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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


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BFCSA: NAB shrugs off concerns, keen on mortgage broking high pressure sales

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NAB shrugs off concerns, keen on mortgage broking

Australian Financial Review Jul 11 2018 8:30 PM

Joyce Moullakis


National Australia Bank is committed to retaining ownership of its mortgage broking units, despite increased controversy and regulatory scrutiny around commission payments, according to sources.

The Australian Financial Review understands that while NAB's ownership of broker groups has been a talking point internally in recent months, the bank is – for now – comfortable with holding onto them.

The bank's businesses include white labelling arm Advantedge, and aggregators FAST, Choice and PLAN Australia. 

A NAB spokesperson declined to comment on the bank's position, pointing only to chief executive Andrew Thorburn's separate announcement in May about the divestment of MLC, including advice, platform, superannuation and asset management businesses.

At the same time, NAB said it would retain JBWere and its nabtrade online trading platform.

NAB's interim results showed a reliance, like many of its peers, on home loans from the broking channel.

For the six months ended March 31, $102.8 billion in mortgages were sourced from brokers and Advantedge compared to $104.2 billion from the retail bank and digital arm UBank. About $90.6 billion over the same period came from the business and private bank channels.

Amid fierce debate about whether brokers act in the best interests of their customers, the NAB presentation highlighted that all loan applications from that channel were assessed centrally.

It also said all brokers had to be licensed and accredited and that the bank conducts broker level monitoring using "specific review" triggers like delinquency thresholds.

Commonwealth Bank of Australia is, however, taking a different view to NAB on ownership of mortgage brokers.

CBA last month unveiled that it would create a new demerged business, named CFS Group, which will include several divisions that are tipped to be hit by the fallout of the financial services royal commission.

The demerged entity will house CBA's $135 billion wealth manager Colonial First State, $207 billion Colonial First State Global Asset Management, financial planning units Count Financial, Financial Wisdom, mortgage broking business Aussie Home Loans and minority stakes in listed group's Mortgage Choice and CountPlus.

"That whole [mortgage broking] industry is changing substantially," said Arnhem Investment Management's managing partner Mark Nathan.

He also noted that while the contribution to NAB's profit from mortgage broking and white labelling of home loans was small, "a lot of risk" remained in the industry due to the threat of technology disruption and risks to commission structures.

Macquarie Group also owns stakes in mortgage broking companies including aggregator Connective and online mortgage broker Lendi.

But questions have been raised about its commitment to the industry after Macquarie sold down its holding in ASX-listed AFG in 2016 and this year reduced its holding in Mark Bouris-led Yellow Brick Road.

Macquarie now owns less than 5 per cent of Yellow Brick Road.

Westpac Banking Corp's exposure to the industry includes a majority stake in digital mortgage broking platform Uno.

Mortgage brokers typically earn an upfront commission for introducing a customer to a lender and a trail commission, with both payments being based on the loan balance. The trail commission tends to be paid monthly, but is calculated annually over the time the mortgage stays with that institution.

The royal commission has this year uncovered poor practices by some parts of the mortgage broking industry, despite it opening up the market to greater competition and consumer choice over the past 15 years.

In March, ANZ Banking Group's executive general manager home loans and retail lending William Ranken testified that the bank did not check the accuracy ofinformation provided by brokers about their customers' living expenses.

CBA was last year among lenders that announced measures to tighten their grip on mortgage brokers. The bank introduced new minimum education standards, as well as criteria for professional development and on-the-job experience.

A comprehensive review of the industry by the Australian Securities and Investments Commission, released last year, found that broker originated loans were typically larger than bank-introduced loans. It also came to the view the industry's standard model of upfront and trail commissions created "conflicts of interest".


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