The non-conforming loan market has rebounded strongly following the global financial crisis.
According to the 2011 Pepper Broker Report, non-conforming loans accounted for 9 per cent of all loans written in 2010 by brokers surveyed – or approximately 25,300 loans.
The report also unveiled that 56 per cent of brokers expect the non-conforming loan market to grow in the year ahead on the back of “tighter lending criteria”.
But despite the increasing popularity of non-conforming loans, there is only a relatively small number of brokers actively writting business in this market, suggesting there is untapped potential here for the third party distribution channel.
Pepper chief operating officer David Holmes said it was up to lenders to educate brokers about the array of non-conforming products available.
“It is encouraging to see such a strong return to health for the non-conforming loan market following the GFC. Pepper has long viewed the sector as an important growth area for the business and the 2010-2011 Broker Report has confirmed our assumptions that there is a huge amount of untapped potential here” he said.
“Pepper is at the forefront of the specialist loan market and throughout 2011 we are making a significant investment in working with brokers to grow the sector. The recent hire of Mario Rehayem as director of sales for Pepper will provide greater support to our broker partners. Later this year we will also unveil a new technology platform that will help brokers to more easily research and write specialist loans for their customers, speeding up processing times. Both moves will ensure Pepper is perfectly placed to support brokers in driving growth of non-conforming loans in Australia.”