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Banks become regulators

While mortgage brokers debate the merits or otherwise of formal regulation of their industry, the major mortgage lending banks say they are increasingly acting as regulators by being choosey as to which brokers they deal with.

Thursday, August 9th 2001, 12:14PM

by Jenny Ruth

WestpacTrust has a formal written accreditation process and looks at everything from credit history to experience and ongoing education plans of brokers who want to deal with the bank.

"We think it’s important for customers and the industry as a whole to have good standards," says WestpacTrust spokesman Peter Thornbury.

His bank also wants to ensure any WestpacTrust products brokers sell are appropriate to the customer’s needs.

An indication of the growth of mortgage broking is that rather than dealing with brokers at local branch level, WestpacTrust now has 12 broker managers scattered around the country. It opened its first broker processing and call centre in Christchurch late last year. "It grew so quickly we had to open another in Hamilton," Thornbury says.

About 25% of mortgages written these days are through brokers.

National Bank also has "a very thorough accreditation process" for mortgage brokers, says spokeswoman Cynthia Brophy. ``We won’t just deal with anyone,’’ and the bank is particularly careful with "mortgage reduction agents."

Tom Roberts, manager of mobile banking and alliances at ASB Bank, says his bank also has a set criteria brokers have to pass before it will deal with them. "We don’t deal with all and sundry."

Nevertheless, ASB Bank regards the industry as an increasingly important distribution channel. "We strongly value our association with brokers," Roberts says.

His bank prefers the brokers it deals with to belong to the Mortgage Brokers Association (MBA), although it hasn’t made that mandatory. Roberts has sat on the MBA’s executive committee for the last four years.

He doesn’t favour formal regulation of the industry. "Legislation can open up a can of worms.’’ But the absence of formal regulation will tend to push brokers into joining the MBA, Roberts says.

While there’s talk of some brokers wasting banks’ time with mortgage applications that don’t fit the bank’s lending criteria, Roberts says this is much less of a problem these days.

"Mortgage brokers are no longer the last port of call. These days it’s become more of an accepted channel."

ANZ Bank welcomes all mortgage brokers but says because of the industry’s growth it is currently developing an online accreditation process. "This is being developed in consultation with the industry and the NZMBA to ensure accountability and professionalism for customers and brokers,’’ the bank says.

It has established regional sales managers to deal with brokers and has also developed a web site specially for the industry. The restricted access site includes training materials, product information and interest rates and ANZ Bank sees it as a major part of improving broker access to its services.

At the other end of the spectrum is Bank of New Zealand. Colin Mansbridge, head of mortgages at BNZ says it doesn’t have any major problems with mortgage brokers because his bank deals with very few.

Some people even think BNZ has a policy of not dealing with mortgage brokers.

But rather than it being a case of the bank vetting the brokers, he admits mortgage brokers have taken "a more jaundiced view towards the BNZ than the other banks."

It’s not that BNZ disapproves of the industry. "Our view is that it’s a legitimate industry. It does help with reducing complexity for clients. With the number of products and players out there, it does fulfil a need for consumers," Mansbridge says.

Nevertheless, "we’ve taken the view that we would like to understand and cater to our clients’ financial needs as much as we can ourselves," he says.

Although BNZ offers all its standard mortgage products for sale through brokers, it won’t allow them access to its special deals or customer loyalty programs.

Mansbridge says the amount of mortgage business it originates through brokers is "definitely less than 5%, probably closer to 1%."

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans 7.24 ▼5.69 6.39 6.65
AMP Home Loans $200k+ 7.14 ▼5.59 6.29 6.55
AMP Home Loans LVR <80% - - ▲5.99 ▼6.19
ANZ 6.74 6.15 ▼6.39 6.49
ANZ Special - ▼5.69 ▼5.75 6.09
ASB Bank 6.75 6.09 6.40 6.65
ASB Bank Special - 5.70 ▼5.75 6.19
BankDirect 6.75 6.09 6.99 6.65
BankDirect Special - 5.70 ▼5.75 6.19
BNZ - Classic - - 5.75 6.19
BNZ - GlobalPlus 6.74 5.89 6.39 6.59
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 5.89 6.39 6.59
BNZ - TotalMoney 6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 6.05 6.20 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 6.45 - - -
Lender Flt 1yr 2yr 3yr
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.65 5.85 5.99 6.19
HBS Special - - - 5.89
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 6.70 6.00 6.50 -
Housing NZ Corp 6.74 5.99 6.39 6.59
HSBC Premier 6.84 5.95 5.95 6.39
HSBC Premier LVR > 80% - 5.75 5.75 5.75
HSBC Special - - - -
ICBC 6.75 5.99 6.39 -
Kiwibank 6.65 5.79 6.39 6.65
Lender Flt 1yr 2yr 3yr
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.55 - - -
Kiwibank LVR > 80% - - 5.89 6.19
Liberty - - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.95 6.15 6.60 -
NZ Home Loans 6.85 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
Resimac 6.59 6.35 6.58 6.77
SBS Bank 6.65 5.85 5.99 6.19
SBS Bank Special - - - 5.89
Lender Flt 1yr 2yr 3yr
Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.85 6.09 6.40 6.65
Sovereign Special - 5.70 5.75 6.19
The Co-operative Bank 6.70 ▼5.70 ▼5.89 6.19
TSB Bank 6.74 5.95 6.19 6.30
TSB Special - - 5.79 -
Wairarapa Building Society 6.20 5.75 5.95 -
Westpac 6.59 6.09 6.39 6.65
Westpac - Capped rates - 6.74 6.99 -
Westpac - Offset 6.59 - - -
Westpac Special - - ▼5.75 6.19
Median 6.70 6.00 6.39 6.52

Last updated: 22 October 2014 7:07am

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