When I pored through the findings from the Royal Commission, my heart sank when I read the recommendations in relation to the mortgage broking industry. If adopted (which is not guaranteed), the recommendations will wreak havoc on the entire industry and undoubtedly see many small mortgage broking businesses fold. It is also very bad news for consumers and, in my view, a huge win to the banks. I strongly believe it is a terrible policy.
The mortgage broking industry has grown over the last 20 years and, overall, this has meant that consumers are better off. The broking industry has created a fluid market with borrowers far more inclined to move between lenders. This has led to increased competition; banks have created more innovative and flexible products, second tier lenders have found niche’s in the market and provided loans for those who previously were unable to qualify. The broking industry has created a much more even playing field between borrower and lender.