Mortgage Brokers – A dying breed!

its a shame that the banks/finance providers are welcoming brokers in through one door and perhaps kicking you out the other, in other words making the client/broker relationship very difficult indeed. i would have thought that the brokers had a fair amount of leverage with the banks etc.?

Dealing with banks, whether as a broker (as yourself) or as an individual (such as myself), is often stress-filled. The problem? We need banks, but the systems they have in place are often inconvenient and disrespectful to customers. I wouldn’t want to be a mortgage broker for all the world.

My own tale of horror? Developed a good working relationship with a mobile lender who gave loan pre-approval. I found a property for significantly less $ than the pre-approval amount, signed contract thinking all was well. Recontacted mobile lender to find that he was away on sick leave, not expected back for many months. My case was transfered to an office a couple suburbs over from me (not my nearest) and ignored for a couple weeks, despite several phone calls.

Then my case was transfered to a different office, in a suburb far away from me – in fact a suburb I had never been to, had no interest in going to, and have never been since. (When initially we signed with a mobile lender because it was difficult to get to an office during open hours!)

We asked the case officer if he needed any more paperwork from us to officially approve the loan (that we already had pre-approval for). He assured us he had all the paperwork. When we didn’t hear back, we recontacted him – wanting to make sure everything was okay. He said he couldn’t approve the loan. Why not? He decided he would need a bigger deposit – even though the property was $35,000 cheaper than what we had pre-approval for, and the house had been valued at more than we were paying! This was only a month after gaining pre-approval and our financial situation had not changed.

We were sure there was something missing in his paperwork. How could two people from the same bank come up with such vastly different figures? After many many phone calls and headaches we finally worked out which peice of paperwork he didn’t have (and had previously said he didn’t need) and we gained approval, but had to put in a bit more $ upfront as extra security.

Not very happy with the outcome, but stressed out of our minds with the settlement date close approaching, we agreed. He sent us through the final paperwork for us to sign – and he had made several mistakes on details that we had reiterated multiple times, including the loan package (with offset account and reduced interest).

Finally we sorted it all out – but after huge stress and a waste of time. Unfortunately, loan approval is not where the bank relationship ends.

The bank then gave us huge headaches with afterloan service – mailing out one set of bank cards to my partner at our home address, but holding my bank cards at the bank office far far away from where we live. Many many phone calls to find out what’s going on (because they hadn’t turned up in the mail and we didn’t know where they were)- first couple of people didn’t know anything and said they’d get back to me or someone would get back to me, move higher up the chain to someone who is investigating the matter, finally talk to head honcho of customer services who advises me that that particular branch (who we never chose to do business with) doesn’t mail out bank cards as a policy (even though they had mailed out my partners?) and I would have to collect it in person. I questioned the policy, it was particular to that branch who wanted to save admin costs. I asked if I could send a SSAE, or a courier. No, they wouldn’t agree to that. Finally they agreed to transfer it to my nearest branch, but I still had to pick it up in person (requiring me to take time off work to get there in work hours).

There’s a reason why people hate banks. Everyone has had a bad experience or two, and when you’re dealing with large sums of money then it is incredibly stressful.

Luci,

That sounds very typical, and therefore stressful to you as a customer. Your underlying assumption that you are the customer and therefore should be treated with respect and prompt service is fundamentally flawed.

The Banks are primarily looking after their own business as best they can – ultimately for their shareholders. If you are not a shareholder of the Bank – tough, if you are, the harshness comes full circle, but the sum of money usually doesn’t compensate.

With banks, I’ve found their is no such thing as a Win / Win. Their objectives are to ;

1. Reduce their risk to ALARP
2. Increase their revenue to the maximum possible.

When you take a mortgage out with them, these two objectives are diametrically opposed to what you should be aiming for, i.e. they expose you to the maximum risk possible and increase your costs of funds to the maximum possible.

Getting back to Rob’s topic – I haven’t used a broker for over 10 years now, and haven’t been into a branch for the past 6.

My Banker is very prompt and attentive, fantastic on the small details on the loans and is able to swing me better rates than what any broker can do.

More importantly, we’ve started to build a good relationship with him, and he’s not aspiring to go anywhere, he’s happy in his current possy – which was a huge concern for us. Previous to this one, we’d had 7 different people assigned to handle our files over the past 4 years…it drove us nuts.

As everyone knows, the most stressful thing with brokers and banks is getting the various people you talk to up to speed with your particular details. Rather than a 2 minute convo, you end up going thru the painful “What’s your name, address and phone no.”

Cheers,

Dazzling

“No point having a cake if you can’t eat it.”

Robert

I have already asked Dazzling that in a former post.

The lender that time was CBA who did a commercial deal at 1 below base or 5.7% fixed for 5 years.

I asked perhaps for the benefit of all other readers that we scan the letter of offer with the privacy details removed and we could all see for ourselves.

Unfortunately we are still waiting. Sounds familar. You would think if the lender was doing such great deals they would want to advertise the fact.

Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap CD which gives you a full Installment Contract.

Hiya Richard and Rob,

Richard – you were correct on the Bank but woefully inaccurate on the other details. As posted previously…the one to which you refer…I have absolutely no intention in posting real banking documents onto a public website. Never have – never will.

If that sounds familiar to you and/or is a source of frustration – tough – I have no need or desire to prove anything to you or any other poster. If you don’t believe me…that’s great !!

I’m not trying to sell / promote / prove or distribute anything to you or anyone else. I have no wish to direct a whole bunch of investors towards my Banker – hell – I’d get reduced service if that was the case.

I don’t know why Rob believes people don’t shop around for the best deal just because they stay with the one institution ?? Despite it being none of anyone’s business, we shopped around extensively with both the direct approach and many brokers…I know it blows your bubble but none were able to compete…simple as that !!

Has it ever occurred that the Bank you are currently with, may provide the best “product” – love that word…it’s called money fellas…Banks don’t make products…

Have fun…a dying breed indeed.

Cheers,

Dazzling

“No point having a cake if you can’t eat it.”