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Confidence in the non-bank sector has re-emerged with 50 per cent of brokers now more open to writing non-bank products compared to 12 months ago.
Non-bank market share has slumped to around five per cent since the credit crisis hit but after a torrid year mortgage managers and originators are better positioned to offer competitively priced products.
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While capital markets remain sluggish the recent government initiative to inject $8 billion into the non-bank sector has boosted liquidity and demonstrated backing for the sector.
Toowoomba Home Loans’ Paul Taylor would be open to writing more non-bank products as long as they were competitively priced.
“People are nervous about securitised loans [right now], however if the government’s rescue package transpires I believe we will see a return of the non-banks.”
Mr Taylor also believes that more brokers are now considering non-bank products because of the perception that commissions are better.
Paul Woodley, from Woodley Loans, told Mortgage Business that one of the key reasons brokers had not been writing non-bank products was because of the previous lack of availability of competitive products.
“There is generally a lot of unhappiness among brokers towards the banks but we really have been stuck with them – once funding levels are more even I think we will see a strong return to the non-banks,” Mr Woodley said.
“I’d much prefer to use non-banks; my preference would be away from the big banks.”
But according to Mortgage Force’s WA and SA state manager Corey Drew, the big banks’ service levels – which are simply not coping with the increased business – may also have affected broker sentiment.
Mr Drew also believes that a number of competitive products launched over the latter part of November have also helped the non-bank sector.
“We’d like to see non-bank market share pick up because improved competition is really needed – it’s very important non-banks remain in the market.”
“I think a lot of brokers have been reluctant to recommend non-bank products, but as funding improves we might see them recommending non-banks more. Consumers are looking for a good price in the current market – so price is important.
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STRAW POLL
Are you more open to offering non-bank products than you were 12 months ago?
Yes: 50%
No: 46%
Don’t know: 4%
