The government’s decision to ban deferred establishment fees could ultimately help the non-bank sector snare a greater share of the mortgage market, one industry stakeholder has claimed.
Speaking to The Adviser, intouch Home Loans chief executive Paul Ryan said while non-banks vehemently opposed the DEF ban while it was in draft form, now that it has become law, the sector has welcomed the changes with open arms.
“It never made sense to me why the government, who wanted to support and create competition, would ask those brining competition to the market to change their business models,” Mr Ryan said.
“Of course, now that the ban has come into play, we have embraced it. The whole non-bank sector has embraced it. The big thing the DEF ban does is it removes all barriers. There is no deterrent now to recommending non-bank products. We are all on the same playing field.”
“Actually, it gives us more reasons to talk to our brokers and borrowers.”
After months of discussions with industry stakeholders, the government decided to officially ban all deferred establishment fees from 1 July 2011.
And according to Homeloans’ general manager third party distribution Tony Carn, the decision was the right one.
Mr Carn said the deferred establishment fee ban had really given the non-bank lenders a leg up in the mortgage market.
“If you have strength and scope in the market place, then the ban works in your favour,” he said.
“It has put us on a level playing field with the majors and made us and our products a more attractive option to brokers and their borrowers.”