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Borrowers are now protected by so much paperwork that they are often too overwhelmed to read it, according to the FBAA.
Chief executive Peter White said the association was working with Treasury officials to simplify disclosure obligations so borrowers could better understand their mortgages.
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“While I acknowledge the intention of the act is transparency around terms and conditions, the irony is that there is now so much paperwork, people are not even trying to understand it,” he said.
“There are 60 to 100 pages of disclosure paperwork for a mortgage, and when you add in all of the applications, contracts, guides and the mortgage document itself, it can come to hundreds of pages.
Mr White said although regulators had been trying to protect borrowers, the extra paperwork had actually had disadvantaged them.
“Instead of consumers reading a little bit of what they used to get, they are now potentially reading nothing because it’s too overwhelming,” Mr White said.
“The FBAA is continuing to talk to Treasury and regulators and we are confident of progress.”
Brokers recently offered mixed support to a federal government crackdown on red tape.
