We are calling on the Prime Minister Scott Morrison and Treasurer Josh Frydenberg to ignore the recommendation made by the Banking Royal Commission to change Mortgage Broker remuneration.
We also call upon the Opposition Leader and Shadow Treasurer to pledge that they will ignore this recommendation, should they win government.
Owning a home is the great Australian dream that has become increasingly out of reach for many Australians in the past decade. The proposed changes to the mortgage broking industry, recommended this week by the Royal Commission, will place that dream even further out of reach for many people.
We ask both the government and opposition to thoroughly consider the implications of enacting the recommendations made regarding the mortgage broking industry, and ensure that the outcome is fair to the average Australian. We support keeping mortgage broking free to consumers, and we support the ‘paid-the-same’ commission model employed by most brokerages that has ensured impartial decision making for almost 30 years.
We completely reject the assertion by Commissioner Hayne and Matt Comyn, CBA CEO, that trailing commission is “money for nothing”.
Mortgage Brokers are available 24/7 to answer clients questions, undertake loan variations, provide support and education, review their loans and make sure they aren’t getting ripped off by the banks by negotiating better rates on their behalf, as well as many other services. This is what they receive trailing commission for, and we stress actually provides for better customer outcomes.
Without Mortgage Brokers being constantly being in contact with clients, banks use ‘rate creep’ to gouge more and more interest from clients due to new and bigger discounts becoming available to NEW clients, while existing clients effectively pay more.
We strongly believe that customers will end up paying more.
Home buyers will be penalised in one of two ways: either they will be unable to afford the proposed fee-for-service structure, resulting in a reduced ability to access the funding that is right for them; or, those that can afford the proposed fee-for-service structure will be forced to absorb significant costs that the banking sector were previously responsible for.
Removing the commission structure that is paid by banks to mortgage brokers is estimated to put billions of dollars back into the Big 4 Banks, while implementing a fee-for-service structure transfers the responsibility of those costs to aspiring property buyers already making the most expensive purchase of their life.
The Royal Commission uncovered misconduct and even criminal activity at some of the highest levels of Australian banking, and yet mortgage brokers and their customers are the key group likely to suffer significant penalties in the wake of the report. Smaller banks without a large branch network who currently rely on brokers to introduce customers will also suffer a significant loss of marketshare.
The Big 4 banks, meanwhile, have had some of their best days on the share market since the report was made publicly available.
Mortgage Brokers are mostly small business owners who potentially could lose their businesses and their staff could lose their jobs.
In almost three decades, the mortgage broking industry has brought competition to the Australian finance market, and today more than half of all home loans in Australia originate with a mortgage broker. If you're part of that statistic, or if you just value choice and competition in the finance sector, please pledge your support for this petition to ensure it is noticed by our Federal Government.
Update: Over 50,000 have signed this petition - that's potentially 50,000 votes for any party or Senator who supports us.