Aren’t mortgage applications tough enough?

From Mortgage Professional Australia.

Amid regulatory and market concern, banks are scrambling to make mortgage applications tougher, leaving brokers to pick up the pieces, writes MPA editor Sam Richardson

Although ASIC and APRA didn’t exist, applying for a mortgage in 1960s Australia was a highly regulated business. The government controlled not only lending conditions but even your interest rate, and you’d have to head to a branch to apply for a loan. Now you can apply without ever setting foot in a bank or even leaving your computer.

It’s become easier to get a mortgage; for some, too easy. Over four days in late September two major banks added extra checks to an already-extensive application process. ANZ introduced a Customer Interview Guide requiring brokers to ask questions about everything from a customer’s Netflix subscription to whether they were planning to start a family. Three days later CBA introduced a simulator that would show interest-only borrowers how their repayments would change and affect their lifestyle. Customers would be required to fill in an ‘acknowledgement form’ to proceed with an interest-only application.

ANZ and CBA are trapped between a rock and a hard place. On one side is the mantra of customer convenience and choice, but on the other the lenders and regulators are desperate to avoid public embarrassment. Brokers have been caught in the middle.

Not tough enough

Two weeks before the majors took action, Swiss investment bank UBS published an alarming and controversial report. Surveying 907 recent borrowers on their experience of getting a mortgage, it argued that the “ease of attaining approval had improved over every prior vintage back to the 1990s”.

Therefore, UBS concluded, “we believe there is little evidence to suggest customers are finding it more difficult to attain credit or that mortgage underwriting standards are being tightened from a customer’s perspective”. That was a problem, UBS argued, because the banks had already written $500m of ‘liar loans’ based on inaccurate information, with ANZ the worst affected.

UBS’s conclusions have been met with intense criticism. ASIC senior executive Michael Saadat told the Senate that, because of the sophistication of the verification process, “we think consumers are probably not the best judge of what banks are doing behind the scenes to make sure borrowers can afford the loans they’re being provided with”.

Yet while it defends lending standards with one hand, ASIC has been strengthening them with the other. The regulator is currently embroiled in a long-running court case against Westpac over the bank’s estimation of customer expenditure, in addition to dictating tougher rules for interest-only lending in April and preparing a ‘shadow shop’ of brokers later this year. Additionally, the Consumer Action Law Centre told MPA that verification was “critically important” and that it supported high standards. For Consumer Action, ASIC and UBS, application standards are still very much a work in progress.

The cost of compliance
Brokers have a very different opinion. Mortgage Choice CEO John Flavell has publicly stated that “lenders are more scrupulous than ever”, explaining that “new legislation requires brokers and lenders to forensically examine a borrower’s assets and liability situation”.

While no friends of the broker channel, UBS noted that brokers “arguably do much of the application heavy lifting” and brokers can attest to the impact of tightening lending standards. Turnaround times have actually got worse over the past year, according to 40% of respondents to MPA’s Brokers on Banks survey. Compliance and bank mismanagement have negated the gains of huge investments in technology, the experience of one broker suggests: “I have been doing this for 20 years. Twenty years ago we were getting unconditional approval in five days. We are still struggling for that 20 years later.”


“If I go back four or five years, I was amazed at just how loose many of the processes were” – Martin North, Digital Finance Analytics

Easier, not shorter
Martin North, principal of consultancy Digital Finance Analytics, has studied mortgage applications for years and has observed an improvement in standards. “If I go back four or five years, I was amazed at just how loose many of the processes were and in fact what would happen is the information would be captured on the form but never used in the underwriting process,” he says.

Progress has been driven not by extra questions for borrowers, North explains, but by an increase in documentation required from applicants. North believes there is room for improvement, however, particularly when it comes to understanding borrower expenditure. Only half of households have formal budgeting, he explains, and “whether it’s a real lie that households have not been truthful with the lenders, or whether they’ve got the best estimate and it might not be accurate, is probably the moot point”.

Applications can be made easier, North argues, but “easier doesn’t necessarily mean shorter”. Improvements in technology could improve underwriting standards for banks while pre-populating interactive application forms for consumers and offering time-saving solutions to brokers.

This is already occurring. Realestate.com.au’s new home loans offering integrates an online calculator into its website, which indicates how a borrower’s lifestyle would be impacted by mortgage repayments on a particular property. When borrowers apply for conditional approval the calculator’s details are fed into the form, allowing a quick online form to lead to instant approval.

For brokers, Advantedge has introduced two mobile apps to make collection of identification documents faster. Looking further ahead, banks have committed to sharing data within two years, which according to Australian Bankers’ Association chief executive Anna Bligh means that “at the click of a button, Australians will be able to directly share their transaction data with other banks or financial services”.

Should technology meet these lofty expectations, today’s paper-heavy application process could eventually be viewed in the same way that we view the branch of the 1960s today. Yet until this technology kicks in, brokers should prepare themselves for more heavy lifting.

Broker market share rises to a record 55.7% in September quarter – MFAA

From MFAA.

Australian finance brokers settled 55.7% of all residential mortgages during the September 2017 quarter, up from 53.6% in the same quarter last year, the latest industry data reveals.

Mortgage and Finance Association of Australia (MFAA) CEO Mike Felton said this represented a record $51.77 billion worth of residential home loans settled by mortgage brokers nationally in the September 2017 quarter, up from $48.57 billion in the September 2016 quarter.

“The broker share of the residential market is now at an all-time record which is reflective of the excellent value and service the broker model delivers,” Mr Felton said.

“The dollar values represent a pleasing 6.6% increase from the September 2016 to the September 2017 quarter,” he said.

The $51.77 billion settled by brokers represented a market share of 55.7% of all residential home loans as a percentage of ABS housing commitments. Comparing the market share on a year-by-year basis, this was an increase of 2.1% from the September 2016 quarter and 3.1% higher than the September 2015 quarter, comparator’s quarterly survey reveals.

“What a great result this was in these market conditions. The results suggest a rising trajectory for the broker-originated lending share and are further evidence of the trust and confidence consumers have in their broker,” Mr Felton said.

“Of course these figures need to be viewed in the context of the growth in broker numbers for the same period which is a statistic that will only be made available in the first quarter of next year but the latest surge in broker market share in both percentage and value terms in extremely positive,” he said.

Research group comparator (a Corelogic business) compiles quarterly broker statistics by calculating the value of loans settled by 19 of the leading brokers and aggregators as a percentage of the ABS Housing Finance commitments. The MFAA releases these statistics each quarter.

Major aggregator issues fraud warning to brokers

From The Adviser.

One of the industry’s largest aggregators has said that brokers are “on the front line” of preventing mortgage fraud as regulators turn their attention to the third-party channel.

In a compliance update this week, Connective pointed to findings from the 2016 Veda Cybercrime and Fraud Report, which recorded a 27 per cent year-on-year increase in falsifying personal information.

“Falsified documentation — particularly documents that verify a customer’s income — is the most common type of fraud that a mortgage broker is likely to encounter,” the aggregator said.

“It is your responsibility to ensure [that] the income declared on a customer’s loan application truly reflects their actual income. That puts you on the front line in terms of mortgage fraud prevention.”

Since 2010, ASIC has investigated more than 100 matters relating to loan fraud, and it banned, suspended or placed conditions on the licenses of more than 80 individuals or companies.

“We can only expect this scrutiny to intensify,” Connective said. “Quite recently, one mortgage broker was actually jailed for five years for colluding with clients over fraudulent loan applications.”

The award-winning aggregator urged brokers to carefully check income and verify living expenses by “studying” payslips and bank statements.

“You should check carefully to ensure that these documents, particularly the payslip, contain the information you would reasonably expect to see, and make an effort to check [that] the documents have not been altered or doctored.”

Connective provided this list of what should appear on a payslip:

  • Employer’s and employee’s names
  • Employer’s Australian Business Number (if applicable; verify by looking it up online)
  • Pay period
  • Date of payment
  • Gross and net pay
  • Hourly rates and amount paid
  • Any allowances or bonuses
  • Superannuation deductions
  • Any other deductions (such as child support payments, HECS payments)
  • Leave balances
  • A year to date summary

“If you are in any doubt, it is a good idea to ask your customer’s permission to call their employer and verify the information in their payslip,” Connective said. “If they refuse to give you permission, this can be considered a red flag.”

Back in June, Equifax BDM Steve Arsinoski informed brokers at a Pepper Money roadshow that 13 per cent of frauds reported were targeting home loans and there has been a 25 per cent year-on-year increase in frauds originating from the broker channel.

NAB streamlines loan process for brokers

From Australian Broker.

National Australia Bank (NAB) has announced a series of changes that will make its digital home loan capabilities more efficient for brokers and their clients.

The bank has introduced two online verification tools, IDme and ZipID, that allow brokers to securely collect customer identification from their mobile devices. NAB will also add DocuSign to its suites of tools in 2018 so customers can sign documents anywhere from their phone or tablet.

“We are focused on using smart technology to make it easier for brokers to both collect customer information and submit documentation, simplifying the home loan process,” said Steve Kane, NAB general manager of broker distribution.

These improvements have been rolled out as part of the bank’s Helping You Accelerate campaign which seeks to enhance the home loan experience for both brokers and customers.

Brokers will gain access to a variety of digital tools and personalised support from NAB to help guide them through the home loan process and deliver a positive experience to clients.

“In 2017 we have made a range of changes to make submitting home loan applications easier, simpler and more efficient for brokers and their customers,” said Kane.

The Helping You Accelerate campaign will help brokers get the most out of the support NAB offers by integrating its tools and assistance into a simple, step-by-step guide, he added.

“It’s yet another way we are showing our commitment to the broker channel.”

Over the past 12 months, NAB has rolled out a number of other initiatives to assist brokers such as its renewed small business offerings for SME clients and the Customer Adviser Broker Program which saw the bank install support experts in more than 20 branches with the specific remit of on-boarding broker clients.

“These initiatives are just a few examples of how NAB is listening to the insights of our brokers and continually improving the broker-customer experience. It’s just one step closer to becoming the bank for brokers,” Kane said.

Brokers should ‘move away from being a broker’

From The Adviser.

As technology and artificial intelligence make loan processing easier to automate, brokers should be looking to move from being a broker toward having “a professional mortgage practice”, a mortgage industry veteran has said.

According to author, broker and High Trust mortgage sales training specialist Todd Duncan, brokers should be focusing on improving culture and building trust if they are to succeed, as the dominance of technology means that “the trust barometer is really suffering”.

Speaking at The Adviser’s US Study Tour in San Francisco last week, Mr Duncan explained: “I want you to think about the decision you make as a leader, in terms of culture. I want you to think about how you’re building and running your organisation. I want you to be thinking about what is the strategic advantage that everybody in my company has in any customer interaction. And to understand that the measurement in life of any company — whether it be product, culture or the final relationship a customer has with you and the overall experience — is based on trust.

“Because what we see in the world is that the trust barometer is really, really suffering right now. We see world trust declining, we see corporate trust declining, we see financial sector trust declining, we see trust in a one-to-one relationship being held at suspicion if there’s not some direct referral, or some previous knowledge or existence of that person and what they do. And what I know about trust is that it really becomes the most important selling proposition that anybody has in this room.”

However, Mr Duncan acknowledged that trust is the “hardest” aspect of building a successful business.

“We can spend our entire career building an organisation around trust, but it can be gone like that [in a click]… And the decline of trust can absolutely bury a company, can tilt a company from forward-thinking growth to being reactive and respondent, all the way to non-existent.

“So we need to think about how every person on our team has to be not only an initiator of trust, an embracer of trust, a creator of trust, but also an endorser and a practitioner of trust. Because it is the one thing that gives you a strategic advantage in the marketplace.”

Establish an emotional connection ‘mandate’

Mr Duncan gave the example of the US bank Wells Fargo, which recently lost billions of dollars of deposits because of a perceived “low trust culture, with incentivised sales and compliance and regulation deficiencies”.

He said that the best companies, therefore, make it a “mandate” to have every sales activity centre based around empathy and emotional connection, as that is the unique trait of humans that technology has not been able to replicate — and is one which is the fastest at establishing trust.

The Duncan Group founder said: “It’s not about coverage, it’s not about advertising, it’s not about marketing, it’s not about any of that. It is about, at the very essence, the heartbeat between two human beings. One’s a specialist and one’s in need of advice around the most important decision they’re ever going to make in their household, which is buying and financing real estate…

“Plus, customers with an emotional investment in the business are more likely to turn into repeat long-term customers, and customers with an emotional connection to your business are likely to recommend your business to others.”

Specialisation is key

Mr Duncan added that specialisation was also a key trait to have, as there are an increasing number of products, rates and mortgage technology out there that can cause confusion.

The High Trust founder and CEO gave the example that when searching for a “do-it-yourself mortgage” on Google, there can be more than 17 million results. Further, there are 72 million results for “online mortgage”, which means that brokers are at the forefront of sifting through the noise and reducing customer confusion.

He outlined that brokers should therefore start building trust by moving away from branding themselves as brokers, but instead marketing their companies as “a professional mortgage practice”.

“I would even move away from being a broker. I would rebrand myself, I would rebrand the way that I operate. I want to position myself as having a professional mortgage practice, and I want this to be my brand.”

Mr Duncan concluded: “I think you need to begin to look at what you’re doing in the marketplace to have unadulterated, unequivocal, rating-supported, compliance-driven trust.

“Because if you have high trust, you shorten sale cycles. If you have high trust, you lower loan expense. If you have high trust, you accelerate the referral networks that are available to you in your marketplace that are just screaming for this kind of solution. And if you don’t have that, then you have nothing.”

REA Group to acquire a majority stake in Smartline

From Australian Broker.

REA Group announced today that realestate.com.au has entered into an agreement to acquire a majority stake in mortgage broking franchise business, Smartline and has also entered into a strategic mortgage broking partnership  with National Australia  Bank (NAB).

Smartline is a leading Australian mortgage broking franchise group with over 300 advisers nationally, settling more than $6bn in loans annually with a total loan book of approximately $25bn. realestate.com.au will acquire an 80.3% stake in Smartline, with the remaining 19.7% shareholding to be retained by the existing management team. This team will continue to be led by executive director and co-founder Chris Acret and will operate under its current structure and brand.

The purchase consideration of $67m will be funded from existing cash reserves. The minority shareholders hold a put option to sell the remaining 19.7% of shares which can only be exercised after three years, at a price dependent on the financial performance of Smartline. If not exercised, REA will acquire the remaining shares at the end of four years. The transaction is expected to complete in late July 2017.

realestate.com.au and NAB have also agreed to build a mortgage broking solution which adds to the strategic partnership announced in December 2016 to create an Australian-first end-to-end digital property search and financing experience. To help achieve this, NAB will provide an opportunity for its Choice Home Loans brokers to join this new broking solution.

The strategic partnership with NAB enables REA to offer a realestate.com.au broking service at the launch of realestate.com.au Home Loans later this year. The acquisition of Smartline will give the REA Financial Services segment greater scale and capability for the long term.

With an average monthly audience of  5.9 million, realestate.com.au has the largest audience of property seekers in Australia. This investment and partnership further strengthens REA’s move into financing, an integral part of buying a property. The home loan market in Australia is worth approximately $400bn a  year, of which more than 50% are obtained through mortgage brokers. The share of mortgages originated through broker channels continues to increase.

It is expected that REA’s entire Financial Services segment will contribute revenue, net of broker commissions, of between $26m to $30m and EBITDA between $7m to $11m in FY18.

REA group CEO Tracey Fellows commented: “Building a strong presence in the broker market channel is an important part of our financial services strategy. These investments allow us to enter a new market with two of the industry’s most trusted and successful mortgage broking operations.

“Providing a broker solution will complement the digital search and finance experience we are building in partnership with NAB on realestate.com.au. It’s about giving people greater choice when selecting the right home loan for them, ” said Fellows.

Smartline executive director and co-founder, Chris Acret commented: “This investment is a great strategic fit for both businesses. It’s born from a shared vision to build a market-leading home loan offering, marrying our trusted network of brokers with realestate.com.au’s leading digital capability.”

Brokers losing clients as channel conflict thrives

From The Adviser.

Mortgage brokers have grown increasingly concerned about channel conflict over the last 12 months and singled out which lenders are costing them business.

The Adviser surveyed 766 brokers over two days last week and found that 88 per cent were more concerned about channel conflict than they were 12 months ago.<

Over 93 per cent of brokers cited the major banks as their biggest concern.

More than half of brokers surveyed (55 per cent) said channel conflict had influenced which lenders they recommended to clients over the last 12 months. However, 74 per cent of brokers said channel conflict would influence which lenders they recommend to clients over the coming 12 months.

Over 78 per cent of brokers admitted they had lost a client as a result of a direct approach from a lender. Of those brokers who lost a client through channel conflict, 97 per cent said the major banks and their subsidiaries were responsible.

The survey results are part of a well-established trend taking place in the third-party channel. As fears mount over channel conflict and the majority of brokers admit to losing clients, sentiment towards the big four banks is clearly trending downward.

Aggregators have reported a notable shift in the flow of mortgages to the majors. The latest AFG Competition Index, released in March, found that the big four lost 6.55 per cent share of broker-originated loans over a 12-month period.

The major banks and their subsidiaries (ANZ, CBA, Bankwest, NAB, Westpac, Bank of Melbourne, Bank SA, and St.George Bank) saw 65.25 per cent of all mortgages written to them through the broker channel in the quarter to February 2017, according to the Index.

While this figure is up from the low of 64.09 per cent in the quarter to December 2016, it is markedly down from the comparative period last year, when the majors accounted for 71.8 per cent of all mortgages written by the third-party channel.

Meanwhile, information gathered by Momentum Intelligence for its Third-Party Lending Report: Major Banks 2017, suggests that the dominance of the big four banks is being undermined by a growing dissatisfaction among mortgage brokers.

ASIC’s Michael Saadat on the remuneration review

From Mortgage Professional Australia.

As brokers, lenders and consumers go head-to-head over ASIC’s remuneration review, the man behind it gives MPA editor Sam Richardson an insider’s view

ASIC launched its review of broker remuneration in November 2015, and since then brokers have talked about little else. It’s very possible you’ve at some point criticised ‘those bureaucrats at ASIC’; if so, Michael Saadat is your man. You won’t find Saadat’s name in the review, but ASIC’s senior executive leader played a huge role in its production, staying behind the scenes. Now, two years later, he’s finally free to talk about the review and how it could change your business.

What ASIC wants
Over two years ASIC collected 200 million data points from 1.4 million home loans, before boiling that data down to 243 pages. “It was a very time-consuming process,” Saadat recalls. “Not only did we look at the raw data and provide conclusions, but we also controlled the data for customer characteristics.”

In their quest to achieve an ‘apples for apples’ comparison of broker and non-broker customers, Saadat and his team broke down comparisons into, for instance, the difference in loan amounts taken out by low-income customers going to brokers and to banks.

Now ASIC is explaining its methodology and the data it has collected to the industry.

“We’ve had a few roundtable discussions with stakeholders; we’re planning on having more, and when we speak at industry events or conferences we will definitely be discussing the report and taking questions from people who are interested in hearing more about it,” Saadat says. At the time of writing he was confirmed to speak at the Annual Credit Law Conference in October.

These discussions will chiefly concern ASIC’s six proposals. Firstly, ASIC wants to change the standard commission model to take into account factors other than loan size (1). It also recommends moving away from bonus commissions (2) and soft-dollar benefits (3). ASIC believes there should be clearer disclosure of ownership structures (4) and proposes establishing a new public reporting regime on consumer outcomes and competition in the home loan market (5). Finally, ASIC wants to improve the oversight of brokers by lenders and aggregators (6).

Now that the review has moved into the consultation phase, Saadat is effectively powerless. Under Minister for Revenue and Financial Services Kelly O’Dwyer, the Treasury will be managing the process, in which industry associations, lenders, aggregators, consumer groups and individuals can have their say on the proposals before the end of June. Saadat, however, will not be taking part: “We wouldn’t put in a submission to our own report.”

On the sidelines
ASIC is now consigned to the role of spectator, left on the sidelines, observing the furore surrounding the separate Sedgwick review, which published its final report a few weeks after ASIC’s.

Stephen Sedgwick’s Australian Bankers Association-sponsored review ran concurrently with ASIC’s, but Saadat insists there was no collaboration between the two. “[ASIC] did not share any data with him that has not been made public by ASIC,” he says.

Nevertheless, in its final report ASIC did repeatedly refer to Sedgwick’s review and was condemned for doing so by the MFAA and FBAA.

ASIC was right to refer to the Sedgwick review, Saadat insists: “We know the Sedgwick review only covers the banks, and that’s why we said in our report that the banks need to work with the rest of the industry in responding to [ASIC’s] recommendations.”

When writing his report, Saadat had no idea what Sedgwick’s recommendations would be; in fact Sedgwick’s final report was published just 30 minutes before Saadat talked to MPA.

Sedgwick’s recommendations go much further than ASIC’s, urging banks to decouple commission from loan size. ASIC had recommended a change to the standard commission model to avoid incentivising brokers to write larger loans, while recommending that banks work with brokers to develop a response.

Instead the major banks, on the day Sedgwick published his recommendations, all agreed to implement them in full by 2020. This unilateral decision bypassed brokers, ASIC and the Treasury’s consultation process.

Despite this, Saadat says he is “pleased that industry is working to improve remuneration structures to create better outcomes for consumers, and improved trust in the sector”.

Acknowledging the review and the banks’ response, he “encourage[s] all industry stakeholders to provide feedback to Treasury as part of the current consultation process”. Commissions, in Saadat’s view, “are obviously commercial arrangements, and it’s up to both individual banks, aggregators and brokers businesses to work out what those commercial arrangements should be”.

Expanding ASIC
Regardless of whether Saadat or Sedgwick get their way, ASIC’s remit looks likely to expand. Sedgwick and the banks want ASIC to enact regulation to facilitate a move to a new commission structure, while ASIC will play a role in implementing whatever rule changes the government decides to introduce after June. wFurthermore, Saadat explains, “ASIC’s ability to intervene may also be bolstered by law reform proposals that are currently being considered by government, including those recommended by the Financial System Inquiry”.

Already Saadat has more immediate work on his plate: a shadow-shopping of brokers by consumers, which he will start planning by the end of 2017. “It is early days,” Saadat says. “We’re planning on commencing that work before the end of this calendar year, and are still working through the detail.” Shadow shopping will take place, Saadat confirms, regardless of the Treasury’s ongoing consultation process on the remuneration review, and “once it kicks off it’s going to be a pretty significant piece of work”.

ASIC’s work will not end with commissions. Instead Saadat and his team are faced with a Sisyphean task. The role of referrers was flagged by the review for further investigation, while consumer groups have demanded more oversight of cross-selling. And, says Saadat, the data that was published was just the tip of the iceberg.

For now it’s up to the industry to make changes, he says. “It was more about us trying to get the industry to respond without being forced by legislation to have change imposed upon them. We think the industry has an opportunity to respond and to take positive steps to make changes that will deliver wimproved consumer outcomes without necessarily needing the government to legislate for changes.”

Former Aussie Home Loans mortgage broker permanently banned by ASIC

ASIC says it has permanently banned a former mortgage broker, from the credit and financial services industries.

The bans follow an ASIC investigation which led to the former mortgage broker with AHL Investments Pty Ltd (trading as Aussie), being convicted in Downing Centre Local Court on eighteen charges relating to home loan fraud. On each of the eighteen charges, he was convicted and released upon entering in to a recognizance of $1,000 with the condition that he be of good behaviour for three years (refer: 16-293MR).

ASIC’s investigation found that he provided documents in support of eighteen loan applications knowing that they contained false or misleading information.

The applications contained letters which purported to be from the applicant’s employer. These documents were false and in most instances, the loan applicant had never worked for the particular employer.

He has the right to appeal to the Administrative Appeals Tribunal (AAT) for a review of ASIC’s decision.

Background

On 5 July 2016, through his solicitor, he pleaded guilty to seventeen charges under section 160D of the National Consumer Credit Protection Act 2009 (the Credit Act) and one charge under the former Section 33(2) of the Credit Act while he was engaging in credit activity on behalf of Aussie. Section 160D (and the former Section 33(2)) makes it an offence for a person engaging in credit activities to give false or misleading information or documents to another person.

He provided false employment documents to secure approvals for home loans, submitted to Westpac Banking Corporation (Westpac), Australia and New Zealand Banking Group (ANZ) and National Australia Bank (NAB) (refer:16-219MR).

On each of the eighteen charges, He was convicted and released upon entering into a recognizance of $1,000 on the condition that he be of good behaviour for three years (refer:16-293MR).

Since becoming the national regulator of consumer credit on 1 July 2010, ASIC has investigated in excess of 100 matters relating to loan fraud and has achieved many enforcement outcomes against the offenders. The outcomes range from undertakings by persons to voluntarily leave the industry, to bans and prosecutions.

To date, ASIC has banned, suspended or placed conditions of the licence of 80 individuals or companies from providing credit services (including 35 permanent bans). Through the Commonwealth Director of Public Prosecutions, ASIC has brought criminal prosecutions against 14 credit service providers; with 12 having been convicted of fraud or dishonesty offences relating to the provision of false and misleading information or documents to lenders in client loan applications.

ASIC permanently bans Perth mortgage broker

ASIC says it has permanently banned a former Perth-based finance broker from engaging in credit activities.

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ASIC found that the broker engaged in misleading conduct by providing false income supporting documents to Westpac Banking Corporation Limited in support of home loan applications for three of his clients in 2015. Only one of the three loan applications was approved.

At the time, the broker was operating his own finance broking business through his own credit licence under the trading name Active Approvals. His credit licence was cancelled in April 2016 at his request.

ASIC Deputy Chairman Peter Kell said the banning reinforces the strong message to any broker considering engaging in misleading conduct.

‘ASIC will not hesitate to permanently remove those who engage in misleading conduct from the industry,’ Mr Kell said.

The broker has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

Background

Since becoming the national regulator of consumer credit on 1 July 2010, ASIC has investigated in excess of 100 matters relating to loan fraud and has achieved many enforcement outcomes against the offenders.

The outcomes range from undertakings by persons to voluntarily leave the industry, to bans and prosecutions. To date, ASIC has banned, suspended or placed conditions of the licence of 77 individuals or companies from providing credit services (including 33 permanent bans).

Through the Office of the Commonwealth Director of Public Prosecutions, ASIC has also brought criminal prosecutions against 14 credit service providers; with 12 having been convicted of fraud or dishonesty offences relating to the provision of false and misleading information/documents to lenders in client loan applications.