Government rethinks mortgage broker plan

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(Australian Associated Press)

 

GOVERNMENT ACTION ON MORTGAGE BROKERS

* There are 16,000 mortgage brokers across Australia, employing more than 27,000 people.

* 60 per cent of all Australian residential mortgages are settled by brokers.

WHAT’S HAPPENING:

* No ban on trail commissions on new loans

* Instead, a review will be conducted in three years time by the Council of Financial Regulators and the Australian Competition and Consumer Commission

* Review to consider future of upfront commissions

* Value of upfront commissions will be linked to the amount drawn-down by borrowers

* “Best interests duty” will legally obligate mortgage brokers to act in the best interests of consumers

* Ban on campaign and volume-based commissions; as well as a two-year limit on claw-back, starting from July 1, 2020.

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