This quote sums up the finance broking predicament, lets hope something changes and soon
Recently I asked Matthew Bransgrove from Bransgroves Lawyers who is one of the leading experts in mortgage law about the future of mortgage broking. I did not expect the following response. I have included it in its entirety as I really could not say it any better myself.
“The drastic falls in property values which accompanied the credit crunch in the USA are unlikely to occur in NSW because the speculative bubble in our property market was substantially deflated in 2004. Since then we have experienced much lower volumes of loans being written as fewer borrowers have the equity available or the incentive for higher gearing. The lament of lenders and brokers in NSW after 2004 but before 2008 was “plenty of money but no decent deals”. This situation changed with the freezing of the credit markets in 2008. We have seen many securitised lenders exit the market due to being unable to sell their bonds. Likewise the managed investment funds were dealt a crippling blow by the Prime Minister announcing a blanket guaranteeing of bank deposits. This caused a flight of capital away from the funds and most of them had to put a freeze on redemptions, making further lending the last thing on their minds. This perfect storm has left the banks as the “last man standing”. Those brokers now lament “to few deals, too little money” as banks pick and choose only the choicest morsels. However this is the least of their challenges. Since deregulation and the origination market began, brokers were needed by; borrowers to find their way among a myriad of choice, by non-bank lenders to feed their origination machines, and by banks to compete with non-bank lenders. These forces are now no longer as strong as they were and the challenge for brokers will be to diversify and innovate in order to find profitable roles until the credit markets re-establish themselves.”
Food for thought really.