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ISCOVER
Jessica Darnbrough
Sections of the mainstream media have a launched a scathing attack on brokers.
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In the Sunday Telegraph yesterday, CHOICE’s Matthew Levey warned borrowers to be wary of dealing with mortgage brokers as they are “salespeople". The article claimed brokers could also potentially be pushing borrowers into the wrong loan to satisfy their own hip pockets.
The article opened with the statement that mortgage holders "may be paying thousands of dollars more in interest" than they should because a mortgage broker has given them "conflicted" advice.
The latest CHOICE claims are somewhat ironic after the consumer group made its own failed attempt to break in to broking on a grand scale last year. The unsuccessful One Big Switch program in 2011 would have potentially netted the group millions of dollars in commission had it been successful.
The Telegraph's article's author, Jessica Irvine, also implied that brokers are giving biased advice and pushing borrowers towards more expensive home loans in a bid to receive greater commission payments.
“Brokers are failing to adequately disclose the commissions they receive from lenders when they sign up borrowers for a loan,” the article read.
But, MFAA chief executive Phil Naylor told The Adviser that these claims were “unfounded” and “untrue”.
“This really is a disgraceful exercise in misinformation,” Mr Naylor said.
“The article is bereft of any good research. All MFAA brokers have and always will disclose their commission payments to the borrower.
“Borrowers aren’t stupid. They know brokers receive commissions. If the industry was giving bias advice and pushing borrowers into the wrong loans in a bid to grab higher commissions, how would the industry have ever gained 42 per cent market share.”
