ANZ cuts ties with brokers

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ANZ Bank is cutting ties with brokers who write insufficient business for the bank or provide poor quality applications.

Friday, June 27th 2003, 12:38AM

by Jenny Ruth

"Where we’re coming from is that we’re focusing our resources where we’re getting good conversion rates," ANZ head of broker distribution Brian Robb says.

As well as volume, the bank’s policy is also driven by a desire to raise standards within the industry and to reduce "farming" in particular.

While rates of "farming" of loans, the practice of applying to several different banks for a single loan, have reduced since the issue was highlighted at last year’s NZ Mortgage Brokers Association conference, it is still a problem, Robb says.

"Education is an ongoing requirement. The broker has to have good knowledge of each banks’ lending criteria and processes so they know whether a loan will be suitable to place with a particular bank," he says.

There will always be marginal loans that require applications to be made with more than one bank, but in these cases the broker should always inform the banks involved of the situation, he says.

As far as volume goes, the sort of broker ANZ doesn’t want to deal with any more is someone who places a loan with it perhaps only every two or three months. Or the broker might put in 10 applications but only have one settle.

When ANZ severs a relationship the broker still has the option of joining one of the aggregators and continuing to access ANZ loans that way, says Robb, who thinks the day of the independent broker is definitely over.

"There’s less administration involved and the risk assessment is reduced because we’re dealing with a bigger company," he says.

But even after joining an aggregator, each broker has to achieve at least 85% in ANZ’s accreditation examination if they wish to continue accessing ANZ loans.

Robb says this requirement has applied to new relationships with brokers since April 1, but it hasn’t required all the brokers it already has relationships with to meet this requirement.

"We’re heavily committed to the broker network and over time we will lift industry standards."

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