NZMBA introduces disclosure documents
In its latest move to improve industry standards, the New Zealand Mortgage Brokers Association is introducing a new "Personal Disclosure Statement" which all its members must complete and provide a copy to all clients from February 1.
Monday, December 13th 2004, 6:03AM
by Jenny Ruth
The document covers everything from a broker’s qualifications, experience, the date they became a mortgage broker, how they get paid and details of their professional indemnity insurance.
It is "a key consumer document and ensures clients and potential clients are given clear information to enable them to make an informed choice about the broker they are dealing with," says NZMBA chief executive Megan Salt.
"It also sets out some of the protections a client gets when dealing with and NZMBA broker as opposed to a non-NZMBA brokers, namely (a) simple and cost-effective redress procedure and a code of ethics and standards," Salt says.
But while the document requires member brokers to disclose the nature of the commissions they receive from lenders, it doesn’t require them to disclose the actual amount.
Salt says she would have liked to require actual commissions be disclosed but that there is widespread opposition to this.
However, the document represents the minimum standard only and brokers are free to disclose more details if they wish, she says.
Many brokers already disclose this if the client asks.
"Many of the brokers say they us it (disclosure of actual commissions) as a marketing tool," she says.
For example, a broker might detail the commission it receives from different lenders to show the client that the loan they’re recommending might not command the highest commission.
Salt says the document clearly shows that NZMBA members are capable of self-regulation.
The document will standardise practice and "protect against mismatches in perception between the consumer and broker."
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