As part of a decision that has been welcomed by mortgage brokers throughout Australia, the coalition government announced Tuesday night that new loan commissions would no longer be prohibited in Australia. 2020.
Instead, things will go on as usual, with the Council of Financial Regulators and the Australian Competition and Consumer Commission reviewing the process in three years.
This decision was motivated by the view that mortgage brokers are helpful in generating good results for consumers, said Treasurer Josh Frydenberg.
"The government wants to see more mortgage brokers, not less. [They are] absolutely critical about the mortgage market, "Frydenberg said in a press release.
The mortgage lending industry had encountered a large-scale problem in the original plan to ban commissions. She asked about the benefits for the consumer of implementing this proposal.
"The trailer commission for mortgage brokers is deeply misunderstood and is often confused with outstanding commissions earned by other financial service providers," explained Mike Felton, managing director of Mortgage & Mortgage. Finance Association of Australia (MFAA).
"However, the trail is a contingent income that is paid to a broker only if the loan is not past due, is not refinanced and does not involve fraud. It is an important control mechanism that aligns the interests of brokers and their clients. "
Susan Mitchell, CEO of Mortgage Choice, added that the mortgage market would have been negatively impacted by the removal of trail commissions.
"All Australian borrowers attach paramount importance to competition in the credit market. The proof is the proof in [our] the figures relating to residential regulations, which show that over the past two years, the four major banks lost 10% of their market share to less important lenders » , pointed out Mitchell
.
"We believe that maintaining the trail commission will ensure a strong mortgage brokerage industry."
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