email.”
Ms Hayden concluded: “What our focus is, at all times at HashChing, is finding the right things to support the consumer and provide transparency, which has been a key point of the commissions.
“So, we are integrating tools that allow customers to do that quickly and easily and provide that information quickly to brokers so that they are able to do their job in a more robust fashion.”
[Related: ANZ accused of non-compliance with NCCP]