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The broker association has flagged the issue of retention teams undercutting offers at the last minute, and the long delays in loans being discharged, to Treasury officials.
With concerns growing in the broking industry that lenders are discharging underhand tactics when it comes to discharging loans – including prolonged delays to releasing loans being refinanced out and last-minute deals put forward by retention teams – the Mortgage & Finance Association of Australia (MFAA) has said that it has brought these issues to the attention of Treasury.
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Speaking to The Adviser, the chief executive of the MFAA, Mike Felton, said that while the issue of channel conflict “is nothing new”, he added that the growing issue of retention teams “undercutting brokers” was “a significant one and goes hand-in-hand with the problem of poor discharge timeframes from certain lenders, which can enable sustained and extended lender retention activity”.
“It is also clear there are instances of lenders not putting their best foot forward in the retention pricing provided at the outset, which is resulting in wasted time and effort, unnecessary cost and impacting the efficiency of our industry,” he said.
“Whilst channel conflict is complex and likely to require a variety of measures to manage, improved early transparency in pricing and shorter discharge periods can, in our view, only assist.”
The MFAA CEO told The Adviser that the issue was one that “requires broad-based attention from the associations, aggregators, lenders and regulators in order to manage and minimise the occurrence thereof”.
From an association perspective, he told The Adviser that the MFAA had, in recent weeks, been having further discussions with Treasury on “this exact matter of lender retention behaviour and the related issue of extended discharge timeframes and the consequences thereof”.
Mr Felton highlighted that these discussions had been ongoing over time, flagging that following “extensive consultation involving the MFAA and others” in November 2020, the Australian Competition and Consumer Commission (ACCC) released its final Home Loan Price Inquiry report, which examined how the home loan market works and put forward potential improvements that could be made.
Among them was a recommendation that “all lenders should be subject to a maximum time limit of 10 business days to complete the discharge process.”
“We will continue to have discussions with both the ACCC and Treasury about how this recommendation can be put into effect,” Mr Felton said.
[Related: Brokers warn of rising channel conflict behaviours]
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