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While brokers are intent on writing more non-bank business, it’s yet to translate into sales.
IN the face of increasing big bank domination brokers appear increasingly determined to give non-bank lenders a go.
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Since the onset of the credit crisis the market share of the major banks has increased considerably. According to a recent report by CoreData, the big four banks alone, post Bankwest and St George acquisitions, accounted for more than 70 per cent of residential lending in the first quarter of this year.
But it would appear the flipside of this market share – an inability to maintain servicing levels – is driving increased broker interest in non-bank lenders.
According to Mortgage Business’ Q2 2009 sentiment survey, which surveyed 601 brokers, 72 per cent say they expect to recommend a non-bank product in the quarter ahead. This compares to the 66.0 per cent recorded last quarter.
Michael Russell, chief executive of Mortgage Choice, says he wasn’t surprised by the findings of the survey although such sentiment hasn’t yet translated through to sales figures.
“A rise in the interest in non-bank lenders, a number of whom are not experiencing the extent of service delivery and turnaround time issues that many others are, is a positive,” he says.
“Of course, it’s only a positive as long as these lenders provide excellent service and a suite of quality products,” he adds.
Mortgage Choice has received increasing feedback from brokers about the challenges slow servicing times are presenting and as a result the brokerage is conducting a series of workshops to showcase alternative lending solutions to brokers.
According to Mr Russell a healthy range of lenders and products is crucial to the longevity of the mortgage industry.
“The health of the mortgage market and the quality of choice it provides to customers depends on the number and range of quality lenders and loan products out there.
“Australian brokers broadening their horizons in terms of lender spread can only be a good move for the industry and the customers we service. It encourages healthy competition between lenders – which usually encourages a high quality of loan products being made available to consumers and more competitive rates and fees.”
