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MFAA Prosper : Mortgage and Finance Brief 09
The MFA A has called on government to implement the recommendations on mortgage exit fees made by the Senate Economics Committee. The Committee recommended the government should allow a proper assessment of the November 2010 ASIC guidelines on exit fees before banning them. “ The Committee heard the submissions and formed the view that banning exit fees would hurt small mortgage lenders,” said MFAA CEO Phil Naylor. “ It was small and non-bank lenders who made mortgages so competitive in the decade to 2006. “ We call on the government to implement these recommendations.“ NSW/ACT council has appointed Jeremy Fisher of 1st Street and Michael Adams of Advance Investment Securities Australia to fill two casual vacancies. WA council has appointed Rose De Rossi from Diversifi to fill a casual vacancy. Fred Obeido of Proforma Financial Solutions has been appointed to the NSW/ACT state council, while in Victoria, Barrie Henman has been named as President and Paul Filippone as Vice President/ Treasurer. The Victorian Equipment & Commercial Finance Committee is co-chaired by Glenn Mitchell and Peter Schroeder. Two new councillors have been appointed for SA/NT – Andrew Harrison, the Principal of Ask Harry Home Loans, and Gerald Jones, Franchise Support Manager, Refund Home Loans. Welcome to all new council and committee members. Senate Committee on Exit Fees praised by MFAA Changes to state councils The MFA A continues to inform Treasury and ASIC regarding what may be considered unintended consequences flowing from the NCCP. One such issue is what has become known as 'elder discrimination'. It seemed that some were asserting that responsible lending requirements would force lenders to negatively discriminate against 'older' borrowers. MFA A argued that this was not the case and sought clarity from ASIC. On 31 March ASIC updated its Regulatory Guide 209 Credit licensing: Responsible lending conduct, which provides more clarity for lenders when assessing a borrower's capacity to repay. ASIC Commissioner Peter Boxall said that they received reports of older borrowers being refused loans because "... some lenders appeared to be adopting an unnecessarily restrictive approach to meeting the responsible lending requirements. Undertaking the range of enquiries required by the legislation will often reveal other ways that they will be able to repay the loan." He went on to say that the responsible lending requirements "... should not be an inflexible barrier to credit for any segment of the population, and should not prevent consumers [from] obtaining credit that they can reasonably afford." 'Elder discrimination' clarification Unsolicited sales The Competition and Consumer Act 2010 (the Act) regulates unsolicited consumer agreements, including door-to-door sales, and there is also reciprocal state legislation. For brokers this means that the Act will have a very major impact on those brokers who charge borrowers a fee (or commission) of more than $100 and use marketing methods that result in captured sales. These brokers will need to comply with the Act and they must not lodge an application with any lender until after the cooling off period has expired. The sale will be an "unsolicited consumer agreement" and therefore captured by the Act if all of the following tests are satisfied: • the sale is made over the telephone, or in the physical presence of the customer at any place except the broker's office; and • the telephone call or the visit is unsolicited (i.e, it is unsolicited if it is the result of an initial cold call, even if that cold call is the result of a referral); and • the purchaser is not entering the transaction in connection with a business carried on by the purchaser, which means that only sales for primarily private or personal purposes will be regulated. * For further information see Part 8 of the All-in-One guide dated 23 March 2011, in the Members Only Legal & Compliance Section of our website. Mor tgage & Finance brief | 13 MFAA news
Mortgage and Finance Brief 08
Mortgage and Finance Brief 10