Strength in numbers

Linked Mortgage Managers is a national initiative that aims to help like-minded, established mortgage managers get a better deal from funders, primarily by approaching funders as one, larger entity.

Mr Nunziante Losanno, of Canberra-based mortgage manager Oracle Home Loans, said part of the motivation for Linked Mortgage Managers - which he has helped develop - was to give smaller mortgage managers the opportunity to gain more clout in an industry dominated by banks.

Many of these smaller organisations are “unloved and unknown”, he added.

That some large mortgage managers have been able to generate solid volumes gave Mr Losanno the inspiration to believe that, by coming together, smaller mortgage managers could also build and maintain even stronger businesses.  

Accessing funding though isn’t necessarily the main issue for smaller mortgage managers, he said. While Mr Losanno said his own business offers a comprehensive service – “we have a full range of products and features, offset, redraw, construction, interest only [products] that are competitively priced without a pro-pack fee” – there are some “quirks” with funders that mean having more lending options can help a mortgage manager.

“The quirks may relate to policy, maximum loan size, lenders’ mortgage insurance requirements due to security or structure, and maximum number of securities in a complex, for example,” he said.

“They are not common but they require you have options available when they do come up.”

Mr Losanno added that rather than smaller mortgage managers not getting noticed by not having large lending volumes, “the issue is more how much more you can get done if you are noticed through volume”.

“Moreover, if you have the volume, you can create products in conjunction with the funders for markets you’re trying to target,” he said.

One area where smaller mortgage managers may be missing out is the increasingly lucrative SMSF market. While Mr Losanno admits he hasn’t asked his funders about the prospect of obtaining these products, he said it’s obvious a mortgage manager settling around $300 million a year is likely to have a better chance of getting access to more products in this market segment.

“We provide a service that tends to be missing a lot these days,” he said. “The best way to describe it is we’re similar to what country bank managers used to be like. We know our customers and what’s going on. We’re not promising the world to clients and then having someone else deliver the service. We have to back up words with action for the life of the loan.”

He added that mortgage managers also help 'keep the bastards honest', pointing out the impact that John Symond had in the mid-1990s when he questioned some of the lending practices at the time. This included an additional levy of one per cent for investment loans, and pro-packs that were only available to specific professionals.