by Jenny Ruth
While the recent Goldman Sachs report on the impact of mortgage brokers on Australian banks estimated it costs banks about double to process a broker sourced loan than to process one where the customer goes directly to the bank, the situation may be even worse for banks here.National Bank chief economist John McDermott told this month’s Mortgage Brokers Association conference that while application to settlement ratios among Australian brokers are running at 75% in Australia, they’re only between 30% and 35% in New Zealand.
The number of broker originated applications which are declined in Australia is 15% but in New Zealand it’s double that at 30%.
The number of loans approved which are settled in Australia is 90% but in New Zealand it’s only between 50% and 55%.
And size of broking firm seems to be no guarantee of quality: draw down rates for the top 10 broker firms ranges from 80% for the best down to about 55%.
"There’s a bunch of issues to deal with," McDermott told the conference.
He suggest banks will increasingly segment the broking industry, isolating those with poor approval to settlement ratios.
And that the other banks will be watching closely how Bank of New Zealand, which recently decided not to deal with brokers at all, fares.
"We think they’ve got it wrong, but we will be watching," McDermott says.
| « Houses still selling quickly | New mag for property investors » |
Special Offers
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved