The independence of mortgage brokers will be under threat in coming months, after the bigger banks joined into a new policy dictating a minimum limit to the number of loans expected for approval, penalising those that fail to meet this number through "re-accreditation" classes costing up to $500.
The Australian has reported that Commonwealth Bank contacted 8000 brokers, informing each that they will be required to submit a minimum of 4 home loan applications as well as settling a minimum of 3 loans within a 6-month period, in order to to continue being accredited from July 1.
Westpac has also launched a similar scheme, with a minimum of 1 loan application required every six months.
Wayne Ormond - Refund Home Loans executive chairman, said these conditions may reduce home loans options for customers.
"It would be valid for consumers to ask: if a broker is recommending a CBA loan, is that the best loan, or is it being recommended so the broker won't lose his accreditation?" he said.
Brokers that fail to comply with the limits set by Westpac will be forced to pay $150 to attend re-accreditation workshops.
Banks have cut portions of their profit margins for a long time in home lending to mortgage brokers, originating over 35% of home loans.
But the banks are now looking to improve efficiency levels in their dealings with brokers, in part by reducing the number of brokers and focussing more on the high-volume originators.
National Australia Bank has launched a rating system that ranks brokers based on a number of factors, including the quality of loans submitted. ANZ Bank has introduced no minimum performance levels.
The new changes are expected to cause the number of registered brokers to fall by up to 25% from the current 13,500.
Senior corporate affairs manager for Mortgage Choice Kristy Sheppard, has welcomed the move, claiming it will push aside the non performing brokers and those that inadequate knowledge of the products they offer.
Written by Sam Gooch
