Adelaide fintech "Joust"

The Australian fintech getting rid of the mortgage brokers

"Joust, an Adelaide fintech which cuts out fees to mortgage brokers by linking home borrowers directly with lenders, has launched an equity crowdfunding campaign to raise $2 million.

The platform, aimed cutting out the middleman and disrupting the $2 billion in fees paid to mortgage brokers each year, has more than 20 lenders bidding in real-time to get the business of prospective borrowers."

 

This has been around for years, it appears to just be a gimmick, it does not pre-qualify you for the loan so most people that 'joust' will be wasting their time as they won't be eligible for the 'winning' loan (and they will get two credit checks one from Joust and another from the Bank).

If I were an investor I would ask 'they have a fully functioning platform, if they were making money why would the owners want to sell off their equity'?

 

To be honest, whilst it sounds like a good idea, the value I always found from my (fantastic) mortgage broker was the discussion about my lending needs, my strategising on the sort and long term plans, and the advice on what is possible or not without wasting my time and energy.

I'd hate to have to wait for some faceless process/platform to spit out a "winner" OR a "rejection" . I think I would also worry about how the various loans compare to each other and whether these platform and the bids are comparing apples with apples...

 

To the extent that these types of things work, they only work where you have 1 PAYE job, 1 credit card, no other existing loans, are a first home buyer, etc. absolutely simple arrangements. Anything more complicated, things just break down.

 

Depends on why users use mortgage brokers. I'm not sure 'getting the cheapest rate' is the only thing on the list of users of brokers. If thats the sole objective, then information is on hand already via a number of similar tools. Getting value and a holistic credit advice is usually a good reason too!

Generally those fintechs that focus more on using AI/tech to provide holistic advice have greater scope to take broker market share (e.g. lendi, etc).

 

Lendi is not a lender they are a broker with a very good interactive online fact finder and product selector. The grunt work is still done by an inhouse broker once the application has been filled in online and choices spat out by the model. Then the normal broker process takes over for collection of payslips, signing of lender forms, submitting to the lender etc

If you look at Rocket loans in the US its similar. It looks online at the consumer end to start with but the a human picks up the file and completes it.

 

Its more a question for loan providers if they really need give a cut from their profit to brokers?
I think going forward, under credit tightening environment aka lesser loans, smaller loans, banks will see brokers margin as low hanging fruit to increase their profitability.

Complex cases will still require expert opinions and can be catered by 'fee for service model' or continue with current kickback model.

 

Fintech / automation is harder than it looks and no one has really cracked it on any scale. A few have come back looking to add brokers into the process as the collection of required info/ documents from "people" is still very fragmented.