Mortgage brokers not involved in raft of poor advice: MFAA
The representative body for mortgage and finance brokers has claimed its members were unlikely to be involved in many of the cases of mortgage fraud and failures submitted to the Senate review of the Australian Securities and Investments Commission (ASIC).
In its own submission to the Senate review, the Mortgage and Finance Association of Australia (MFAA) stated that had its members been involved in any of these disputes they would have been raised as disciplinary matters before its own member tribunal.
Of the 415 submissions lodged with the Senate review, 143 submissions detail problems with mortgages, particularly ‘low-doc' and ‘no-doc' loans provided by 20 different mortgage lenders — including the big four banks.
In comparison only 63 submissions relating to poor financial planning advice and investments have been lodged with the review, of which five related to Commonwealth Financial Planning while another 30 related to Storm and Trio/Astarra.
In its submission the MFAA stated that it believed most of the submissions related to broker activities between 2003 and 2008, before the 2010 introduction of the National Consumer Credit Protections Act, and it was difficult to identify if the brokers involved were MFAA members.
"However if they were, the complained-of conduct ... clearly could have been dealt with by the MFAA Tribunal and, if proven, prima facie would most likely have resulted in an expulsion, the details of which would have been made public."
The submission also stated that only one complaint had been received by the MFAA since 2012 and "if there had been widespread misconduct by brokers as asserted by the submissions to this Inquiry, it would be reasonable to expect that many more than one complaint of this nature would have been made by consumers under the MFAA Disciplinary Rules".
The MFAA stated the claims in the submissions would be a breach of both the NCCP Act and MFAA disciplinary rules. It said this behaviour was unlikely to occur under the new regime and "that, as far as we are aware, none of the complaints to this Inquiry relate to alleged conduct post-2010 (and) this would demonstrate the effectiveness of the Act".
The MFAA stated its current membership numbered 10,144, of which 9896 are individual mortgage brokers or finance brokers or broking businesses. It estimates that MFAA members make up about 75 per cent of mortgage/finance brokers in Australia.
AUTHOR
Jason Spits
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