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MFAA Prosper : Mortgage and Finance Brief 07
COSL has urged lenders and mortgage managers to be mindful that many borrowers will experience financial difficulties as a result of the Queensland floods. Raj Venga, the Credit Ombudsman, says, "Flood- affected borrowers may otherwise find themselves in default of their loan and incurring default fees and enforcement expenses. Borrowers should also consider approaching financial counselling services and community and consumer credit legal centres. These are services that are at no cost to consumers. "If the lender is a member of the Credit Ombudsman Service and has declined or not responded to a request for a hardship variation, the borrower should refer this to us without delay. "If the lender declines an application for financial hardship relief in circumstances where it should be granted, we can direct the lender to vary the loan payments in the appropriate circumstances. "Our experience to date suggests that our lender members and mortgage managers are prepared to genuinely consider requests for payment variations." COSL warns of f lood hardship Banks donate to flood victims Commonwealth Bank has donated $1m to the Queensland flood appeal, to assist those affected by the disaster. Ian Saines, Group Executive Institutional Banking & Markets says, "As time passes, it becomes more evident that an enormous amount of assistance is required and I am pleased to announce the Bank's additional support for the people of Queensland." Westpac, meanwhile, has also committed to providing at least $400,000, and has put together a relief package that offers practical help by deferring some loan repayments and waiving fees. ASIC following up licence applications ASIC had received almost 6,800 credit licence applications up to 12 January, with 2,900 licences being granted. Over 1,000 of these applications were received in the last week of December. Many applicants are now receiving follow-up enquiries from ASIC regarding documentation. NSW had the highest number of licences granted, 1,017, while the Northern Territory had the lowest, 7. Claire Wivell Plater of Gold Seal Risk Management, which produces Broker Manuals containing all the required NCCP policies and procedures, says the company has had numerous calls from brokers concerned about the enquiries ASIC is making. "Typically the enquiries relate to monitoring of loan writers, arrangements for monitoring compliance, training management arrangements and adequacy of responsible managers," she says. Consumers set to switch Research shows that up to 1m Australian mortgage holders could be set to switch their mortgage to another financial institution. The research, by CoreData, found 23% of people were considering changing their mortgage provider, compared with 4% this time last year. The new National Consumer Credit Protection (NCCP) Act and its licensing laws will be the greatest challenge this year, according to a Mortgage & Finance Brief straw poll of brokers. "It's a different way of doing things," Cronulla-based Mortgage Choice franchisee Ben Herden says. "We have no choice but to embrace it. "All brokers will be audited under the new system, and I have no doubt ASIC will make an example of brokers who repeatedly do the wrong thing. "The next 12 months are going to be a telling time for individual broker businesses. Those who can get this right will prosper." Justin Delanty, the Director of Lending4U in Devonport, Tasmania, also thinks the new regulations will be the main challenge, and that additional time and resources will need to be devoted to compliance. "We are looking at more diversification strategies, broadening our distribution network and enhancing our fee-for- service model so we can handle these additional overheads," he says. Steve Kane, CEO of national aggregator FAST, believes brokers are now moving into advice-based relationship management with clients, so the new NCCP obligations will only bring more professionalism to their businesses. He says FAST was committed to helping its broker partners maximise any new opportunities arising from the regulations, including diversification into risk-based products and enhanced white label opportunities. Choice Aggregation Services CEO Stephen Moore says brokers mustn't overlook the importance of service. "Those brokers who have embraced the new legislative processes and are providing a superior service offering to their clients via cross-sell and CRM strategies will see the most success over the next 12 months," he says. NCCP: greatest challenge for 2011 16 | Mortgage & Finance brief News
Mortgage and Finance Brief 06
Mortgage and Finance Brief 08