Brokers debate mortgage reduction operators

Monday 13 September 2004

A sizeable number of New Zealand Mortgage Brokers’ Association members want the practice of "mortgage reduction" banned for NZMBA members but others worry that excluding those engaged in such practices will mean the NZMBA has no jurisdiction over them.

By The Landlord

Mortgage reduction companies claim to provide borrowers with a system for paying off their home loans faster, charging upfront fees of $3,000 or more for the service.

But most mortgage brokers already provide such information as part of their normal service with no additional fees involved.

Usually, it is the more naïve borrower who ends up paying mortgage reduction companies’ fees.

At the NZMBA’s recent annual meeting, incoming chairman Geoff Bawden said that while NZMBA rules discourage mortgage reduction companies, they don’t prohibit them.

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