YBR hits back at another damning report about brokers

Major mortgage and wealth franchise Yellow Brick Road (YBR) has dismissed another condemning report about mortgage brokers in the mainstream media.

A column in the Herald Sun over the weekend again linked mortgage brokers to financial planners – and the financial planning crisis which has rocked that industry – and claimed brokers are “up to their eyeballs” in “murky backhand commissions and sweetheart deals” from the major banks.

“Mortgage broker, financial planner, financial planner, mortgage broker, hmmm, same same,” the column read.

However, the CEO of lending at YBR, Tim Brown has said it is an ignorant comparison.

“Comparing mortgage brokers to financial planners is like comparing apples to oranges. The system is transparent with all commissions declared in the credit proposal given to the clients,” he told Australian Broker.

“The Yellow Brick Road Group currently has over 35 lenders on the panel and all are used at different times depending on rate or product feature, commission does not even come into play when making sure the client gets the right product.”

Brown also responded to claims in the Herald Sun that there’s “little chance” of a broker recommending a loan from an independent lender outside of the big four. 

“The big four have a pricing advantage over the smaller lenders because of scale. As an industry we have raised this with the Government and they have advised us they are happy with the competitive landscape of home loans.

“The Yellow Brick Road Group generally averages 25-30% of our loans written outside the big 4 banks providing increased competition to a variety of choice for consumers.”

According to data from YBR, home loans directed to the major banks and their subsidiaries by YBR mortgage brokers decreased in March, comprising 69% of all loans settled. Loans directed to independent lenders outside of the big four and their subsidiaries increased to 31%. 

Finally, Brown refuted claims by the Herald Sun columnist that loans organised through mortgage brokers have a higher default rate than other types of loans.

“We have yet to see any proof that substantiates the claim of higher arrears through mortgage brokers. The data we receive from lenders consistently shows us otherwise. Regardless, the banks make the credit decisions, not mortgage brokers,” Brown told Australian Broker.

This comes after the Australian Financial Review published a report claiming the standards in the mortgage broking industry continue to lag those in other sectors. This prompted both the MFAA and FBAA to correct these claims and defend brokers.

Article from : Australian Broker

Branson unites with brokers down under

Business magnate and founder of the Virgin Group, Richard Branson, will meet with brokers in Sydney today to formally launch Virgin Money Australia (VMA).

The event, attended by an intimate group of PLAN brokers and VMA team members, marks the official launch of Virgin Money’s home loan business.

Bank of Queensland (BOQ) acquired exclusive rights to the VMA brand for 40 years in April 2013 and announced its plans to relaunch mortgages through VMA in March 2015.

Last month, VMA unveiled its brand new mortgage product, the Reward Me Home Loan, to be distributed exclusively through the third-party channel initially, beginning with PLAN brokers. Virgin Money in the UK does 80% of its lending through the third-party channel. 

Branson will educate and entertain brokers with a Q&A session, and will be joined by VMA CEO Greg Boyle, VMA head of distribution Adrian Cunningham and PLAN CEO Phil Quin-Conroy, who will also be giving presentations.

The Reward Me Home Loan will include an array of Virgin-branded benefits, including frequent flyer programs and offers from Virgin Australia, Virgin Mobile, Virgin Wines and Virgin Active. 

It is expected interest rates will be announced today.

More to come.

Article from : Australian Broker