The first changes from the Royal Commission

Discussion in 'Loans & Mortgage Brokers' started by Marty McDonald, 26th Mar, 2018.

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  1. Biz

    Biz Well-Known Member

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    That Is the only silver lining in all of this provided you're not a tenant!

    People are trying to work out how they are going to borrow more or refinance, I say why bother? May as well sell. If people can't borrow like they could before prices will not being going up for a very very long time. Rising interest rates (a question of when, not if) will only make things worse.
     
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  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    For now, reality in how a debt will be serviced is the new order. Its not a bad thing - Its a reality. The new world of data makes checking this so much easier. You Bpay, card and payments by EFT are record.

    For too long borrowers were allowed to make it up. And some people who benefit from free credit incl brokers, spruikers and developer are now accountable. Not a bad thing.

    Next step has to be reduced credit through reduced brokers and referral channels and reduced fees for what they do write.

    I just worry about when lenders will be allowed more freedom and they go back to old ways of flogging credit. Thats a long way off so hard days are ahead for some. I think great brokers will do well but many will find it tough.
     
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  3. hobartchic

    hobartchic Well-Known Member

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    Fewer buyers in the short term perhaps or you might actually see an uptake in buyers. The critical outcome to tightening credit, assuming lenders and mortgage applicants have overall been responsible, is price. If responsible lending by all parties has been sustained then price will stay the same. If not, they will plunge. Defaults will increase and more sellers will keep piling on.
     
  4. Deck

    Deck Well-Known Member

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    How long before banks use these ? Things could become interesting quickly.

     
  5. Lacrim

    Lacrim Well-Known Member

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    Which will aid landlords in paying down debt. The location of your IPs (where tenants want to live, and where there's no oversupply) is more critical than ever.
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    many skilled Humans already have that innate ability.

    ta
    rolf
     
  7. Deck

    Deck Well-Known Member

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    For what I read, we are quite bad a this as a study was citing a 59% success rate lie detection for a normal person, 65% for a very skilled one and ..75% for the AI.

    Lie-detecting algorithm spots fibbing faces better than humans
     
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  8. TroySeven

    TroySeven Well-Known Member

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    How are the self-employed going argue offset living expenses claimed within their P&Ls?
     
  9. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    They can declare what they pay out of their pocket, but otherwise the banks already assessing with a minimum amount.
     
  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Many dont actually earn anything on the books ..............

    GT3 and Aston DB9 in the garage and 50 k income total for the business doesnt allow one to borrow much regardless of living expenses

    ta

    rolf
     
  11. beachgurl

    beachgurl Well-Known Member

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    On a tangent from this, my white label lender announced this week that any cash out funds not used by the client within 6 months will result in a clawback of the comms earned on that cash out amount. Will make for an interesting time explaining clawback provisions in the Credit Quote document to my clients.
     
  12. Redom

    Redom Mortgage Broker Business Plus Member

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    Interesting - who did this? This is the CIR reforms coming into play. Lenders across the board have announced they'll do this (not make payments on undrawn funds), but the implementation and how has been an unknown for a while. This is probably the first signal of how it may be interpreted across the board.
     
  13. beachgurl

    beachgurl Well-Known Member

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    It was Connective Home Loans. They have both Macquarie and Advantage products so it will be interesting to see if it was those lenders who made the choice or if it was an independent decision by Connective.
     
  14. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    It’s Macquarie - they’ve been doing this for a while now. First cab off the rank - others will follow.
     
  15. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    That's a better outcome than just not paying for cash out in the first place...
     
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  16. Ethan Timor

    Ethan Timor Well-Known Member

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    True but it’s still a bad outcome...

    What if the client draws the cash out after 7 months?

    (Also, wonder what happens if the client draws the cash out and then puts it back the next day or after a while?)

    Had a client that had an IP unencumbered, wanted a refi so he’ll have the funds available to purchase another one (once he finds one). Did it for him, great. Took him months and months to find another one and once he did, got him a loan for that too. Great. Everybody happy.

    With the above witch hunt commissions procedure, the refi work I did would have resulted in $0 commission o_O
     
  17. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Welcome to 1984 :)

    We need to appease the 2 %

    ta
    rolf
     
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  18. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Not unlike parking excess in a offset. Most lenders limit fees to net borrowing.
     
  19. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    got a claw back for unused funds about 6 mths ago, so the policy isnt new
    ta

    rolf
     
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  20. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    If the client uses the funds within12 months you can appeal :)
     
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