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ISCOVER
Staff Reporter
Advantedge has pre-empted the government’s exit fee deadline and removed the early repayment fees on all of its aggregator home brand mortgages.
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From today onwards, FAST, Choice and PLAN will remove the early repayment fees on their home brand mortgages in a bid to help brokers capitalise on the upcoming regulatory change.
Under new federal government legislation, exit fees for all National Credit Code regulated loans must be abolished from 1 July 2011.
Advantedge’s general manager – lending distribution Brett Halliwell said accelerating the implementation of exit fee removal reflects the funder’s ongoing commitment to supporting broker businesses.
“This is a high profile regulatory change which has received significant media coverage whilst heightening awareness amongst borrowers,” he said.
“It’s important to us to prepare our broker distribution partners early to take advantage of the exit fee ban and the expected increase in interest in non-bank products.”
As a result of the removal of deferred early repayment fees, a partial clawback will be introduced for all new loan applications submitted from 1 July 2011.
The structure introduces a claw back of 50 per cent for loans that discharge between 0 and 18 months.
After this time, no clawback will be applied.
Mr Halliwell said the clawback would set a new industry benchmark.
At present, many of the major banks look to charge 100 per cent clawback for the first 12 months.
“We challenge the other major lenders to follow our lead by matching the new broker friendly clawback level that we have set,” Mr Halliwell said.
“We understand that when a loan discharges within the first 18 months, it is usually due to unexpected circumstances. It delivers a hard knock to the broker when 100 per cent is clawed back because they understandably feel the reward has been taken away for the time and effort they invested to assist the customer.
“Our clawback has been set at a level that we believe is fair to brokers, sharing the burden 50:50 in recognition of the work they have performed.”
