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Westpac has been quick to quash media reports that it will cut the number of broker groups it uses to sell home loans from 87 to 60.

A report in The Australian Financial Review claimed Westpac is poised to cut its network of broker groups by 27 after tightening the accreditation process to weed out underperformers.

A Westpac spokesperson for the bank told The Adviser that while some brokers had lost their accreditations with Westpac, the alleged culling of 27 broker groups was “purely speculative.”

“We ask brokers to write at least one Westpac loan every six months and, if they fail to do that, we ask them to undertake a formal reaccreditation process,” the spokesperson said.

“While the number of individual brokers cut from our network would probably be in the hundreds, I have not heard where or how many groups have lost accreditations, or even if any have been cut.”

According to the spokesperson, Westpac’s decision to implement minimum volume requirements back in July 2009 was done so to improve the Westpac customer service experience.

LJ Hooker has come out in support of the MFAA’s decision to encourage its brokers to become fully qualified professional credit advisers.

MFAA’s proposed framework of tiered professional qualifications will see brokers qualify for a Certificate IV in Financial Services.

LJ Hooker financial services general manager Peter Bromley says this level of qualification is already built into the division’s performance standards for its brokers.

“All our current brokers meet Certificate IV standards, which means they complete 30 hours of CPD a year, have a conversion ratio of 65 per cent, accreditation with a panel of at least 10 lenders and settle at least six loans per quarter,” Mr Bromley said.

“We are fully behind the MFAA’s proposal. It is in keeping with what the industry wishes to offer customers in terms of broker education and professionalism.”

Mr Bromley said the public should be able to feel confident in advice offered by brokers they deal with.

“Giving consumers the confidence that brokers can professionally advise because of their degree of education, experience and qualification is a welcome step forward,” he said.

Businesses have managed to shrug off the effects of four interest rate rises in six months, with business confidence rebounding to an eight year high.

According to the latest National Australian Bank survey, confidence is now back where it was in November.

The surge in confidence comes on the back of news that the number of positions advertised in newspapers and on the internet notched up their biggest gain on record with a 19.6 per cent surge.

The ANZ job advertisement survey, released yesterday, showed the number of jobs advertised had grown to an average of 159,778 per week – just 2.3 per cent lower than the same month a year earlier.

ANZ chief economist Warren Hogan said the data suggested the unemployment rate was likely to keep falling but noted that almost one third of Australian jobs are now part time and the total number of hours being worked across the economy remains about the same as this time last year.

"This indicates a significant degree of spare capacity ... still exists among current employees in terms of their potential to increase work hours," Mr Hogan said.

"Given the recent stellar performance of the labour market and the positive nature of current forward indicators of labour demand, we expect Australia can achieve 30,000 net new jobs this month (keeping unemployment stable at 5.3 per cent)."

But despite the influx of positive data, NAB’s chief economist Alan Oster said the Reserve Bank may hold fire on rates when they meet again in April.

“Our indicative timing for subsequent rate rises of 25 points in 2010 are May, August and November,” Mr Oster said.

“That very much reflects a timing which would allow the RBA to take onboard new information on inflation and activity. That said the exact timing will be very much driven by data.”

Property investors are dominating the mortgage market, new data from Australian Finance Group (AFG) has found.

According to AFG’s latest mortgage index, 34.1 per cent of all mortgages arranged nationally in February were for property investors – the highest percentage ever recorded by the company.

The amount of investor mortgages arranged was 25 per cent higher than the level of investment loans recorded six months ago in August 2009.

AFG’s general manager sales and operations Mark Hewitt said while investor confidence has been rising for several months, the company had not expected the level of investors in the market to be as strong as it was.

“Investors are now the driving force of the market, encouraged by rising property prices in recent months, and the longer term view that a housing shortfall will continue to underpin future price growth as well as rental yields,” Mr Hewitt said.

"We are pleased to see second tier lenders making a strong return in recent months. Borrowers are starting to see these lenders as a genuine alternative to the majors again.”

AFG data showed second tier lenders accounted for 17 per cent of all new loans written in February, more than the double the proportion that was recorded this time last year.

This figure supports the latest Australian Bureau of Statistics data, which found that bank lending had edged backwards to 88.1 per cent of all loans in the fourth quarter of 2009 – down from a high of 92.5 per cent recorded in the first quarter of the year.

Aussie Home Loans is so confident in its broker service that the brokerage has vowed to pay any customer that is unhappy with its service $100.

The mortgage broker’s founder and chief executive John Symond said the new sales scheme, “Aussie Promise to Impress”, was established to encourage potential home buyers to use a mortgage broker.

“We understand that everyone’s home buying and renovating journey is a unique one and our brokers understand that finance needs are just as unique, which is why we offer a tailored service. We believe our service is unmatched within the industry and we’re prepared to put our money where our mouth is by offering $100 to anyone who is not impressed,” Mr Symond said.

In a bid to speed up loan approvals and valuation efficiency and accuracy, Hometrack has launched a new assisted valuation browser-based technology – Hometrack Valuer (HTV).

HTV was developed in conjunction with independent property valuation entity Opteon Property Group, and is described by its developers as the next evolution in assisted (or desktop) valuations.

HTV incorporates data and imagery based on Google Maps, which enables a valuer to carry out an assisted valuation from a remote location while using comparable data.

“Hometrack Valuer represents a leap forward in electronic valuations,” Hometrack chief executive officer Brendan Darcy said.

Mr Darcy said the product – used in conjunction with the company’s data-based valuation tool, Hometrack Automated Valuation Model – would deliver certainty for customers and increase conversions for brokers and lenders.

Opteon chief executive officer Greg Sugars told The Adviser that while the product is aimed at the lender market, it may be accessible to the consumer market over the longer term.

He also said it would slash lender turnaround times. “It is much faster than traditional valuations. With this technology, lender turnaround times could be cut from two days to just six hours.”

By: Staff reporter

Mortgage Brokers have proven themselves to be the first port of call for borrowers seeking mortgage advice.

According to Mortgage Choice’s 2010 First Home Buyer survey, 24 per cent of first home buyers would seek out a mortgage broker first for advice on their home loan, followed by their parents at 22 per cent.

Mortgage Choice senior corporate affairs manager Kristy Sheppard said the desire to use a mortgage broker as a first point of contact was a telling sign that mortgage brokers were perceived by property buyers to be professional and a valuable information source.

“It is terrific to see today’s first homebuyers trust and value the guidance of their mortgage broker. Parents can be a good starting point for general questions about the property purchase process but the mortgage market is constantly changing so it’s crucial to get up to date information,” Ms Sheppard said.

“A reputable mortgage broker can help borrowers navigate the mortgage minefield and find a loan tailored to their situation, prepare for lending requirements, process their loan application and advise of any concessions that may be available. They’ll then help them with any changes, questions or home loan ‘health checks’ in the future.

“Well informed borrowers can make the most of their circumstances by utilising every resource available, then possibly enter the market sooner using strategies such as  saving a larger deposit, preparing for rate rises sooner and sharing the responsibility of home ownership.”

Higher interest rates, tougher lending conditions and the end of the boosted federal government grant are combining to drive many first time buyers out of the property market, a recent survey has found.

According to a broker survey conducted by Loan Market Group, 86 per cent of brokers said a lack of genuine savings was the single biggest reason applications from first home buyers were being declined.

Of the 215 mortgage brokers surveyed, 11 per cent also said “failing credit scoring” was a major reason for banks “terminating” a home loan application.

“These can be a lot of little things which by themselves are minor but cumulatively can cut a swath of destruction through an application,” Loan Market Group’s national operations and risk manager Ivan Karamatic told The Adviser.

According to Mr Karamatic, buyers had been able to use the boosted First Home Owners Grant as a contribution to their deposit but this had become more difficult since the concession returned to its traditional level of $7,000.

A Loan Market online survey of prospective first home buyers found 60 per cent of respondents had put plans to buy a property on hold because of the end of the expanded grant scheme.

Of the 260 first home buyers surveyed, 32 per cent said they were trying to save for a larger deposit while 28 per cent said they had put their plans on hold indefinitely.

But while the number of FHBs has dropped off considerably since last year, Mr Karamatic said FHB activity was still relatively high as good purchasing opportunities were still available.

“33 per cent of those surveyed said they were still looking to buy a property this year,” he said.

“I think we will see the level of FHB activity head back to historic averages, but not just yet. There is still a fair bit of urgency in the market. Property prices are starting to boom and, as such, some FHBs are thinking ‘I better buy now’. So I think there are still a lot of opportunities for brokers to capitalise on this market.”

By: Staff reporter

Firstfolio is looking to grow its business over the next financial year, capitalising on the purge of mortgage brokers triggered by commission cuts and looming regulation.

According to a report in The Australian Financial Review, the mortgage manager is looking to grow its loan book from $20 billion to $30 billion by year’s end through various acquisitions.

“We see opportunities in buying books from businesses which have gone to the wall, or increasing geographic presence through groups that survived the crisis,” Firstfolio’s chief executive Mark Forsyth said.

According to Mr Forsyth, the GFC has left three types of brokers: those which had been squeezed and were seeking to sell loan books; a portion that had not changed their practice but would be helped by improving conditions; and brokers that had overhauled their models to cut costs and profit from the new backdrop.

The mortgage manager has already completed three acquisitions since December last year including First Chartered Capital, Loan Services Australia and Xplore Capital.

Firstfolio sits behind Australian Finance Group and Mortgage Choice in loan book size, but rather than outline expansion targets, Mr Forsyth said he is focusing on lifting shareholder value.

By: Jessica Darnbrough

The Commonwealth Bank of Australia has announced its plans to reduce the loan to value ratio on some of its investment loans from 90 per cent to 80 per cent.

A spokesperson for CBA told The Adviser that the tighter standards, which will take effect from Saturday 20 March, will only affect personal  investment loans.

“Owner occupied home loans will be in no way affected by these changes,” the spokesperson said.

Under the proposed changes, the new maximum LVR will be 90 per cent, except where one of the loan purposes is personal investment, then the maximum LVR is 80 per cent. The same also applies to CBA's line of credit loans.

According to the spokesperson, the changes are part of CBA’s responsible lending strategy.

CBA's head of retail banking, Ross McEwan, told The Herald Sun that the changes followed a comprehensive risk assessment of the bank's $270 billion home loan book.

"The risk assessment showed that these were areas we needed to tighten in terms of credit quality," he said.

"We view this as about improving the credit quality of the book, rather than an effort to haul in home lending."

CBA’s announcement follows Westpac’s decision earlier this year to drop its top LVRs for new business from 97 per cent to 87 per cent.

A spokesperson for the major told The Adviser back in January that Westpac's decision to reduce  its maximum LVR for new customers was consistent with its strategic focus on building stronger relationships with its pre-existing customers.