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ISCOVER
Staff Reporter
Broker commissions and competition should not be adversely impacted by the removal of DEFs, an industry figurehead has claimed.
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"The removal of DEFs for the non-bank sector is another driver for competition. It will allow us to take the lead in service, advice and responsible lending," LJ Hooker Finance general manager Peter Bromley said.
LJ Hooker has already removed the DEF from its classic home loan before the government deadline and without negatively impacting its broker members.
"We made strategic changes to our home loans, such as providing direct access to the credit assessment team, to give our brokers the confidence to write loans that suit a customer’s circumstances. With more control, brokers should not fear clawbacks from DEF," Mr Bromley said.
In removing the DEF from its classic home loan product, LJ Hooker Finance introduced a 100 per cent clawback for 12 month loans and 50 per cent clawback for 24 month loans, in line with the industry.
However, Mr Bromley said the lender will bear some of the clawback burden across its national broker network.
"Lenders need to take a common sense approach to clawbacks. LJ Hooker Finance has included an exemption policy, which will ensure that if customers have a genuine reason for exiting the loan, such as redundancy or divorce, the clawback won’t apply," he said.
In the current lending market, Mr Bromley said more brokers need to focus on how they can offer a ‘complete service’.
"Via the LJ Hooker real estate network, our brokers work closely with all the parties involved, from property experts to credit assessors. This helps them provide a holistic service and advice to customers on home finance," he said.
"We are supporting our brokers to address their real challenge - how to build relationships with customers to get the right product the first time so they stay with the loan.”
