Australian Broker 18.24

DECEMBER 2021 ISSUE 18.24

YEAR IN REVIEW The pandemic has battered the economy for nearly two years, but it also helped drive a property boom. Twelve industry leaders share their thoughts on 2021 – and what 2022 might offer /14 ALSO IN THIS ISSUE… Big deal How Better Choice helped a Morgan Brooks client out of a tricky situation /24 Real estate market analysis Boss Money’s Tom Uhlich says house prices have outpaced wage growth /26 BNK Banking Corp picks interim CEO Broker channel favourite Allan Savins is appointed as BNK’s interim CEO /04

Housing prices predicted to fall by 2023 ANZ forecasts property price growth to slow in 2022, then drop by 4% the next year /10

New tech tools to speed up loans Simpology CEO Kate Gubbins says digital innovations will help lenders, brokers /30

In the hot seat Bloom Capital’s Rachel Farrell is named as a leading broker to watch /34

NEW: 62-DAY LOAN FOR ANY PURPOSE Short-term finance in 3-5 days $70,000+ No financials or income assessment Personal or business use Caveat, 1st or 2nd mortgage

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NEWS

IN THIS SECTION

Lenders Allan Savins appointed interim CEO of BNK banking division /04

Aggregators Most affordable suburbs revealed

by Aussie Home Loans survey /06

Market ANZ predicts Australia’s property prices will start falling in 2023 /10

Industry bodies FBAA enjoys best financial year, growing membership /12

GLOBAL WATCH What’s happening in the mortgage, broking and banking world in the United States and Canada? Here’s your snapshot of the news that matters most in North America

U.S. MORTGAGE DEFAULT RISK RISES AS REFI BOOM NEARS END lifetime default risk of US-backed mortgages rose in the second quarter of 2021 as less risky refinance loans continued to dwindle, according to the Milliman Mortgage Default Index (MMDI). Rising interest rates led to an increase in purchase loans, as refinances – which are typically viewed as lower-risk – decreased over the quarter. According to the Mortgage Bankers Association’s latest survey, the refi share of mortgage activity dropped from 63.5% to 62.9% as the 30-year fixed mortgage rate climbed to 3.1%.

“We’ve been seeing default risk climb throughout the first half of 2021, driven primarily by increased economic and borrower risk for new purchase loans,” said MMDI author Jonathan Glowacki. The default risk for purchase and refinance mortgages backed by Fannie Mae and Freddie Mac increased from 1.20% to 1.48%.

THE

STEADY SALES OF EXISTING HOMES IN U.S. DESPITE HEADWINDS of existing homes have held steady in the US despite insufficient supply along with affordability challenges, according to the National Association of Realtors’ latest report. Total existing home sales grew by 0.8% from September 2021 to a seasonally adjusted annual rate of 6.43 million in October, marking two consecutive months of growth. However, home resales were 5.8% slower than last year’s rate of 6.73 million.

“It was positive news that home sales increased for the second month in a row and at the fastest pace of sales since January 2021,” said Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Bankers Association (MBA). “Similar to MBA’s recent weekly data on purchase mortgage applications, home sales are still running below last year’s elevated pace but have shown some renewed strength recently.”

SALES

www.brokernews.com.au DECEMBER 2021 EDITORIAL

SALES & MARKETING

Editor Antony Field

Publisher/Sales Manager Simon Kerslake

News Editor Mike Wood

CORPORATE

Production Editor Roslyn Meredith

Chief Executive Officer Mike Shipley

ART & PRODUCTION

Chief Operating Officer George Walmsley

Designer Cess Rodriguez Production Manager Alicia Chin Customer Success Manager Andi Zbojniewicz

Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

sector observer Rob McLister predicts the Canadian housing market will MORTGAGE be more volatile in 2022. This is particularly apparent when taking into account the degree of overvaluation in Canada, McLister said. Citing data from the National Bank, he noted that the total value of Canadian real estate was roughly 500% higher than national disposable income as of Q2, compared to the average of 300% seen before the Bank of Canada’s recent rate-hike cycles. “Almost no other country in the world [compares to that ratio],” McLister said. “When you get that all-important leg on the table – which is interest rates – being kicked out next year, couple that potentially with some more tightening by regulators and a higher potential mortgage qualifying rate, it raises a lot of questions about real estate next year.”

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08/12/2021 11:05:58 am

A network that celebrates you

“

With the support of the experienced LNS team, you can build your own business with confidence. You’ll enjoy all the benefits of our strong network community while being recognised as an individual.

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Alan, motorbike fanatic

Sandra, holiday lover

... PS, and when I’m not helping you build your business, I’m cheering on the Renegades in the BBL. Get on Red! Brendan O’Donnell Managing Director, Liberty Network Services

Dedicated broker and avid runner.

Whether she’s running laps of her suburb or doing the legwork for first home buyers – as a Liberty Adviser and avid runner, Anna Nicolazzo is always willing to go the extra mile. She takes the time to guide customers through each step of the lending journey to help them get financial. Keep putting your best foot forward, Anna!

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We’re more than just an aggregator, because you’re more than just a mortgage broker.

To find out more about becoming a Liberty Adviser, visit liberty.com.au/LNS. Liberty Network Services Pty Ltd ABN 65 151 158 628 Australian Credit Licence 408042.

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08/12/2021 11:06:15 am

NEWS

LENDERS ROYDEN MOULA JOINS D’VAZPANEL TAKESATON KEY AGGREGATOR BROKER ROLE FAST AT MKM lender MKM has appointed Royden D’Vaz as its new head of distribution. Based in Perth, D’Vaz brings 25 years of experience to the role. He previously headed up WA operations at aggregator Loan Market and at NAB, and held a national role at Bluestone. “[This opportunity] is well aligned with my extensive experience in accelerating growth in the non-bank sector, as well as overseeing industry relationships and broker initiatives,” D’Vaz said.

NON-BANK

NAB JOINS E-LODGEMENT NETWORK AT SYMPLI disruptor Sympli has added NAB to its network, and the bank’s property transactions can now take place on the platform. It’s a major milestone for Sympli, which wants to compete with dominant e-conveyancer PEXA. “NAB becoming part of our network and allowing us to support their customers is massive. It opens up a lot of the market, and to help them with their transactions as a customer is also a really important milestone,” said Sympli CEO Philip Joyce.

E-LODGEMENT

“Allan Savins is a highly experienced finance industry professional who has distinguished himself in the sector for the past three decades” Don Koch Chairman, BNK Banking Corporation

Allan Savins, interim CEO, BNK Banking Corporation

ALLAN SAVINS NAMED AS INTERIM CEO OF BNK BANKING DIVISION BNK, which includes aggregator Finsure and non-bank lender Better Choice, has appointed broker favourite Allan Savins as interim CEO following Brett Morgan’s departure channel favourite Allan Savins is to take on the role of interim CEO of BNK Banking Corporation, replacing Brett Morgan, who resigned in October to take up a role at MyState Bank.

Savins has over 35 years’ experience in the financial services industry and was previously general manager, banking and wholesale at BNK, as well as executive director at Better Choice Home Loans.

The news, announced to the ASX on 17 November, will be welcomed by the broker channel as Savins has been a well-known and BROKER

admired industry figure for many years. He will take up his new role on 17 December, pending regulatory approval.

“Allan is a highly experienced finance industry professional who has distinguished himself in the sector for the past three decades,” said BNK chairman Don Koch.

“Since joining BNK during the merger with Finsure three years ago, Allan has made a significant contribution to the BNK Group as part of his role as general manager, banking and wholesale.

“Prior to BNK, Allan was employed by Resimac Limited where he held senior executive

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roles such as chief operating officer, chief commercial officer and director of Resimac New Zealand Home Loans. He was also the chairman of Finsure from launch to December 2015. We look forward to his ongoing contribution to BNK Group.”

It has been a successful financial year for BNK Bank, which posted a 44% rise in profits for an NPAT of $7.1m, as well as for Better Choice and Finsure.

Better Choice has transformed from a mortgage manager to a non-bank lender on the back of a $500m investment by Goldman Sachs and a $250m warehouse program with Bendigo and Adelaide Bank.

Finsure settled $22.2bn in FY21, a 42% increase on the previous financial year, helped in large part by a 15% rise in broker numbers, and 24.5% growth in its loan book to $56.6bn.

Melbourne (03) 9225 5189 Sydney (02) 9239 3144 Adelaide (08) 8408 0800

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08/12/2021 11:06:53 am

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08/12/2021 11:07:49 am

NEWS

A G G R E G AT O R S MONEYQUEST PURCHASES BUYERS CHOICE has bought out Buyers Choice, adding the boutique aggregator to its existing franchise business. All Buyers Choice staff will be retained, and CEO Brett Mansfield will stay in his post and head up the aggregation part of the business. “We are confident that both businesses will offer something of value to the other, with both sets of brokers benefiting from a sharpened value proposition,” said MoneyQuest CEO Michael Russell.

“We can now offer brokers a fully supported franchise operation or subaggregation business.”

MONEYQUEST

AFG SIGNS OPEN BANKING DEAL WITH FROLLO AFG has partnered with fintech Frollo, giving brokers the chance to speed up their loan applications via open banking. Brokers who use AFG will gain access to Frollo’s Consumer Data Right capabilities, which will allow them to access customer data more quickly from a range of lenders and data holders. Frollo is an accredited data recipient (ADR), so it can obtain data from different providers and collate it for brokers.

Under the new partnership with AFG, Frollo will help the aggregator attain ADR status.

AGGREGATOR

“We wanted to show homebuyers that there are still opportunities to get into the property market if you expand your suburb search” Brad Cramb CEO of distribution, Aussie Home Loans

Commercial Loans

Brad Cramb, CEO of distribution, Aussie Home Loans

AUSSIE UNCOVERS MOST AFFORDABLE SUBURBS FOR BUYING PROPERTY New Aussie Home Loans research shows that homebuyers who want to get a foothold in Australia’s expensive property market need to look outside the box broker franchise network Aussie Home Loans has revealed the nation’s most affordable suburbs in which to buy a property.

Partnering with CoreLogic, which provided comprehensive property price data, Aussie identified more than 3,960 suburbs across Australia where homebuyers could potentially purchase a house with a 10% or 20% deposit of $100,000.

Aussie’s Suburb Spotter Map also identified over 1,900 suburbs where units could be bought for a deposit of less than $100,000.

LEADING

“With rising property prices and recent changes to lending criteria from APRA creating some concerns around housing affordability, we wanted to show homebuyers that there are still opportunities to get into the property market if you expand your suburb search and adapt your thinking around how you might structure your home loan,” said Aussie CEO of distribution Brad Cramb.

“You don’t always need to have a 20% deposit to buy a home. There are 5% and 10% home loan options where you can have a guarantor, access government support such as the First Home Loan Deposit Scheme, or pay lenders mortgage

insurance, which could form part of your home loan option.”

Cramb said nearly one in five borrowers (19%) had secured a home loan with LMI in the past 12 months, which has helped them enter the property market sooner.

“Some banks and lenders even offer LMI discounts or special offers, and for some professions they can also waive LMI,” he added.

On Aussie’s Suburb Spotter map the top three viewed suburbs for a median house deposit of under $100,000 are the outer Melbourne suburb of Heidelberg West (10%: $75,000), followed by Box Hill (10%: $61,150) in Sydney’s west and Footscray (10%: $94,075) in Melbourne’s inner west.

The top three viewed suburbs for units with a median deposit of under $100,000 are Melbourne (20%: $85,350) and Hawthorn (10%: $60,749.95) in Victoria, and Lakemba (20%: $76,500) in southwest Sydney.

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08/12/2021 11:08:04 am

THE BANK BEHIND THE BROKER we’re not satisfied until your clients are

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08/12/2021 11:08:16 am

BUSINESS UPDATE

DEMAND SOARS FOR SMALL BUSINESS LENDING

Roberto Sanz, National Sales Manager at fintech Prospa, believes now is the perfect time for brokers and accountants to diversify into small business lending as the end-of-year period coincides with a surge in business resilience and recovery

Roberto Sanz, National Sales Manager, Prospa

the end of the year almost upon us, it’s likely you are looking forward to some well-deserved down time.

But many of your self-employed clients are coming out of the pandemic with big plans for the coming year. And whether they’re currently ramping up for a busy holiday season or wondering how to stretch their cash flow through the lean and quiet times in January, it seems that at this time of year small business owners could do with some extra support.

Research conducted by RFi Group and Australian fintech lender Prospa reveals that demand for commercial financing is surging across Australia – a fact reinforced by Prospa National Sales Manager Roberto Sanz.

“The research found that one in every three Australian small businesses is looking to get funds in the next six to 12 months to cover asset and equipment purchases and to fund digital transformation or additional inventory as they emerge WITH

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from lockdown,” says Sanz.

Beau Bertoli, Prospa Co-founder and Chief Revenue Officer, shares Sanz’s optimism.

“The Australian Bureau of Statistics reports that the number of businesses in Australia increased by 3.8% in 2020–21, which is the biggest increase we’ve seen in three years.

That firmly points to a resilient economy and the return of business confidence.”

It appears that getting access to funding is the vital piece of the puzzle, with 87% of SMEs reporting they would miss opportunities without access to capital. Sanz says brokers and accountants can play an integral role in helping their clients get access to funds if they diversify into business lending.

“With business confidence increasing and demand for funds on an upward trajectory as business owners prepare to put their plans into action, now is the time to act,” he says, pointing out that he and his team at Prospa

Beau Bertoli, Co-founder and Chief Revenue Officer, Prospa

are ready to help brokers recognise opportunities and find solutions that work.

Partnering with a specialist business lender such as Prospa can not only open the door to whole new array of opportunities in the broking business model.

Sanz believes it is also an important move for mortgage brokers looking to strengthen relationships by offering more to their existing clients.

Experience dictates that starting the conversation is the first step, and he suggests simply reaching out to self-employed clients to ask about their plans for the next 12 months and discuss how they are currently funding their businesses.

“It really is as simple as opening the door and letting them know you are there to help,” Sanz says. “Prospa supports partners with a suite of flexible products designed for the needs of small business, plus direct access to credit teams, white label marketing to help grow their

business, and a business team which is on hand to discuss scenarios and options.”

And he says all this ensures partners and their clients feel confident and supported.

Regular client offers, such as Prospa’s current end-of-year offer of no repayments for the first eight weeks on business loans settled by 31 December 2021, also help to support businesses by providing some breathing space for them while they put the funds to use.

“As a partner-led business we customise our partnerships with our brokers,” says Sanz. “We work how they want to work. They can apply online on behalf of their client or simply call or email the Prospa team and then be involved as much or as little as they like – but they’ll always be able to track the application in real time.”

If you’re interested in learning more about the opportunities offered by diversification into business lending, contact Prospa on partners@prospa.com or call the team on 1300 964 808. AB

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08/12/2021 11:08:27 am

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23/03/2020 08/12/2021 11:08:369:24 am AM

NEWS

MARKET DIVIDED VIEWS ON WHEN IT’S TIME TO LEAVE NEST are children expected to move out of home? Bankwest’s survey of 1,800 Australians has parents and children divided on the answer, with results linked to housing affordability. Parents expect children to move out by age 23, while children want to stay at home until they are 27.

“The reasons behind the significant difference in expectations is likely one of genuine affordability consideration for younger Australians aspiring to own their own home,” said Bankwest general manager of homebuying Peter Bouhlas.

WHEN

MORE BROKERS DECIDING TO REMAIN IN ROLES broker channel is looking strong going into 2022, according to Nick Young, managing director of loan book buyer Trail Homes. Young had sounded the alarm about a higher than average number of brokers selling up due to the impacts of COVID-19 and regulation. “Now, what we have seen is a settling down … people who are in now appear to be more committed; they’ve been through it and [were] forced to make changes … they’ve taken the opportunity to revisit how they run their businesses.”

THE

ANZ senior economists Felicity Emmett (left) and Adelaide Timbrell

ANZ PREDICTS SLOWDOWN IN HOUSING BOOM, PRICE FALLS BY 2023 A new report from major bank ANZ shows the double-digit increase in property prices won’t continue in 2022 – and by 2023 prices will begin to fall has predicted that the housing market boom will last until the end of next year before falling early in 2023.

The major bank released research from its independent economic team last month suggesting that the 20% plus year-on-year price growth experienced in 2021 will slow to just 6% in 2022 and then drop 4% in 2023.

The Australia’s Housing Rolling Over report, written by senior ANZ economists Felicity Emmett and Adelaide Timbrell, revealed that concerns over housing affordability, increasing interest rates and a rise in supply via new ANZ

listings will cause prices to flatten out and then drop slightly.

“House price growth looks likely to peak in November or December 2021 at just above 21%,” Emmett and Timbrell said in the report.

“This would be the strongest growth since the late 1980s boom.

But a slowdown is in sight, with tighter credit, rising fixed mortgage rates and a large increase in stock on the market combined with decreased affordability all set to dampen price growth in 2022.

“In 2023, we see prices falling modestly as higher fixed rates really start to bite.”

Emmett and Timbrell said that

while affordability constraints and a better supply-demand balance would help slow the market, the path of interest rates would be critical.

“We see the RBA on hold until H1 2023, but fixed mortgage rates are already rising. A faster-thanexpected rise increases the risk that prices slow more than we currently expect. And vice versa.”

The pair also predicted the accompanying construction boom would also likely taper off, with the end-of-government stimulus the key driver of the decrease.

“We expect housing construction to grow close to 13% this year, with further gains in H1 2022, before activity brought forward by government incentives starts to dry up,” they said.

“Once that pipeline dries up, construction activity looks set to decline, although the rise in apartment approvals should cushion the fall.”

“House price growth looks likely to peak in November or December 2021 at just above 21%. In 2023, we see prices falling modestly” Felicity Emmett and Adelaide Timbrell Senior economists, ANZ

HOUSING FINANCE PAST ITS PEAK Monthly housing finance, excluding refinances

Source: ABS, Macrobond, ANZ Research (Australia’s Housing Rolling Over report, 18 Nov 2021)

$17.5bn Owneroccupiers, ex-FHBs

$15.0bn $12.5bn

Investors

$10.0bn

First home buyers

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08/12/2021 11:08:49 am

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08/12/2021 11:09:08 am

NEWS

INDUSTRY BODIES MFAA MEMBERSHIP CLIMBS TO 14,000 BROKERS MFAA has just clocked up 14,000 members, reflecting exceptional growth for one of the main peak bodies in mortgages and finance.

“As finance broking continues the transition from an industry to a profession, education and professional standards become increasingly important, so it’s encouraging to see so many brokers embracing the higher industry standards offered by the MFAA,” said CEO Mike Felton. The MFAA’s record membership further strengthened its ability to strongly advocate for the industry, he added.

THE

SCAMMERS IN AUSTRALIA HAVE 25% HIT RATE – STUDY by the Customer-Owned RESEARCH Banking Association has revealed that eight in 10 people in Australia have been approached by a cybercriminal in the past two years, and 25% did what was asked of them.

The findings – based on an Essential Research poll of 1,094 people – investigated the scams that ask people to click on a link, and hand over bank or credit card details or send money or goods. COBA CEO Michael Lawrence said there had been a significant increase in financial crimes targeting customers during the pandemic.

“We’ve always been a grassroots organisation run by brokers for brokers, and I believe that’s why everyone within the FBAA always works tirelessly for members” Peter White Managing director, FBAA

Peter White, managing director, FBAA

FBAA REPORTS STRONG GROWTH, BEST FINANCIAL YEAR ON RECORD The FBAA is celebrating after the broker organisation revealed outstanding financial results and growing membership at its AGM FBAA has announced its best financial results in history as well as significant growth in its membership over the 2020/21 financial year.

Speaking at the AGM, Peter White, the FBAA’s managing director, said the association had recorded net assets of $1.8m and net retained earnings of $769,000 in FY21.

He said the result would enable the FBAA to continue to invest in members at even higher levels than in the past.

“This was achieved with no government COVID stimulus, no increase in membership fees for three years, no redundancies or removal of staff, and no reduction THE

or terminations in any supplier contracts,” White said.

The FBAA also reported net growth of 10.78% in its membership – most of whom are customer-facing brokers – as it passed the 9,400 count in October.

White said the outstanding results were a testament to good governance and a focus on member support and benefits.

“We’ve always been a grassroots organisation run by brokers for brokers, and I believe that’s why everyone within the FBAA always works tirelessly for members.

We all know the challenges of the industry and are all directly affected by the highs and lows.”

The FBAA thanked current board members, while welcoming on to the board Barry Honey and former NSW state president Nick Wormald.

Two directors were farewelled – Gus Gilkeson, who stepped down due to business needs, and Chris Szigeti, who has completed his term.

Board commendations went out to Gilkeson, former NSW president and past board member who has since retired from his positions; Glenn Mitchell of Vow YBR Group, who represents the FBAA committee; Nick Lane, FBAA finance manager, who takes the association’s professional reporting abilities to a higher level; Leah Renwick, a long-serving FBAA staff member who prioritises member needs above all else; and Judith Hocking, FBAA staff member, who constantly provides a high level of service to members of the association.

NEW FELLOW MEMBERS OF FBAA The FBAA has appointed as fellow members: Greg Rodgers, external legal counsel – for many years of expert service to the FBAA for legal advice. Rodgers sits on the DRS Committee as a volunteer and continues to provide expert guidance John Kolenda, managing director of the Finsure Group – for his support of the directions of the FBAA and its Concierge Program and the endeavours of the strategic direction of the FBAA Gerald Foley, managing director of nMB – for his very long service to the industry and support of the FBAA and its undertakings to industry Renee Blethyn, head of broker partnerships, NextGen.Net – for her support and work with the FBAA’s mental health counselling program and ongoing mental health events, and for the mental health wellbeing of our industry and being prepared to be a voice in this space David Hannah, general manager McMillan Shakespeare Group – for his long-term support and input into the asset broking sector and for his contributions to the FBAA in that field

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08/12/2021 11:10:45 am

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08/12/2021 11:13:13 am

FE AT URES

YE AR IN RE VIE W

LOOKING BACK AT 2021 The shadow of the pandemic has loomed over the Australian economy for a second year. Australian Broker talks to 12 financial services industry leaders, who reflect on the challenges and achievements of 2021 and share their expectations for the year ahead in the mortgage finance industry have barely been able to catch their breath this year, having been buffeted again by the fierce winds of COVID-19.

Widespread lockdowns and closed borders hurt small businesses, employment, education and construction. But federal and state government financial support mitigated the worst impacts, helping many workers and businesses stay afloat.

The property market boomed, with prices surging more than 20% nationally. Increased demand was fuelled by record-low interest rates. This was great news for brokers and lenders as clients sought loan options to fund their property goals.

Technology, mergers and acquisitions, open banking, industry regulation and diversification were important trends in 2021.

Australian Broker asked 12 industry leaders about the issues that shaped the year and what they believed 2022 would bring.

PEOPLE

COVID-19 Liberty group sales manager John Mohnacheff says the learnings from 2020 served the financial sector incredibly well this year.

“While no one expected the year to bring such uncertainty, the industry has remained as resilient as ever,” he says.

One of the most notable changes brought about by COVID that the non-bank specialist lender has seen is the increased demand for flexible lending.

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“For some lenders, this served as a catalyst for greater innovation, but specialist lending is something Liberty has offered for nearly 25 years,” Mohnacheff says. “And, with extensive experience in this space, our unique business model has enabled us to help business partners support customers with a range of complex needs.”

He says the pandemic has affected the Liberty community in many

Barry Saoud, general manager mortgages and commercial lending, Pepper Money

“If we can avoid any major hiccups, there is significant opportunity for brokers to support those looking to ramp up their existing businesses or perhaps

“We’ve witnessed record growth in the alternative and non-conforming space, and all signs point towards this remaining strong” Barry Saoud, Pepper Money ways, requiring ongoing effort to continue to provide “the standard of service that our brokers and customers need”.

“With our head office located in Melbourne, early lockdowns taught us many important lessons about how best to navigate these challenging circumstances.

We know that a one-size-fits-all approach simply doesn’t work, but by exercising compassion, flexibility and innovation we continue to grow stronger as a business and as a brand.”

Mohnacheff says while the unemployment rate is higher than desired due to ongoing lockdowns, there are signs of a promising return as we head into the holidays.

explore new avenues,” he says.

“Let’s not forget, with months of delayed purchases and investments in certain parts of the country, there is now likely to be an influx of customers eager to make up for lost time; whether it’s a new home, a new vehicle or even a major holiday, customers are ready to get back to their regular lives and are seeking funds to take the next steps.”

Susan Mitchell, CEO of Mortgage Choice, says the biggest change has been “increasing capacity within our respective businesses to manage the unforeseen record levels of mortgage activity”.

“The broking industry has invested heavily in technology, and it’s making broking platforms

more efficient as well as improving customer experiences,” she says.

“It’s also never been easier for customers to communicate and work with their broker. For example, normalising digital signatures might seem like a small advancement during the pandemic, but the efficiency and time gained for brokers will be enormous.”

Mitchell says when the pandemic took hold in 2020, initial reactions were survivalist, but it soon became clear it was a time when customers would need brokers the most.

“The discussion soon turned to how do we – as an entire group – manage the overwhelming demand.

“Throw in the acquisition by REA Group, as well as combining the Mortgage Choice and Smartline businesses, and there’s been a lot of change for every stakeholder over the past 24 months.

“What I have learnt most is that to meet the challenges in our foreverchanging world, you have to be constantly communicating with your network. Listen to their concerns and ideas, and let them know when and why you’re taking action.”

One of the biggest challenges is lender turnaround times, says Mitchell.

“It’s absolutely critical that our support staff and brokers are across the details because it will impact

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TWO BANKS SLASH INTEREST RATES DESPITE WIDESPREAD RISES Despite the current trend of lenders raising interest rates, two lenders have decided to slash their rates in a play for the key refinancing market. Fintech UBank has taken 0.1 off its three-year fixed rate, with owner-occupiers with lower than 80% LVR now paying as little as 1.85%. Bank of us, one of the biggest banks in Tasmania, will offer its customers 1.79% on a one-year fixed rate home loan.

CBA RAISES INTEREST RATES IN KEY ASSESSMENT CRITERIA CBA has changed its Home Loan Assessment Floor Rate, raising it 15 points to 5.25% p.a. Its interest rate buffer will not change and has been fixed at 2.50% p.a. CBA put the move down to a reassessment of home loan affordability in the sector. The Home Loan Assessment Floor Rate is the method by which CBA and other banks assess the ability of customers to repay a loan.

John Mohnacheff, group sales manager, Liberty

customers’ decisions. An informed broker makes all the difference when it comes to customers feeling in control and confident in their decision-making.”

La Trobe Financial senior vice president and chief lending officer Cory Bannister says 2021 will long be remembered as being a time of uncertainty, complexity and challenge.

“Where there is complexity and uncertainty there is often opportunity; and particularly for non-bank lenders, along with brokers, that has certainly been the case,” says Bannister.

expected brokers would receive a major boost on the back of COVID, and that’s what happened, with brokers writing a record $78bn in the June quarter of 2021 alone – a 50% increase year-on-year.

He says these “tailwinds” for non-banks and brokers were blowing well before COVID, when the major banks simplified their strategies and vacated the “complex credit” space after the banking royal commission.

“However, there are a number of segments of the lending landscape that have been left with little support or credit availability at a critical

“While no one expected the year to bring such uncertainty, the industry has remained as resilient as ever” John Monhacheff, Liberty “And that’s because non-banks are ideally suited to providing credit appropriately throughout this period, due to the custom nature of our credit assessments and our willingness to take the time to fully understand a customer’s unique position and then provide an appropriate tailored solution.”

Bannister says La Trobe Financial

time for the Australian economy.

This includes SMEs in particular.

“This gap is now being filled in part by non-banks, which are all stepping in to fill the void for customers that would ordinarily be taken up by the major banks.”

Bannister says he doesn’t see this trend reversing any time soon, given that non-banks represent just 5%

HOW THE COLLAPSE OF EVERGRANDE COULD IMPACT AUSTRALIA’S PROPERTY MARKET The impending collapse of Evergrande, the second-biggest property developer in China, has spooked markets in Australia and beyond, with fears that our property sector could feel the shockwaves.

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of Australia’s total lending market compared to about 20% pre-GFC. Mike Felton, CEO of the MFAA, says 2021 presented many challenges, and “our industry’s resilience and flexibility helped us rise above them again”.

“Brokers’ adaptability to change and focus on customers proved once again to be the keys to success over the past year as our industry remained agile in the face of COVIDrelated process changes and the commencement of the single biggest legislative change our industry has faced in more than 10 years: the best interests duty,” Felton says.

“I’m very proud to say we have also remained true to the customer-first ethos that sets our industry apart.

Brokers continued to put customers first at a time when Australians

really needed them.”

Felton says this resilience and commitment produced incredible broker market share results – the latest figures show 66.9% or two thirds of all new residential home loans were written by brokers.

“The fact that we achieved our highest market share result to date during a year when customers were under so much pressure, approval times were very challenging and new regulations were implemented is inspirational.”

When COVID first hit, says NextGen.Net head of broker partnerships Renee Blethyn, the leading fintech moved its ApplyOnline user training online to educate the broker network on the latest digital tools to help them keep working. www.brokernews.com.au

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Phil Waugh, executive – broker distribution, NAB

“We hosted webinars every month; in FY21 we trained more than 7,000 brokers online. In 2022, we’re going to keep our monthly online training going, but we also plan to continue to support both brokers and lenders through partnered training sessions to raise awareness of new ApplyOnline services,” Blethyn says.

Peter Vala, general manager partnerships and distribution at Thinktank, says that despite another disrupted COVID year, the efforts of the lender’s team and the support of its broker network enabled Thinktank to record a very busy and successful 2021.

“The learnings and changes implemented through 2020, from significant technological advancements to flexible working arrangements and agile policy adjustments, provided us with the tools to respond effectively to the many obstacles we all faced again in 2021, resulting in further significant growth in broker engagement and lending volumes,” Vala says.

“We were not alone in our ability to ride the bumps of the last two years, and it is pleasing to see the lending industry as a whole continuing to remain strong and gain momentum.”

Vala says one of the biggest challenges for SMEs and the self16

employed was lockdowns affecting their ability to trade.

“They may have experienced lower trading, no trading at all, or even the opposite with a spike in trading. Because of this, historical financial information may not present a fair reflection of current and future performance.”

This is where Thinktank’s Mid Doc loan product comes in.

It relies on a self-certification declaration and one other form of support, such as two BAS or six-month loan statements or an accountant’s letter.

Vala says the impact of COVID on some SMEs and the self-employed may not be fully realised until the later part of 2022.

“We expect a number of businesses may be facing various finance covenant compliance issues, even though they may not have defaulted on their facilities. For this reason, it is critical brokers remain close with their clients that have annual reviews due over the 2022 year.”

Clinton Arentz is the head of lending and property assets at non-bank lender Trilogy Funds.

“Despite the pressures and constraints caused by the pandemic, throughout 2020 and 2021 we continued to write new construction loans across the residential, industrial and commercial property

sectors, and continued to pay all drawdowns for existing clients as required,” he says.

Growth in the property market has been record-breaking in spite of lockdowns, financial stimulus, interstate migration and strong prices, Arentz says.

He believes brokers need to be across the major challenges in property development.

“While property prices are appreciating strongly, some supply chain interruptions as well as rising construction costs have presented a new construction landscape for property developers to navigate.”

Developers need to carefully review their building contingencies, with respect to both timing and cost.

“Valuations for end product are on the move as well, but they’re historically based; up-to-date QS reports are essential.”

OnDeck national channel and partnerships manager Nick Reily says the pandemic has been a challenging and uncertain period for many small businesses.

in small businesses turning to brokers for support with funding and opting for longer-term loans.

“OnDeck Australia notched up a significant milestone, writing 76% more broker-originated loans in the first half of 2021 compared to the 2020 calendar year. Average loan sizes also increased by 20%, rising from an average of $52,000 in 2020 to $62,000 by mid-2021,” says Reily.

Contributing to this growth was the launch earlier this year of OnDeck’s The KOALA Score™, an innovative credit assessment algorithm, and Lightning Loans, which delivers up to $100,000 in fast, unsecured funding.

Ryan Gair is CEO of selfemployed specialist and mortgage manager Rate Money. He says one thing his team has learnt is that Australians are a resilient bunch.

“Life as we know it has certainly changed, but what wasn’t going to change was the spirit and resolve of self-employed Australians,” Gair says. “We knew that as a business we had to continue to fight

“Our latest broker Net Promoter Score saw an increase to +10, which demonstrates that we are moving forward in the right direction” Phil Waugh, NAB “But we have been impressed at how many OnDeck customers have pivoted into new revenue streams to survive and even thrive,” Reily says.

OnDeck was quick to recognise the challenges of lockdowns and social distancing for the small business community.

“We were absolutely on the front foot delivering valuable support not just to our clients but to the small business sector more broadly.”

Reily says OnDeck launched, and continually updated, its online COVID-19 resource hub, which kept small businesses informed on stimulus measures and state restrictions and provided educational content and inspirational small business stories. In September, the lender launched a four-week repayment holiday for customers.

There has been significant uplift

and to support these people. Whilst the world around them lacked stability, we knew that was exactly what we had to provide.”

Rate Money decided to prioritise supporting its broker channel during the pandemic.

“We kept a very consistent approach to all our lending policies; we agreed that we also wouldn’t bring in COVID restriction policies requiring additional documentation.”

Just because an individual business client doesn’t fit into a certain box, it doesn’t mean they’re not a good customer, Gair says.

“At Rate Money, we pride ourselves on always weighing an application on its merits. Small businesses were struggling enough without us making it harder for them.”

To support its branch principals and customers, Rate Money regularly released specials to

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stimulate new applications, lowered interest rates and created new specials for the self-employed.

“At a time when cash flow had taken a hit in most industries, we ensured our specials had great interest rates, no application fees and, as always, no LMI and no risk fees,” says Gair.

Sharon Piening is treasurer of CAFBA and a director of commercial and asset finance brokerage The 500 Group. She says the industry has changed in many ways due to COVID. “Remote working and the use of the office is the most obvious and prevalent change,” Piening says. “Many brokers have had to invest heavily in the technology to facilitate remote working … it will be interesting to see what happens in the future as many brokers and their staff are very keen to get back to the office at least a few days a week.”

Using technology to engage with clients and referral sources has also increased – a trend that’s likely to continue as funders become more comfortable with platform security.

Piening says that after two years of lockdowns there’s a pent-up demand from business owners for finance.

“The key opportunities will be in commercial and asset finance, particularly those local businesses which can take advantage of supply chain issues that have been created

by COVID-19.

“Business confidence is fragile, and governments at all levels across Australia will have a key role to play, providing support and creating the right environment to ensure the economic recovery and bounce-back are sustained.”

Piening says CAFBA has listened to feedback from members and continued to advocate on their behalf to government, regulators and lenders.

“For example, through our relationship with the Council of Small Business Organisations of Australia [COSBOA], we advocated for clarity around ongoing support for SMEs and supported COSBOA’s Business Rebuilder Proposal.”

Property market, loan demand NAB executive – broker distribution Phil Waugh says the pandemic has fundamentally changed how Australians purchase a home.

The latest NAB research suggests that almost one in 10 Australians

have moved either within their own or to another state or territory because of COVID and are not planning to return.

“We continue to see strong momentum across all segments of the property market. NAB is very much open for business with great SLAs, products backed by highly competitive pricing, and offers for every customer in the market,” Waugh says.

“According to CoreLogic, investors are the fastest-growing sector of the market, with plenty of upside still to go. NAB is well positioned to help investor clients grow.”

Waugh says NAB has seen great loan growth, with application volumes increasing significantly.

“We want to make the experience of buying a home simpler for all our customers and to support them with the confidence of an approval as quickly as possible, regardless of channel.”

Process changes are having a positive impact by ensuring that NAB’s service is stable and consistent.

“Some of these changes are part of an ongoing review of our entire end-to-end broker experience, which we are determined will make us the most reliable bank for all brokers and ensure consistent service across all channels,” says Waugh.

“Our latest broker NPS saw an increase to +10, which demonstrates that we are moving forward in the right direction.”

Mohnacheff says despite the challenges of a crowded property market, first home buyers have remained a key demographic, with savvy buyers taking advantage of the First Home Loan Deposit Scheme and the First Home Loan Super Saver Scheme.

Understanding the challenges first-time buyers face, Liberty works closely with its business partners to provide flexible solutions to help customers reach their goals faster.

“As well as low-deposit home loans, we accept gifted deposits, and we can also look at building LMI into the loan structure. These options can make a powerful impact on a first home buyer’s borrowing ability,” Mohnacheff says.

“With greater need for flexible lending options across the board, Liberty’s loan growth has continued on an upward trajectory, and we are well placed to help customers achieve their goals.”

Susan Mitchell, CEO, Mortgage Choice

To maintain the fast turnaround times and excellent service Liberty is known for, Mohnacheff says, internal processes have been refined to achieve maximum efficiency and avoid delays.

“We have also extended our Melbourne-based team to ensure that there is always someone

customers in the first-half period either purchase or refinance a home, or secure asset finance, a record in our 21 years of business.

As we exit 2021, we continue to see application levels trekking well above pre-COVID, setting us up well for 2022.”

Mitchell says homebuyers were

“The broking industry has invested heavily in technology, and it’s making broking platforms more efficient, as well as improving customer experiences” Susan Mitchell, Mortgage Choice available to help provide customers and business partners with fast answers to any questions that arise along the way,” he says.

Barry Saoud, Pepper Money’s general manager mortgages and commercial lending, says, “We’ve witnessed record growth in the alternative and non-conforming space, and all signs point towards this remaining strong.

“Our originations hit a milestone

by June; we’ve helped over 27,000

on an emotional rollercoaster in 2021 as they watched prices soar 20% across all capital cities.

“Brokers have had to really set the expectations around what exactly borrowers can afford and how much they’ll need for that all-important deposit,” she says.

The focus was again on refinancers who were keen to get a better deal or to take advantage of ultra-low interest rates. Mortgage Choice data shows that, in the 12 months to www.brokernews.com.au

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October 2021, about 39% of loans written were for refinances, followed by customers buying their next home (27%) and first home buyers (19%).

“Since April we’ve seen a slight uptick in investors re-entering the market. However, APRA’s increased interest rate buffer may slow this activity,” says Mitchell.

It’s been an incredible year for Mortgage Choice, she adds.

“We saw loan settlements grow 29% to almost $13bn in FY21, and we settled more than 37,000 home loans over that same time – an increase of 25% year-on-year.”

Lender turnaround times had improved but were still not where they needed to be, so in February Mortgage Choice launched its own white label product, Mortgage Choice Propel, delivering a verified home loan approval in rapid time.

Felton says the MFAA understands that loan volume can impact turnarounds. “But our data demonstrated some banks’ branches operating on two-to-five-day turnarounds, whilst brokers’ customers were forced to cope with turnarounds in some instances of up to 40 days and more.”

The MFAA played a crucial role in elevating dialogue and bringing greater attention to this differential

ask for special treatment, just a level playing field for broker customers.”

Blethyn says NextGen.Net was able to support lenders and broker groups through its Industry Benchmark Reporting Service, providing trusted insights and analytics on key data points, including turnaround times.

“We also worked closely with our partners to maximise automation and digitisation to improve processing efficiencies and help deliver faster turnaround times.”

Arentz says growth in the value of the Australian residential property market over the past year surpassed expectations.

The pandemic has been notable for driving a strong shift in consumer sentiment towards lower-density living, and also for causing a flight from capital cities to regional areas.

“However, easing border restrictions and the eventual return of overseas students, immigrants and hospitality workers, as well as businesses and nightlife, are expected to reverse this trend and boost demand for city accommodation,” Arentz says.

“Australia’s residential property market is now settling into a period of somewhat slower growth in our

“There are segments that have been left with little support or credit availability – this gap is now being filled by non-banks” Cory Bannister, La Trobe Financial that has made it harder for mortgage brokers to compete, says Felton.

“We told the story via select media, but also followed up with meetings with lenders, regulators and government, including ASIC, Treasury, the Treasurer’s office, the Chair of the Standing Committee on Economics, Assistant Treasurer and Minister for Housing, and finally – and importantly – with the ACCC.” Felton says the improvement over the year has been pleasing, but work still needs to be done.

“Customers with similar complexity of circumstances should not receive different service levels based on the channel they choose to engage the lender with. We don’t 18

mind. Nonetheless, it continues to provide compelling opportunities for experienced developers who know where to look and how to successfully deliver their projects.”

He says industrial property has been largely immune to the falling rents and vacancies affecting the commercial and office and retail sectors, with soaring demand for warehouse and logistics space driven by e-commerce growth and supply chain restructuring.

Arentz predicts the strength of demand and rapid increase in residential construction will eventually ease due to supply chain pressures, further labour cost escalation and rising land values.

Cory Bannister, senior vice president and chief lending officer, La Trobe Financial

At Rate Money, Gair says property market growth most certainly defied expectations.

“The demand that we saw at Rate Money was phenomenal.

In the last 18 to 24 months our average loan size has grown by over $150,000,” he says.

The company knew it had to grow with the market, Gair says.

“We are a big believer in reinvesting back into the business in order to better ourselves.”

Rate Money was heading into 2021 with 11 branches predominantly in NSW and 35 people across its network.

“Fast-forward 11 months and we have 21 branches, with another four ready to open in Q1 next year.

On top of that, we now have over 100 people in the network, branches in three states, soon to be four, as well as settling $1.5bn for the calendar year.”

Rate Money and its funding partners have heavily invested in credit, credit staff and processes.

“We didn’t want our SLAs to blow out to 20, 30 or even 40 days as we’ve seen throughout the industry, and they haven’t.

We have remained in single figures for every single product we offer, and that’s something we’re extremely proud of.”

Technology Saoud says technology is creating remarkable opportunities in alternative lending, and Pepper Money is reimagining how it delivers value to its customers and brokers.

“We are not interested in providing a generic digital offering.

We want to give our customers and brokers a digital experience that complements and accelerates the strong service they expect,” he says.

Pepper Money is focused on process efficiencies and streamlining with increased automation, and on continuing to enhance its platforms and build better customer and broker experiences.

“Our multi-experience focus is all about bringing these things together so that our customers and brokers can get what they want, when and how they want it, no matter the channel.

“With record applications and originations this year, Pepper Money maintained our industry-leading turnaround time of one business day, illustrating how our unique platforms support scale to onboard a record number of customers with speed and efficiency.”

Saoud says there are plans to enhance the Pepper Product Selector (PPS) tool and cloud-based solution Pepper Resolve, targeting increased

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Mike Felton, CEO, MFAA

activation and usage among brokers to improve conversion and create new opportunities in new segments.

In 2021, the PPS provided a mortgage solution to over 13,000 customers, and 5,300 customers with Resolve.

“Sage is now processing over 20% of our mortgages volume, combining our cascading credit model with a customer’s credit history and an automated property valuation to expedite approval. And Solana has increased our capacity to assess

Renee Blethyn, head of broker partnerships, NextGen.Net

their customers’ lives easier.

“The difficulty they’ve got is the variance between the lenders and what’s available to them, so it’s important for lenders to invest in as much automation and as many tools as possible for brokers to improve straight-through processing,” she says.

“When lenders utilise digital tools services such as ApplyOnline ‘eSign’ and the in-built Document Verification Service, the application process becomes much easier for the broker.”

“Brokers’ adaptability to change and focus on customers proved once again to be the keys to success” Mike Felton, MFAA consumer loans by automating enquiry through to settlement with digital identity verification.

“Our broker network can expect us to continue supporting them to offer alternative lending options in the most consistent, transparent and innovative ways,” says Saoud.

Blethyn at NextGen.Net says the broker community is extremely open to new digital tools – anything that’s going to make their lives and

Reily says many fintech lenders such as OnDeck have embraced the use of data in their lending decisions.

“By harnessing the power of data, OnDeck has not only been able to streamline loan applications; we have also been able to introduce Lightning Loans, which we can decision in as fast as 30 minutes,” he says. “We’re also one of the fastest in the country for unsecured

loans up to $250,000.”

Reily says digitisation is being driven by its ability to lower unit costs; faster response times for brokers and customers; elimination of the ‘slow no’ that many small businesses experience; and the ability to gain a more holistic view of a business’s credit risk rather than a rear-vision approach.

At NAB, Waugh says more than 93% of its customer interactions now occur through digital channels, and the bank’s research shows that one in five Australians use a banking app every day. He says Australians are looking for ways to take greater control of their finances following the pandemic.

“Over the last 18 months, we have responded to changing customer behaviours to be more digital and to help customers to better manage and have control over their money every day.”

A review of the NAB customer’s home loan journey has focused on giving them greater flexibility and control by allowing more self-service options.

Waugh says recent updates to the NAB app now enable a home loan customer to immediately fix (or refix) their interest rate, amend a direct debit, vary key aspects of a loan, and work out how much equity

they have in their property.

“No doubt the future may be digital, data and technology driven,” he adds, “but the essential role of brokers remains crucial.”

Felton says new technology will continue to play an important role as the industry finds ways to more efficiently attract and engage with customers in an increasingly digital world.

“With Consumer Data Right [open banking] rules being rewritten to allow consumers to share data with mortgage brokers as trusted advisers, it’s important that brokers and aggregators have appropriate capability, or third-party service providers, to allow them to leverage the opportunities open banking presents.”

Arentz says Trilogy Funds has a tailored portfolio forecasting platform designed to monitor individual loans and the loan book, with the ability to scenario-test a large number of possible outcomes.

“It is interactive, dynamic and multipurpose,” he says.

The platform is used for current and forecast loan assessments, loan progress, cost to complete and to monitor broader liquidity trends across the loan portfolio and fund.

“It enables us to provide quick turnarounds and agile responses to brokers, and to direct borrowers and loan updates in the current fast-paced property environment.”

Piening says the finance sector has embraced new methods, using tech tools such as video conferencing platforms to ensure consistent service, while some lenders have introduced DocuSign to their broker network to boost efficiencies.

“The majority of lenders and aggregators also shifted their focus to online education and digital PD days. These have drawn a large audience, and we expect the trend to continue.”

Digitisation can save time, reduce bureaucracy, and lead to far better outcomes for all parties, says Piening.

“COVID pushed brokers to accelerate digital strategies within their businesses, or in some cases to create them for the first time.”

Piening says commercial and asset finance lenders have typically been slow to adopt technology for identifying borrowers and signing paperwork, but “we are already seeing a move towards it”. www.brokernews.com.au

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“Businesses looking to diversify will need to ensure they understand the markets they are moving into, and that is where education and mentoring will become increasingly important. CAFBA’s Education Council has been established to ensure these needs are met.

Education and mentorship are vital to ensure customers continue to receive the right outcome.”

Industry regulations The biggest regulatory change in 2021 was the introduction of the best interests duty.

“Whilst the best interests duty is a significant change that was not easy to implement, it represents

Peter Vala, general manager partnerships and distribution, Thinktank

Mergers and acquisitions There have been plenty of mergers this year, including NAB’s 86 400 with UBank, REA Group with Mortgage Choice and Smartline, Lendi Group with Aussie Home Loans, and People’s Choice with Heritage Bank.

Mitchell, who now leads both the Mortgage Choice and Smartline broker groups under REA Group, says financial services businesses will always look for opportunities to scale up and set their future direction.

“At a time when there are plenty of disruptor businesses, those that are well established must be strategic to ensure their future place in the industry,” says Mitchell.

She says REA Group’s acquisition of Mortgage Choice is part of the group’s ambition to accelerate its financial services strategy and create Australia’s leading retail broking business.

“REA aims to deliver increased value for brokers, customers and business partners by leveraging the vast consumer audience on realestate.com.au, as well as its property market insights and data.”

Combining Mortgage Choice and Smartline to operate under one brand and platform was a carefully considered move.

“The great thing about bringing together these two businesses is 20

how similar their foundations are.

It’s these shared values that form the strong base for operating under the one brand,” says Mitchell.

Reily says mergers and acquisitions are to be expected as lenders look to achieve economies of scale, but bigger isn’t always better.

“Scale can also mean losing the human touch that is so important in the lending process. OnDeck’s research shows that 60% of small businesses say a key driver of trust in a lender is having people to speak to.”

Reily says this is why OnDeck takes a “high-tech, high-touch” approach, with BDMs selected for their small business lending experience and brokers encouraged to reach out if they have queries.

Piening says mergers have been driven by technology, competition and the need for scale. New, nimble, tech-driven entrants have challenged the major players by demonstrating a different and more cost-effective way to do business.

“M&A is also likely at a broker firm level. We have already seen activity in this space. This is likely to continue with brokers either looking to grow via acquiring competitors that service the same markets as them, or by acquiring broking businesses that service different market segments as they seek to diversify,” says Piening.

banks cannot say,” he says.

With credit growth running at about 7% and annual property market price growth of 20%, APRA’s tightening of loan serviceability buffers from 2.5% to 3% for APRAregulated lenders was “probably right to take some steam out of the engine”, says Bannister.

“It might reduce borrowing limits by around 5%. We think it’s more designed to be a ‘shot over the bow’ to signal to the market that things probably need to cool a little … if not the regulator has foreshadowed additional levers are available.”

While some banks want to extend the serviceability limits to non-ADIs, Bannister says the non-bank sector’s

“It is pleasing to see the lending industry as a whole continuing to remain strong and gain momentum” Peter Vala, Thinktank an unquestionable positive for every consumer who obtains credit assistance through a mortgage broker,” Felton says. “In so doing, the duty differentiates the mortgage broking offering from the credit assistance provided through lenders’ proprietary channels.”

The MFAA also engaged with regulators on behalf of the industry regarding remuneration changes, reference checking, breach reporting, remediation, and design and distribution obligations.

Felton says the changes have ensured that the interests and expectations of brokers and consumers are aligned, conflicts have been mitigated and there is a greater focus on information sharing and reporting of misconduct.

“This leaves our industry well placed to proudly and confidently face the impending 2022 review by the ACCC and Council of Financial Regulators.”

Bannister says the impact of BID has been neutral because most brokers were already operating to a standard that met BID requirements.

“We feel that BID will have certainly played a part in supporting growth as brokers can now say to their customers, ‘I must act in your best interests as I am obliged to by law’, and that is something the

market share of 5% is not enough to cause systemic risk, and it’s unlikely the regulator will act.

“This ensures borrowers that are creditworthy are not marginalised or turned into ‘mortgage prisoners’, as non-banks can appropriately provide credit at this time.”

Vala says brokers will need to consider ADIs’ tightening policies, and APRA’s move to lift serviceability rates, which is likely to result in reduced borrowing capacity of about 5%.

“Debt-to-income limits could be implemented in the near future. It’s important brokers work with lenders who are constructively aware of these issues and their ramifications.”

Waugh says NAB welcomed APRA’s move to increase the minimum interest rate buffer, and the bank has now begun to implement the changes.

“We see this as a sensible change of policy considering the broader environment for house prices,” he says.

Mitchell believes APRA’s tightening of interest rate buffers is likely to have a modest impact.

“Brokers are likely to see the most impact occur for customers that are on the fringes of being approved for home loans.”

Piening says BID does not apply to commercial and asset finance lending. The industry is

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self-regulated, which has delivered great customer outcomes. CAFBA successfully campaigned years ago to ensure responsible lending (RL) did not apply to business lending, but Piening says over time elements of RL have crept into commercial finance, reducing accessibility to finance for SMEs. “We support the proposed changes in RL and are campaigning for the Senate to accept them.”

Commercial and asset finance brokers are self-regulated, Piening says, and this has delivered great customer outcomes. CAFBA is currently reviewing the selfregulation model as it seeks to bring in a recognised professional qualification for commercial and asset finance brokers, similar to a CPA or a CA. “This is an exciting opportunity for the industry, with a working group looking at the opportunities available to us. Recommendations will be provided to the board over the next few months,” says Piening.

Open banking The introduction of open banking in Australia last year, starting with the big four banks, is a game changer for the financial services industry.

“Open banking offers an opportunity to streamline the lending process by addressing major

Clinton Arentz, head of lending and property assets, Trilogy Funds

NextGen.Net is excited to be delivering open banking solutions through ApplyOnline to its customers and users, Blethyn says; this will help the broker see a more meaningful and accurate financial picture of their client.

Mitchell believes open banking will allow the broking industry to

“We see great opportunity in further diversifying our loan book and helping more brokers and developers with niche projects” Clinton Arentz, Trilogy Funds pain points for lenders, brokers and customers,” says Blethyn.

NextGen.Net research reveals that brokers are most excited about the data they can access, enabling them to engage with their clients earlier, to better tailor solutions, and to deliver ongoing services beyond home loan applications.

“With mortgage brokers now included as trusted advisers under the CDR, it’s amazing recognition of the value they deliver and will also give open banking the best chance of delivering better outcomes for consumers.”

advance towards completely digital brokers and brokerages.

Felton says it’s really important that brokers were included in open banking to avoid a competitive disadvantage going forward. It was pleasing that earlier in the year, following three years of advocacy by the MFAA, Treasury acknowledged the importance of including mortgage brokers, followed by alterations to the open banking rules, which were originally too onerous for brokers to meet.

The MFAA will continue to work with the Treasury to make sure the

Nick Reily, national channel and partnerships manager, OnDeck

rules are fit for purpose.

While open banking has limited impact on commercial brokers, Piening says overall the benefits will include differential pricing and new products.

“Customers with a good credit history will be able to leverage their standing to a greater degree than in the past,” he says.

Diversification While small businesses have struggled this year, as pandemic restrictions ease and the economy rebounds, SMEs are looking to access finance, which is good news for brokers.

“There’s so much business and growth potential among the new and upcoming generation of underserved borrowers, the rebounding small business sector, and the growing self-employed market that are looking for products and options that are built to accommodate their real-life circumstances,” says Saoud.

As more consumers with diverse financial backgrounds seek someone who understands them and is willing to look at their unique situation, he says brokers will become more vital.

“Our broker network can expect us to continue supporting them to offer alternative lending options in

the most consistent, transparent and innovative ways to meet their customers’ evolving needs.”

Waugh says the opportunity to diversify into commercial lending is real, with strong momentum in the regional and agricultural sectors and increased capital city demand for equipment finance solutions to support advanced manufacturing.

“Assets such as industrial land and warehousing are also in high demand. This increased demand provides brokers with an opportunity to approach the needs of their customers holistically, using multifaceted funding solutions,” he says. “Fast and easy access to funds is critical for small businesses as they bounce back.”

As the nation’s largest business bank, NAB has hired an extra 134 SME bankers across 60 locations this year and introduced its Secure Lend product, which allows small businesses to borrow up to $2m.

Felton says commercial lending remains a significant opportunity for many mortgage brokers who are looking to diversify income streams and protect themselves against possible future property downturns.

“Whilst MFAA data shows that more than 4,700 mortgage brokers are now writing commercial loans, this means there are in excess of 12,500 for www.brokernews.com.au

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FE AT URES

whom this remains an untapped diversification opportunity.”

The MFAA offers its members the most comprehensive support provided by any association, Felton says.

This year the MFAA ran its commercial education program virtually, covering all business and commercial lending. The program and webinars will continue in 2022.

“We’ve also produced two essential e-books for brokers new to commercial lending, and delivered several webinars,” Felton says.

Bannister says SMEs are the engine room of the economy, accounting for about 35% of Australia’s GDP and employing 44% of the workforce.

Given that the events of the last 18 months meant an uncertain and complex path to finance, La Trobe Financial believes brokers are best placed to help small businesses navigate that path.

Bannister says brokers will have opportunities to help thriving SMEs build their businesses and to assist those needing to restructure to get through a challenging period.

“Customers long remember who helped them in their time of need.”

With La Trobe Financial offering a product suite covering residential, commercial, SMSF, development, rural, aged care and non-resident; removing barriers to entry for many specialised products; and providing customised training and education, Bannister says the company is well placed to help brokers diversify.

The lender anticipates a surge of demand for commercial finance, especially light industrial properties.

“We experienced a steady demand for commercial SMSF loans secured against commercial property, typically from SMEs looking to purchase the premises they operate their business from,” says Bannister.

Piening says brokers are diversifying their businesses, and with some being exposed to the risks of a limited number of income sources, “it made to sense to create others”.

“CAFBA welcomes this diversification but cautions against doing it haphazardly as it can lead to poor customer outcomes.”

Piening says the CAFBA Education Council can assist broker businesses that are looking to diversify into a different market.

CAFBA has observed specialist lenders emerging over the last two 22

years, targeting niche sectors, and providing asset and commercial finance brokers with many additional options for their clients.

“Awareness of these new providers in the general business market is limited, however, so brokers have a key role to play in educating clients to consider options beyond traditional channels,” says Piening.

“Small businesses are going to require finance to rebuild their businesses, employ staff and take advantage of opportunities as they arise.”

Arentz says non-bank lenders such as Trilogy Funds work in an agile way with brokers and developers, and focus on a developer’s relevant experience, reputation, business quality and marketing plans.

“We see great opportunity in further diversifying our loan book and helping more brokers and developers with niche projects such as service stations, medical centres and disability accommodation.”

Arentz says Trilogy Funds is well versed in both urban and regional areas across Queensland, New South Wales and Victoria, with flexible funding solutions for developers needing fast finance.

Ryan Gair, CEO, Rate Money

through SMSFs will continue in 2022, providing brokers with a significant opportunity to diversify.

“We pride ourselves on weighing an application on its merits. Small businesses were struggling enough without us making it harder for them” Ryan Gair, Rate Money Thinktank is known as a commercial property lender, but Vala says it has expanded its product offering to include residential and SMSF loans for PAYG, self-employed and SME borrowers.

One of the emerging trends is the demand from SMEs and the self-employed for residential lending products, he says.

“Although commercial did slow marginally during 2021, it still remained relatively solid, and we expect this to strengthen with border and social restrictions easing further in 2022 … brokers who are able to provide lending options across commercial and residential will be well positioned for growth.”

Vala adds that growth in commercial property funding

Looking ahead to 2022 “In line with Liberty’s ethos, we continue to listen to feedback from our community, and we’re committed to exploring new ways to help more people get financial,” Mohnacheff says. “And with some exciting new projects and increased capabilities in the pipeline, we look forward to getting digital with you in the new year.”

Saoud says as Pepper Money heads into its 22nd year of business in 2022, the company has an exciting opportunity to leverage its core competencies through data insights and in-house technology.

“We have significant headroom to extend, connect and grow our real-life loan options for even more Australians,” he says.

“Fast turnarounds alone aren’t enough; we are relentlessly focused on delivering fast turnarounds with consistency and transparency in our credit decisioning.

“We know how critical real-time approval confidence and credit decisioning is to brokers, and we have recently launched with a major aggregator – with our goal to continue rolling this out across the aggregator industry.

“By leveraging existing and future technology, streamlining processes, product innovation, and strengthening our distribution footprint over the next year, we’ll be providing scalable and accelerated growth for brokers’ businesses.”

Blethyn says she’s excited to see brokers in the driver’s seat as they continue to be consumers’ number one choice and optimise new technology to deliver a better service to their clients.

“The technology available for brokers was so accelerated by COVID-19, which has meant the broker proposition far exceeds anything that they could have possibly imagined three years ago.”

She says one of the most exciting things to look out for is NextGen.Net’s ApplyOnline Financial Passport, which includes ‘NextGenID’ and ‘Access Seeker’ – two

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Sharon Piening, treasurer, CAFBA

new tools that will offer some great new efficiencies for brokers.

NextGenID, a digital VOI service, will eliminate face-to-face onboarding and enable brokers to capture and verify ID requirements digitally at point of sale. Access Seeker will give brokers upfront access to consumer credit information held by credit bureaus within the ApplyOnline application and allow a broker to update and refresh the information in real time.

Bannister says the broker industry will receive a major boost on the back of COVID in 2022 and beyond.

“We expect to see broker share continuing to grow, targeting the 70% milestone, and we hope to see NBFI market share heading back to 10% and beyond.”

Bannister says La Trobe Financial is looking forward to helping Australians achieve their dreams of homeownership and financial independence.

NAB’s commitment is to deliver a simple and digital home lending experience for both brokers and customers, says Waugh.

“We’re on track to make unconditional approvals in less than an hour the norm with our new loan origination platform kicking off in early 2022,” he says.

“The process will enable greater use of technology, minimising potential for errors and rework, and

Felton says the MFAA is approaching 2022 with confidence and pride in the industry.

“As we prepare for 2022 and an impending regulatory review of broker remuneration, I believe the industry is in the strongest possible position to confidently face this scrutiny.

“We have incredibly strong industry data on our side – data that demonstrates mortgage brokers continue to support competition and produce positive consumer outcomes. It’s our firm belief there will be no case for change to remuneration in the upcoming 2022 review.”

Felton says the MFAA will also be backed by the powerful combination of the selfregulatory and legislative reforms implemented over recent years, ensuring a strong position ahead of the review.

“We will continue our advocacy on behalf of the entire industry to ensure we have a level playing field.”

Arentz says Trilogy Funds’ lending team is excited to continue to diversify its loan book with a wide variety of property projects across residential, commercial,

“COVID pushed brokers to accelerate digital strategies within their businesses or, in some cases, to create them for the first time” Sharon Piening, CAFBA provide faster processing times, which is great news for brokers and customers.

“NAB will continue to be the bank behind the broker.”

Vala says the Thinktank team are optimistic about what 2022 holds for the industry and are looking forward to working alongside brokers in opening up new opportunities for growth and helping their clients strengthen and prosper.

“Whether it’s about diversifying into commercial lending or seeking SMSF accreditation, we encourage brokers to contact us via their aggregator or one of our relationship managers to start a conversation about how we can assist,” says Vala.

industrial and retail sectors, and expand its geographic reach.

“Not all lenders are the same.

In addition to a competitive rate, I would also suggest working with a lender who has deep experience in the industry, funds available when you need them, personal service and the ability to tailor the loan to your project.

“We are confident in our loan product offering and look forward to continuing to fill those gaps in the construction lending space as accessible, reliable and experienced construction funding specialists.”

Mitchell says as property supply increases and demand slows, she expects price growth to slow again in the first few months of 2022 and overall prices to rise by

5% to 10% over the year.

As the Smartline and Mortgage Choice businesses integrate over the next 12 months, she says there will be significant milestones to achieve.

“Change is difficult for people and businesses at the best of times, and whilst there are similarities, there are differences too. It’s about us taking the time to understand what those differences are and then working with the networks to identify how we bridge the gaps and move forward as one.”

Reilly says the OnDeck team, like all Australians, are looking forward to life getting back to normal.

“High vaccination rates should make lockdowns less of a possibility in the future, and that’s good for brokers, small businesses and the broader lending community,” he says. “We are also excited by the opportunity to partner with more brokers to fund more small businesses faster and more efficiently than ever before.”

Piening says CAFBA faces a number of challenges, including ensuring ready access to finance to assist businesses and individuals to recover from the pandemic.

CAFBA also wants to keep professionalising the industry through self-regulation.

“Education’s role cannot be overstated. CAFBA welcomes new entrants to the market and will help them satisfy their clients’ expectations. We must continue to guarantee our sector can assist borrowers.

“I’m looking forward to a year without lockdowns and working closely with my clients to help them bounce back from COVID-19. It promises to be an exciting and very rewarding 2022!”

Gair believes the industry will continue to see the strong resolve of the Australian people.

“Due to the complexity of small businesses’ financial situations throughout the past two years, I expect to see the demand for non-bank lending continue to increase as it has done over the past 24 months,” he says.

“I’m interested to see how the use of technology continues to change the landscape of lending. What I’m most excited to see is the hardworking self-employed people of Australia begin to prosper again after what has most definitely been a challenging 24 months.” AB www.brokernews.com.au

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09/12/2021 12:35:42 pm

PEOPLE

Have an interesting deal?

Have a particularly difficult or interesting deal? Why not share it with us? Email:

antony.field@keymedia.com

BIG DEAL Ashleigh Aulsebrook and Richard Aulsebrook of Melbourne brokerage Morgan Brooks outline how they saved the day for an older couple who had contracted to purchase a warehouse and found their financial approvals had been denied THE FACTS

Client Married couple: husband, 74; wife, 65

Loan size $2.2m

Goal To release equity from holiday home to purchase warehouse

Location Peregian Beach, Queensland

24

The age of the borrowers Mortgaging the borrowers’ unencumbered owner-occupied home involved the provision of an exit strategy and maybe wasn’t the right security to offer the lender The borrowers had a complex financial structure, including a family trust and SMSFs – was a full-doc application the best option?

Timing was critical in this case as the contract to purchase the warehouse was unconditional, with a large deposit ($200,000) at risk if the borrowers couldn’t settle on time Uncooperative vendor – an extension on settlement was not on the cards Highly anxious clients – putting them at ease was our top priority

Better Choice offered the best rate and terms, and, importantly, we could secure an approval and settlement within our client’s time constraints

Ashleigh Aulsebrook Senior strategy manager and director, Morgan Brooks

THE SOLUTION

After searching through our product options to find the one that was in the best interest of our client, we identified three

Aggregator Specialist Finance Group

lenders that were likely to be suitable for their particular situation. Following discussions with our contacts at the respective lenders, including Graeme Norris of Better Choice, we talked through the options with our client and gathered any additional information to refine the search further.

After getting feedback from the client and having a further discussion with

THE SCENARIO

Last year, we were introduced to a delightful older couple who had unconditionally contracted to purchase a warehouse in order to expand the wife’s business premises from what she currently owned to an adjoining warehouse that her business of 15 years was currently renting.

Like many high-net-worth clients with no business debt facilities and an unencumbered home in Brisbane worth $1.5m, they thought they could settle with little red tape and well within the now fast-approaching settlement date. In addition to the wife’s business, the husband had enjoyed year-on-year increasing profits from his steel fabrication business.

But sadly, this was not to be the case.

Not only were the couple without any credit facilities, but the responsible lending obligations, combined with their ages (74 and 65 years old respectively), meant they had not yet been able to secure approval, nor was approval on the horizon.

To add further stress, they had paid a large deposit of $200,000 on the warehouse purchase, and the vendor was unwilling to offer any extensions to the settlement date, meaning they had to get the deal done as soon as possible.

Naturally, we were excited at the chance to help these wonderful people and had no reservations about extending assistance.

We realised time was of the essence and quickly refined our product search with the help of our aggregator partner, SFG.

Lender Better Choice

launched this home loan range.

It was happy days all round when we shared confirmation from the credit team at Better Choice as well as Galilee Solicitors. Settlement was inked and the purchase confirmed on 9 September, two days before the contract stipulated.

Some of the hurdles this application presented:

Richard Aulsebrook Founder, Morgan Brooks

Graeme Norris, it became apparent that Better Choice offered the most competitive rate, along with flexible terms and policies; and, importantly, in our educated view we could secure an approval and settlement within our client’s time constraints – a significant hurdle to overcome and something the client was adamant should be a priority when selecting a lender.

The first task after acceptance of our recommendation was to order a valuation and have our client execute discharge authorities of their mortgagee, as most require 30 days’ notice to prepare their discharge and accept a PEXA invitation.

So it was that within days of fielding the referral we were able to lodge our client’s application on 24 August, and Better Choice provided conditional approval six days later – no small feat given that it had only recently

THE TAKEAWAYS

As all mortgage brokers are aware, once an application is lodged it’s up to the lender to liaise with its solicitor to ensure loan and mortgage documents are prepared, returned and checked and a settlement invitation issued.

Building relations with referrers, aggregators and lenders is as important today as it has ever been, and, in that regard, we were delighted that Graeme at Better Choice took up the challenge, escalating the application with assistance from his settlements team, with docs out on 3 September.

To be able to work with our partners to deliver such a positive outcome is incredibly gratifying and reaffirms why we love what we do. We now have some very satisfied customers and strengthened relationships with all the parties involved. AB

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08/12/2021 11:14:35 am

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08/12/2021 11:14:43 am

DATA

RE AL ESTATE MARKET ANALYSIS

PROPERTY PRICES RISING FASTER THAN PAY CHEQUES House prices have been expected to drop for months, but there are still no signs of this happening, and the latest figures show that wages have failed to keep pace with price rises.

Tom Uhlich of Boss Money investigates you’re currently in the process of looking for a home or have recently purchased one, you’re not alone in feeling stressed, confused and out of pocket.

As the Reserve Bank of Australia continues to keep interest rates at an all-time low, house prices across the country are continuing to rise. Paired with the scarcity of properties available on the market and the delays in construction due to COVID-19, it’s no secret that people are currently paying too much for properties.

Let’s put it in retrospect. In the June 2020 quarter, 16% of borrowers were taking out loans amounting to at least six times their annual income. In the June 2021 quarter, this number has grown to 21.9% of borrowers.

IF

But it’s not all bad news Despite these record-high percentages, there has been a positive shift in APRA’s banking statistics. In fact, this year alone saw a fall in the share of loans with an LVR above 90% from 9.2% to 8.6%, meaning the number of loans to borrowers who have paid less than a 10% deposit has declined.

The share of interest-only loans also fell from 18.2% to 17.4%, indicating that more borrowers have been paying down their mortgage from day one. The share of nonperforming mortgages on lenders’ books also declined from 1.1% of all loans to 1.0%.

So, when will the cash rate rise?

Leading Commonwealth Bank economist Gareth Aird has said he expects the RBA to start increasing the cash rate as of November 2022. He suspects that by Q3 of 2023 it will have risen back to 1.25%.

However, Australia’s housing-related debt is currently so high that this increase to 1.25% will elevate all interest payments to 5% of disposable income. In regions where lockdowns have been tight, mortgage stress has quickly followed, and research has revealed that 89% of homeowners in these areas are paying for mortgages they can’t afford.

26

OWNER-OCCUPIER LENDING CONTINUES TO SURGE Source: ABS, Bloomberg, Macrobond, ANZ Research

$25.0bn Owner-occupier excl. refinancing

$22.5bn

Investor excl. refinancing

$20.0bn $17.5bn $15.0bn $12.5bn $10.0bn $7.5bn $5.0bn $2.5bn 02 03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21

22

Years

Tom Uhlich Director and senior mortgage broker, Boss Money

The forecast 1.25% interest rate for 2023 is very low compared to previous periods.

But with household debt at an incredible high, the rate rise could considerably impact borrowers’ capacity to service this debt.

But there is a positive. As CBA senior economist Belinda Allen has revealed, household interest rate payments are currently almost at a record low of 3.5% due to the low RBA interest rates. This demonstrates that although some may be doing it tough, the figure is much lower than the 8.5% interest that homeowners were paying during the 2008 GFC. The RBA’s ability to prevent the economy from getting out of hand has protected many homeowners during these difficult times and helped them manage their debts.

For example, a mortgage of $500,000 that is fixed for two years at 1.8% would see repayments increase by $500–$660 per month at the end of two years (assuming a 1% rise in rate). Therefore, a decrease in the cash rate has lowered these repayments and allowed borrowers to take better control over their financial commitments.

Then where is the trouble?

The major issue will arise for those who have only paid a 5% deposit on their home as they have had to rely on financial support from the bank or a family member. While loans have grown by over 15% in the past few years, incomes have remained stagnant.

In many cases, incomes have even decreased due to job losses or reduced working hours.

Compared to borrowers in NSW, where two in five are already experiencing mortgage stress due to spending more on their mortgage payments than they are earning, Queenslanders are considered well off. If rates in NSW rose by as little as 1%, people could lose their homes, as those with smaller deposits would see large increases in their repayments.

Business analysts have pointed out that mortgage stress is not apparent across Australia as struggling homeowners have been encouraged to sell before being faced with irreversible debt.

Contact Boss Money on 0476 111 000 or tom@bossmoney.com.au. AB

www.brokernews.com.au

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08/12/2021 11:46:53 am

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08/12/2021 11:47:10 am

DATA

ADELAIDE

BRISBANE

Total auctions

299

Cleared

155

Uncleared

CANBERRA Total auctions

184

Cleared

135

Uncleared

18

42

Clearance rate

78.7%

Total auctions

256

Cleared

146

Uncleared

50

Clearance rate

Clearance rate

74.5%

88.2%

PERTH Total auctions

52

Cleared

18

Uncleared

12

Clearance rate

MELBOURNE

60%

Total auctions

1,891

Cleared

1,105

Uncleared

508

Clearance rate

68.5%

TASMANIA SYDNEY

Total auctions

2

Cleared

0

Total auctions

1,577

Uncleared

1

Cleared

1,105

Uncleared

508

Clearance rate

n.a.

Clearance rate

Note: A minimum sample size of 10 results is required to report a clearance rate.

CAPITAL CITY AUCTION CLEARANCE RATES

71.4% Source: CoreLogic

WEEK ENDING 28 NOVEMBER 2021 Canberra, Adelaide and the combined capital cities recorded their busiest auction week since CoreLogic records commenced in 2008. A total of 4,261 homes went to auction, making this the first week that capital city auctions have exceeded 4,000, overtaking the week ending 25 March 2018 (3,990) as the busiest auction week on record. In the previous week, 3,720 capital city homes went to auction.

Demand hasn’t kept pace with the surge in auctions; the preliminary clearance rate has continued on the softening trend evident since early

October, with 71.4% of the 3,471 results collected resulting in sales before, at or after auction, compared to 74.5% the week before. Melbourne recorded its busiest week since late March and its lowest preliminary clearance rate since mid-September – 1,891 auctions were held, up 14.1% on the previous week, with a clearance rate of just 68.5%. In Sydney, 5% of auctions were postponed. With 1,577 homes auctioned, it was Sydney’s second-busiest week on record, but the clearance rate of 71.4% was the lowest over the year to date.

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08/12/2021 11:49:34 am

FE AT URES

OPINION

NEW DIGITAL TOOLS BRING EFFICIENCIES TO LENDING

Kate Gubbins, CEO of mortgage finance platform provider Simpology, says digital innovations in 2022 will enrich loan origination activities with a close eye on intelligent secure connections, ‘source of truth’ data and better lender-broker and broker-consumer collaboration

are many things we can’t change when writing a mortgage: there’s no avoiding the fact that there will always be many stakeholders – the applicants, brokers, lenders and other service providers. And there are fundamental activities that must take place to ensure a compliant, accurate and suitable mortgage outcome. What can be changed is the experience of the stakeholders, and the ways in which these fundamental activities are executed.

Over the past few years, we have seen a bunch of innovations to submission and assessment processes that aim to create convenience, efficiencies and speed in mortgage origination. In the year ahead, we will continue to see further digitisation, a growing acceptance by consumers and brokers of digital tools, and continued lender investment in the digitisation of mortgage origination.

manually re-engineered by aggregator and submissions platforms. This reliance on the manual update of lender products and serviceability data across many platforms often means that data is out of date, incorrectly configured, or even interpreted differently across the industry. With APIs and smart subscription methodologies, there is no reason why lenders’ source of truth data can’t be digitally connected to, and therefore digitally updating, external partner systems.

Lenders’ willingness to expose APIs into their business rules engines is growing, so

‘Source of truth’ connections In mortgage origination we have a heavy reliance on data – but much of that data we rely on is not ‘source of truth’ data.

Customer data is often declared, or supported by documents that are ‘copies of ’ the original or source of truth digital data.

Today’s maturing capabilities to connect digitally to source of truth data mean that CRM, lodgement and origination platforms can embed in workflows and journey integrations to source of truth data to provide more convenient experiences for applicants and brokers, while delivering already-verified data to lenders to speed up assessment workflows.

We all use these digital services to some extent today, and we’ve even seen that some lenders no longer require supporting docs where digital source of truth data is used. In 2022, we can expect to see many more tools and workflows incorporating connections, and traditional methodologies being replaced by digital means.

Another area that could benefit from source of truth data is lender data – lenders’ current products, rates, serviceability logic – which is currently all

it’s even possible to have a world in which aggregator systems are connected to lender-managed serviceability metrics and engines, meaning no more disconnected Excel serviceability calculations. This would lead to guaranteed compliance across the industry, extreme confidence in comparison and selection activities, and a whole lot of time saved across aggregators, brokers and BDMs.

THERE

30

Brokers should be able to take photos of supporting documents or upload on any device; pass on requests to relevant parties like the applicants themselves or admin staff; and control the return of the information to the lenders. With clever integrations and secure, non-email digital portals, we avoid business-email compromise and typical issues with managing email trails. All the stakeholders in an application would be able to work together, with brokers controlling visibility and inviting applicants to participate only when it makes most sense, in order to

We have seen a bunch of innovations to submission and assessment processes that create convenience, efficiencies and speed

Kate Gubbins CEO and founder, Simpology

A better way of managing MIRs Even with many tools and integrations at point of sale to deliver better, verified data to lenders for assessment, there will always be Missing Information Requests. Current MIR practices are one of the main reasons for terrible turnaround times, and there is a huge opportunity to use digital capabilities to make MIR management much more efficient. With digital messaging capabilities, lenders should be able to trigger requests for information from their loan origination systems directly to brokers to be actioned on any device, and for brokers to deliver relevant information or documents straight back to the lender’s loan origination system.

action lender requests quickly and get to a decision faster.

Consumer participation The inclusion of the applicant in MIR management is only one of the ways that consumers should be able to participate in application workflows. Consumers are used to interacting with their trusted service providers online, and with today’s digital tools, brokers and lenders have an opportunity to provide applicants with branded, any-device journeys in order to engage with them to collect data, review and consent to applications, answer questions, and have them upload supporting docs.

Brokers and lenders who provide their applicants with this type of secure online experience can continue to communicate and deliver post-submission information such as status updates, approvals and even mortgage documents. In 2022 we should see more of this ‘window-in’ capability being extended to applicants as a highly satisfying and convenient way for them to participate and have constant understanding of their submission status, while delivering loads of efficiencies to brokers and lenders. AB

www.brokernews.com.au

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PEOPLE

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IN THE HOT SEAT

Rachel Farrell has been a broker for six years and runs Bloom Capital in Melbourne.

She’s been named one of the Australian Business Journal’s 20 leading Australian mortgage brokers to watch, and is the only woman featuring on this list

How did you become a broker, and what attracted you to the role?

My dad has been a broker for 20 years, and my A mum was a broker for about 15 years, so I feel like I have this in my blood! I did see how successful they were in building their business, and I decided to follow in their footsteps. At the time I was unhappy in my job and went through some major personal changes, so I decided I needed a new direction and something to call mine. I knew there’d be long days and nights, but having a challenge was most exciting Rachel Farrell, senior mortgage broker and managing director, Bloom Capital for me – and boy is it a challenge! The thing that was most attractive was creating and building my own business, meeting so many new people, and, of course, the ability to have uncapped earnings.

Q What has been your biggest challenge as a broker this year?

How does it feel to be named by the ABJ as one of its Like for every other Victorian, COVID-19 has been our biggest Q 20 leading mortgage brokers?

A challenge for the past two years. Moving the office and client meetings remotely has been hard for us. As a team we love to work together side by It’s extremely exciting. I feel as though my hard work is paying off A side, so it’s been hard not to have that interaction. The same thing goes for and getting recognised, which is fantastic. I’m also so proud to be clients – I love getting on the road and seeing everyone in their homes or in the only woman named – a huge achievement and a small step in the our office, so it’s definitely added another layer to the relationship-building right direction for diversity in the finance industry. I think it shows that we’re so successful at. women there are some great opportunities in this industry and if they’re looking for a change, this could be it.

Q What are your plans for 2022?

What are the keys to being Q a successful broker?

Like all brokers, our top priority is our clients and their needs. We of A course want to make sure our existing client base is secure, in addition Putting clients’ needs and objectives first, showing empathy for A each individual situation, and making the whole process easy, to expanding our reach to helping as many people as we can. We will also look to grow our team by hiring additional admin team members and straightforward, and of course fun. It’s important to be aware that this hopefully two to three brokers. Towards the end of 2022, we may look to is a relationship-building business, and if you consider clients as just move into a new office space; however, we love where we are now. AB another number, unfortunately it will not be successful.

Q

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www.brokernews.com.au

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