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Jessica Darnbrough
Troy Phillips, director of MAS Funder, has challenged the non-bank sector to meet the changing needs of the self-employed market by returning to traditional banking principles.
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Mr Phillips told The Adviser that the self-employed sector is crying out for funding that can effectively meet their changing needs.
He believes the market is ready for a new 70 to 75 per cent LVR product that individually assesses the riskiness of each borrower.
“I’d like to see an ‘underwriters choice’ type product coming into the fore and I believe the non-bank sector is ready to deliver,” he said.
According to Mr Phillips, low doc lending was hijacked by the wrong borrower segment when the products were first widely introduced by banks and non-bank lenders in the late 90s.
“The self-employed product was never meant to appeal to fraudsters and tax cheats, it was a legitimate option for people with complex structures to fund a residential mortgage in a reasonable expected time frame without having to go to a private banker, assuming a private banker would want to deal with them in the first place,” he said.
Moving forward, Mr Phillips believes low doc borrowers should not have their eligibility for a product assessed solely through BAS statements.
“We need to look at old fashioned banking, look at what a borrower has done over 10 years, not a snapshot based on this month or quarter.”
