Resimac removes clawbacks on Specialist products

The Specialist products are designed for customers who don’t traditionally fall into the standard credit guidelines and are an option prior to transitioning into a Prime lending product.

This includes clients who are credit impaired, non-standard income earner, and shorter-term self-employed. Additionally, the products apply to clients in need of debt consolidation for Australian Taxation Office (ATO), private, and/or solicitor debt.

However, the non-bank lender has said that the current clawback calculation and policy will remain for all other products, as well as Specialist products settled prior to the new policy’s commencement date.

This change complements the increased upfront and trail commissions offered to mortgage brokers on Resimac's Prime Alt Doc and Specialist loans.

Indeed, the non-bank lender announced in March 2023 that the new commission rates changed from 0.65 per cent for upfront to 0.75 per cent, while trail commissions changed from 0.15 per cent to 0.2 per cent.

Speaking to The Adviser, Resimac's general manager, distribution & marketing, Chris Paterson, said: "On specialist loans in particular, customers are looking to transition into a prime loan as quickly as possible."

"[The reason] we removed clawbacks is if the customer is looking for a prime loan within the clawback period, the broker doesn’t lose.

"We wanted to have the broker not be impacted by the client looking for a prime option if they leave Resimac," Paterson said.

Paterson further stated that customers will get a broker's help with a Specialist mortgage and then refinance to a prime loan as soon as they can.

"This isn’t a great outcome for the broker, whose up-front commission gets clawed back if this happened within the first two years.

“Our strategy is to offer a diversified product range to support brokers.

"Data shows more customers are turning to brokers to find product solutions that suit their needs, if they’re Specialist customer looking to transition to Prime, they can do this at Resimac, or without the broker being penalised with clawback," he added.

The latest on clawbacks

Resimac is the latest non-bank lender to remove or reduce clawbacks on certain products.

In August last year, non-bank lender Better Choice announced the removal of all clawbacks for brokers in order to assist brokers wanting to diversify into commercial lending.

More recently in October 2023, mortgage manager Rate Money reduced clawbacks for its brokers on its Think money product line for loans up to $2.5 million, while also removing application and valuation fees.

Furthermore, NAB revealed in November 2023 that it is in the process of reviewing its position on clawbacks; however, an update to brokers has yet to be provided.

However, former NAB chief executive Ross McEwan said while the major bank was reviewing its clawback policy, any wishes to abolish the clawback structure as a whole could likely result in a reduction in upfronts.

Meanwhile, other major lenders have also revised their clawback policies over the last year, with Westpac dropping down to an 18-month clawback period and the Commonwealth Bank of Australia (CBA) moving towards a staged clawback approach after 12 months.

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