Mortgages

Banks move to protect borrowers

Mortgage brokers are under scrutiny to ensure they don't abuse their positions by unethically ramping up their income as the housing market boom eases.

Sunday, March 14th 2004

The Mortgage Brokers Association (MBA) has asked banks to use their backroom systems to identify brokers "churning" - moving clients between banks to ramp up commissions.

The association is also seeking legal clarification on whether mortgage brokers sourcing loans for borrowers from a variety of lenders can properly be described as "free".

Already the association has backed away from using the word "independent" because brokers receive commissions from lenders for securing them business, and now uses words such as "unbiased" or "impartial".

MBA chairman Brian Berry said: "We are also a business that does not charge clients, and that makes the service `free' in one sense."

But paying broker commissions was a cost to lenders, and ultimately passed on to consumers.

How mortgage brokers are paid also lies behind fears that as the housing market slows, they may resort to churning to maintain the healthy levels of commission-based income they have become used to in boom times.

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Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

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