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A non-bank lender has become the latest to announce the removal of clawbacks from its loan products.
Non-bank lender MA Money has removed clawbacks associated with its Vacant Land Loans, which are set to be available across its Prime to Specialist products.
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The lender’s Vacant Land Loans offer loans of up to $1.5 million solely for vacant land with no ongoing development or construction in progress, with a loan-to-value ratio (LVR) of up to 75 per cent.
State manager NSW/Queensland/Victoria at MA Money, Tim Lemon, stated that the change “enhances the flexibility and attractiveness” of this product and aims to cater to clients seeking short-term investment strategies while removing risk to their broker.
“We’re always looking for ways to improve our offerings and provide greater value, so we are tremendously excited to be announcing this initiative to remove clawbacks from our Vacant Land Loan products and enable brokers to keep their commissions,” Lemon said.
“By removing clawbacks on our Vacant Land Loans, we’re giving brokers the confidence to place these loans with us, knowing there’s no risk if their clients decide to refinance in a short period.
“This change underscores our commitment to supporting brokers and their clients with flexible and innovative lending solutions.”
Lemon further stated that a unique feature of this loan product is that the land purchased can be used as sole security, with the borrower being able to draw cash out up to the maximum LVR.
Non-banks doing away with clawbacks
MA Money is the latest non-bank lender to remove clawbacks on its product range following a slew of other lenders, such as Resimac, making similar moves.
Resimac announced in early May 2024 that it has removed all clawbacks on its Specialist full doc and Specialist alt doc products, which came into effect from 1 May 2024.
Speaking to The Adviser at the time of the announcement, Resimac’s general manager, distribution & marketing Chris Paterson said that customers are “looking to transition into a prime loan as quickly as possible” on specialist loans in particular.
“[The reason] we removed clawbacks is if the customer is looking for a prime loan within the clawback period, the broker doesn’t lose,” Paterson said.
“We wanted to have the broker not be impacted by the client looking for a prime option if they leave Resimac.”
Furthermore, both Better Choice and Rate Money announced over the second half of 2023 alterations to their clawback policies.
Better Choice removed all clawbacks for their brokers in order to help brokers who sought to diversify into commercial lending, while Rate Money reduced clawbacks for its brokers on its Elevate product line for loans up to $2.5 million, while also removing application and valuation fees.
Additionally, non-bank lender Mortgage Ezy removed clawbacks on 80 per cent of its total products (a total of 28 products) in July 2023, which included prime loans, alt doc and lo doc loans, expat loans, self-managed super fund loans, and non-resident loans.
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