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The association’s head has applauded a mortgage lender’s announcement to reduce clawbacks.
Managing director of the Finance Brokers Association of Australia (FBAA), Peter White, has welcomed Bluestone Home Loans’ announcement of reducing clawbacks on eligible Prime Alt home loans settled from 1 August 2024.
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The lender has slashed the clawback period from 18 months to six months. On the heels of this move, White has called on “all other lenders to follow”.
“Clawbacks periods across the board should all be considerably less than 18 months,” White said.
“The FBAA has led the way in campaigning against the current unfair clawbacks and we continue to talk to lenders and government about this.
“Bluestone has recognised that in this competitive market, they need to stand out, and my message to lenders is that being fair to the broking channel by reducing clawbacks will not only make you stand out, but will surely generate business for you.”
Bluestone is the latest lender to make a reduction or removal on clawbacks. In mid-June non-bank lender MA Money announced that it has removed clawbacks associated with its Vacant Land Loans, which are available across its Prime and Specialist products.
Additionally, Resimac announced in early May that it has removed clawbacks on its Specialist full doc and Specialist alt doc products, which came into effect from 1 May 2024.
Better Choice and Rate Money also announced over the second half of 2023 changes to their clawback policies.
White said: “Finance and mortgage brokers will always put the best interests of the customer first because not only are we legally obliged to, but we want to ensure that our customers continue to use and trust our industry.
“But in this competitive market, if two products are identical, the one with the lesser clawback period will definitely be noticed.”
Minister meets with FBAA on clawback policies
Last month, a meeting took place (8 July) between the Assistant Treasurer and Financial Services Minister Stephen Jones MP and the members of the FBAA to discuss the “unfair clawback” structure.
Minister Jones met with White, aggregators, and leading FBAA finance brokers from across the country at the FBAA national office in Queensland to hear firsthand accounts of how the structure of clawbacks and net-of-offsets was impacting brokers.
While the minister has not outlined any actions from the meeting, he has reportedly asked the FBAA to put together a list of top priorities and outcomes they want to see brought about.
White said that the association would now put together “a strategic list of actions and outcomes on these matters and other issues that will drive much-needed change and bring fairness to brokers”.
[RELATED: Financial Services Minister meets industry about clawbacks]
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