Mortgage brokers could lose 75% of income as royal commission reality sets in!

“I have kids”

Mortgage brokers could lose 75% of income as royal commission reality sets in

Independent mortgage brokers say they will be driven out of business by an impending overhaul of their industry sparked by banking royal commission recommendations.

The royal commission has advised major changes to revenue model for the industry recommending borrowers, rather than lenders such as banks, pay brokers to address concerns about perverse incentives.

Labor has said it will implement all of the royal commission’s recommendations, including those related to broking, while the coalition has agreed to ban trail commissions but not up-front fees.

The royal commission lost focus on its principal aim: to deal with the banks,” One broker said.

“I’m a one-man shop, I have kids, I have a mortgage.”

Fully story in the article below. All information taken from www.smartcompany.com.au and the story written by Matthew Elmas

“I have kids”: Mortgage brokers could lose 75% of income as royal commission reality sets in

The following article is taken from the ABC article link below.

https://www.abc.net.au/news/2019-02-10/heres-how-the-banking-royal-commission-affects-homebuyers/10788648

Analysts had warned that the banking royal commission could make it harder for would-be home buyers to get a loan.

That ended up coming to pass as banks began cracking down on home loans last year, but it raises the question: did the final report recommend any changes that will make buying a house even more difficult?

We’ve taken a look at what the recommendations mean for home buyers.

Is it going to be even harder to get a mortgage now?

Nope. One of the big issues flagged before the royal commission started and during the inquiry was how banks assess would-be homebuyers for a loan

 

But since last year, the major banks and other lenders have made changes to loan applications to better verify the income and expenses of applicants to ensure they can afford to repay their debts.

So, getting a loan had already become a lot tougher before the royal commission — a move that was recognised by Commissioner Kenneth Hayne in the report as a “view to improve compliance”

 

 

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