Royal commission - Please sign to petition to keep brokers in the market

[JusyApples]

Ahh Ok got it so you guys are basically the same as car dealers when it is going good it is all you and the service you provide.... When it goes to grap hey sorry pal its not us blame Toyota (or insert other manufacturer of your choice)

I don’t think you have a clue.


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[hawks667]

I've had a quick look around to find a Housing Expenditure Metric calculator online but cannot see one,
any links?

Subscribers to HEM are not allowed to share the "drop in tables" but as rockrat has provided, some reasonable comparison sites are around.

[chester ver2.0]

I don’t think you have a clue.


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And i think you had a great run with an all care but no responsibility operating model, a commission structure that could not possibly provide any sort of end consumer transparency and now your having a whine that the party is over.

[JusyApples]

And i think you had a great run with an all care but no responsibility operating model, a commission structure that could not possibly provide any sort of end consumer transparency and now your having a whine that the party is over.

Every inaccuracy I have pointed out you have not been able to respond.

Let’s be clear here, my income is not derived from mortgage broking. Not even close. So saying I’m having a whine because the party is over is another inaccurate statement.


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[tryagain]

I think it's a case of an industry that could do with a bit of regulation but no use throwing the baby out with the bathwater, maybe standardise the commissions in a way that so there is no financial incentive for Brokers to sign you up with who suits them best as opposed to the client and a few other measures. It would seem that getting rid of brokers would push more people the way of the big banks, who were the focus of the Royal Commission in the first place.

I remember when Labor introduced the Australian Charities and Not for Profits Commission (as much as a swipe at religious institutions as for policy purposes), it required a lot more paperwork on behalf of those it covered, but it also weeded out the dodgy ones like the Shane Warne Foundation. When the Coalition got back in they thought about disbanding the ACNC but, due to it getting rid of the dodgy operators it had bought some more credibility to the not for profit industry and therefore the industry was generally happy for it to stay in spite of the additional reporting requirements.

I am normally a fan of small Gov, but if the banking/mortgage broking industry hasn't succeeded in addressing the dodgy practices by some, it's probably a good time for some gov regulation. It will probably result in more work for those involved and it harder to get a loan but a better reputation for the industry.

[trevc]

I worked in the finance industry for 15 years - brokers are massively conflicted by commisions - not saying they're not good people or care about client outcomes.

[Apples69]

Rock rat - I'm in the industry. I do all facets of lending including Agribusiness. I complete about three in ten loans referred to me. With the other seven I spend my time giving free advice on how to better their position and what they need to do to better their position.
I do considerable amount of work with Agri clients who have hit bad times - some I can help some I help work through selling up.

I read in an earlier post about clawback and the broker doing a crap assessment. That's pretty disappointing statement as some people use and abuse the experience of the broker to get what they want then sell and clear debts within 12 months. One example is I completed a rural deal that settled in December. People were in strife and by restructuring and doing a few different things got them back on the straight and narrow. 3 months to do deal. I've been informed they are now selling the property ( no way in the world would they sell it last year when I was doing the work). When they sell the bank will clawback my payment.

The he outcome of the Royal Commission is disappointing as there had been three independent reviews into Broker remuneration leading up to the RC. One by ASIC, one by Productivity Commission and one by Treasury . All said it was a good way to be paid and brought in competition.
Not one broker or broker body was interviewed by Mr Haynes during the RC. However he did hang a lot on CBA comments ( worst offender of all the Banks) on what we were paid. When you hear the words assume in a RC and accepted as gospel is very disappointing.

Banks will increase rates under the disguise of cost of funds and they quickly did it in 2009 when they shut out brokers after the GFC. Also the banks in 2017 rammed up rates on all investment property loans when APRA wanted to slow down lending in Sydney and Melbiurne. Why not just lift them on new loans.

Anyway time will tell as Commen sense is certainly not prevailing.
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[briann532]

I'm far from an expert on the subject, but being self employed I have a lot of trouble getting finance.
I pay all my bills as soon as I get them and I only borrow money for property or on the business for vehicles.

Even though I have been good with money and never had any trouble, I am still considered a high risk and banks won't touch me.
Enter - BROKER!!!

Without brokers, I would be renting and way behind where I am.
The broker I deal with has a good understanding of what goes on and that is his job, not mine.

For that reason alone, they have my support.

Yes, there are cowboys and unscrupulous dealers out there, but that happens in everything and every industry.
Adani, CBA, AGL. yep, no, they're fine, they always act above board and do the right thing.......
Looks at all the corruption in state rail.
So yes, some brokers are sharks, but in my personal experience the ones I have dealt with have been great.
Car dealers. The same. Some good some bad.
Politicians, the same. Shyte sorry, I stand corrected..... All bad!!!! 

[WilSurf]

Thanks to the Royal Commission I have to go through many hoops to re-finance our property.
We are renovating our kitchen and want to increase our mortgage to pay for it.
The house is worth almost double of the mortgage required, but man, how difficult is it.
We always pay fortnightly what I need to pay monthly, always pay off my credit card each month in full.
Never a debt or late payment.

After sending in lots of requested paperwork, they now want a written confirmation from the ATO noting that no further funds are outstanding.

Arrrggghhhhh.

[Bigfish]

Thanks to the Royal Commission I have to go through many hoops to re-finance our property.
We are renovating our kitchen and want to increase our mortgage to pay for it.
The house is worth almost double of the mortgage required, but man, how difficult is it.
We always pay fortnightly what I need to pay monthly, always pay off my credit card each month in full.
Never a debt or late payment.

After sending in lots of requested paperwork, they now want a written confirmation from the ATO noting that no further funds are outstanding.

Arrrggghhhhh.

If only everybody had to go through the same process and scrutiny before they were given approval for an "x" amount loan there would be a hell of a lot less bankruptcies and , house losses and suicides. One of lifes biggest decisions is buying a house and a time when you need to have all the financial aspects in order. The way brokers, banks, mortgage loan sharks and other greedy bastards screwed with peoples lives hopefully sees the pricks die a painful death..karma.  Better to be very, very sure that your future is rosy than being given a load of bullShit that sees your dream become a nightmare further down the track. 

[krisandkev]

Yea. Bank wants to give you a million and you blindly say yes. Too stupid to take your own responsibility, no must be banks fault naturally. And now people are blaming the banks for credit shortage and drop in house prices in Sydney and Melbourne?  Kevin

[Bird]

wait until rates go up 2% then watch the suicide rate skyrocket. Theres people so close to not making payments now... let alone if it ever went back up to 17% of the 70/80's or when ever it was

[GeoffA]

wait until rates go up 2% then watch the suicide rate skyrocket. Theres people so close to not making payments now... let alone if it ever went back up to 17% of the 70/80's or when ever it was

Late '80's....

[JusyApples]

wait until rates go up 2% then watch the suicide rate skyrocket. Theres people so close to not making payments now... let alone if it ever went back up to 17% of the 70/80's or when ever it was

Also a lot of people don’t want to make sacrifices to make life easier. They want the holidays, the cars, the Foxtel, the big TV etc etc they rather lose their house then their iPhones


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[Rumpig]

Thanks to the Royal Commission I have to go through many hoops to re-finance our property.
We are renovating our kitchen and want to increase our mortgage to pay for it.
The house is worth almost double of the mortgage required, but man, how difficult is it.
We always pay fortnightly what I need to pay monthly, always pay off my credit card each month in full.
Never a debt or late payment.

After sending in lots of requested paperwork, they now want a written confirmation from the ATO noting that no further funds are outstanding.

Arrrggghhhhh.

yet I can redraw $60K on our home loan in the space of a month, all done online and not really dealt with a single bank employee / anyone at all (think from memory we got an email questioning it)...scary how easy it was to do that.

[Pete79]

And it only took a 5 minute phone call with our bank to get our house re-evaluated.
I rang and said I’m changing banks, the new bank has valued our house $80,000 higher then you have and we’re leaving. Lady on the phone says hold the line, 5 seconds later she comes back and says we can match that and redid our loan on the spot.

We where not changing banks and did not have another evaluation. I just picked up the phone and tried my luck with a total BS story.

Nothing wrong with that industry.....

[WilSurf]

Yea. Bank wants to give you a million and you blindly say yes. Too stupid to take your own responsibility, no must be banks fault naturally. And now people are blaming the banks for credit shortage and drop in house prices in Sydney and Melbourne?  Kevin

Sorry, I don't follow your thinking.
They are not giving me a million and i haven't said yes.
I am taking responsibility of my own, repaying everything over and more than what I have to.
I know there are people who had a too high mortgage because they wanted to live the dream without having the means.
We have the means and are not overspending.

[Bird]

Also a lot of people don’t want to make sacrifices to make life easier. They want the holidays, the cars, the Foxtel, the big TV etc etc they rather lose their house then their iPhones

AGREE

[krisandkev]

Sorry, I don't follow your thinking.
They are not giving me a million and i haven't said yes.
I am taking responsibility of my own, repaying everything over and more than what I have to.
I know there are people who had a too high mortgage because they wanted to live the dream without having the means.
We have the means and are not overspending.

My comments were not directed at you so please do not take any offence by them. It was directed at those who told the inquiry that a bank loaned them a amount that they had no way of managing the repayments. I think we all have stories of bank offers but we look at what we can afford now and if there are interest rises. Then we make our choice.  Kevin

[macca]

Late '80's....

Yeah, hard to forget if you went thru it, aye Geoff

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[Kangaron]

I recall mates telling me I was stupid to lock in for 3 years at 13.5.
One of my better decisions.

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[rags]

Yeah, hard to forget if you went thru it, aye Geoff

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I had a loan on my first property ( a unit in Sydney North) at an interest rate of 18% and another loan for the land we had purchase in the blue mountains in 1989 at19% as that loan was considered an investment loan.

 I had to sell the unit to get some cash to build a home on our land as bank wouldn't lend for a "pile of bricks and timber" to build a house. Being forced to build with cash was a great outcome, it cost me about $38k to build the house as an owner builder.

At the same time my brother had a loan locked in at the 13% rate as that was taken out at some point, I'm guessing before 1986, as 1986 was when I bought the unit.
It was some banking law change that I think the Keating Govt made that restricted interest rates to 13% if taken out before a certain date and loans after that were considered variable.

Work out well for us as it set us on the way in life but was tough to at the time, but our needs were simpler then ( I did still have my 4WD).
The house I built for $38k cost mean another $150k to extend about 15 years later.
It was a sad day when we sold but the reward eased the pain somewhat.

Although the interest rates made life tuff, I do think it was still easier back then in comparison to what our kids are faced with.

[Paddler Ed]

As an economist, I have to disagree with what you are all saying re the interest rates in the 1980s. Whilst they were high in the 1980s, that was only the nominal rate - the real rate was much lower:



It's an older chart from this ABC article https://www.abc.net.au/news/2007-08-08/the-reality-of-interest-rates/2525330, but it shows that once inflation was taken into account, the rate wasn't as bad as it was made out.

Compare that to now, when any pay rise is generally around 1-2%, you are actually going backwards once inflation is taken into account (if it remains within the RBAs 2-3% target (https://www.rba.gov.au/education/resources/explainers/australias-inflation-target.html))

Just something to think about...

There is also a similar argument around the Quantitative Easing that has been undertaken in Europe and the USA, and how that has impacted on house prices and the affordability challenge - and this is actually perceived to be a bigger problem than the higher interest rates of the 1980s. https://www.bbc.com/news/business-47458921 Why is this important? Well, if you're a Baby Boomer, who is going to buy your house that is worth $500,000? The Millennial in 5 years time might not be able to having never got on the property ladder, especially in a capital city - so is the house really worth $500,000, or even the $250,000 that you have as a mortgage/loans secured on it?

[chester ver2.0]

My comments were not directed at you so please do not take any offence by them. It was directed at those who told the inquiry that a bank loaned them a amount that they had no way of managing the repayments. I think we all have stories of bank offers but we look at what we can afford now and if there are interest rises. Then we make our choice.  Kevin

I agree with you above there the guys i really felt for in the commission hearings were the farmer types that the bank just suddenly revalued their property and then sent a nice letter saying you now have to pay X more to make up for it