| Who is Who in the mortgage industry? |
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Westpac? Bluestone? Aussie? Wizard? The MFAA? Find out exactly who is who in the mortgage industry...... When the finance industry became deregulated in the late 1980's the mortgage industry became very competitive. This has made getting a home loan much easier, and has pushed for greater flexibility, competitive interest rates, fees and charges. As a result many players have entered the game - so much so that almost 37% of home loans are provided by the mortgage brokers or mortgage managers. In saying that, many are confused with who's who! The following information will help you identify all of the players in the home loan game. LENDERS The lenders are one of the two types - TRADITIONAL and NON-TRADITIONAL. You will be most familiar with traditional lenders. These are the banks, credit unions and building societies. Traditional lenders are authorised 'deposit taking institutions' (ADI's). They use their own funds to provide home loans throughout Australia. You can obtain a home loan directly from the lender however the majority of lenders also supply their loans through professional accredited mortgage brokers. Each lender has their own policies and lending criteria that must be met to recieve a home loan through them. Once your home loan is approved and has reached the stage of settlement, they will manage and administer the facility for its term. The non-traditional lenders are also known as wholesale or non-conforming lenders. Unlike traditional lenders, they obtain their funds through investors, financiers or trust funds. some non-traditonal lenders appoint a mortgage manager to package, distribute, manage and administer the home loans on their behalf. They may also be distributed through a mortgage broker. Non-traditional lenders also have their own policies and lending criteria, however they are generally more flexible than traditional lenders. Now you know the source of your home loan - next on the list are mortgage intermediaries or those who help you and the lender to come together. MORTGAGE BROKERS Mortgage Brokers are intermediaries between borrowers and both the traditional and non-traditional lenders. They each have a panel of lenders that they are accredited with or they are authorised to write home loans for. Your mortgage broker will manage and administer the loan process up to settlement on behalf of the borrower. Because they do not usually act solely on behalf of one lender, they can offer you a selection of home loans, and help you choose the best facility that suits your personal and professional needs. After your home loan has settled your mortgage broker should continue to ensure you have the right home loan as your circumstances and the lender's products and policies change over time. The majority of mortgage brokers do not charge you for their services as they are paid a commission by the respective lender that they introduced you to. In some states of Australia mortgage brokers are required to fully disclose all details of the home loan transaction including any monetary or non-monetary benefits they receive. This will no doubt be required in other states before long. MORTGAGE MANAGERS Mortgage managers are again intermediaries between traditional and non-traditional lender's and borrowers. They provide home loan products and will administer and manage the home loan from the point of application and throughout the life of the home loan. They will also access the home loan application and will arrange the funds in the process to settlement. Loan payments are made directly to the lender - not the mortgage manager. Mortgage managers are paid through loan application establishment fees from the borrower, and the management fees from the non-traditional lender. They can affect the fees and charges you will pay and can also influence the interest rate of your home loan.
AGGREGATORS AND FRANCHISE GROUPS The vast majority of mortgage brokers belong to an aggregator or franchise group. These groups provide business support to it mortgage brokers with administration, technology systems software, education, training, communication and marketing.
As a borrower you have two options in obtaining a home loan. You can shop around and apply for a home loan directly through a traditional lender, non-traditional lender or mortgage manager. Alternatively you can seek the services of a professional mortgage broker on this site to research suitable home loans and find a home loan which suits your individual needs. The number of lenders a mortgage broker is accredited with will vary. MORTGAGE INDUSTRY BODY The Mortgage & Finance Association of Australia (MFAA) The Credit Ombudsman Services Limited (COSL) is the ASIC compliant dispute resolution service. All of these industry bodies are there for consumer protection and to continue the professional development of their members. Who is the MFAA? (Formerly the MIAA) The Mortgage & Finance Association of Australia (MFAA) is the peak body for the Australian mortgage industry. Members of the MFAA include traditional lending institutions, mortgage managers, credit unions, mortgage brokers, wholesale funding institutions, real estate agents, valuers, solicitors and conveyancers. All MFAA members are required to belong to an independent dispute resolution scheme, such as the Credit Ombudsman Service Limited (COSL) or other industry related body. Loan writing members are also required to become MFAA Accredited Mortgage Consultants (AMC). An MFAA AMC is covered by professional indemnity insurance, has taken part in and passed probity checks, and has met at least minimum education and experience requirements set out by the MFAA. Our Mission and Objectives Mission To ensure the orderly and ethical working of the mortgage industry in Australia. Objectives • To be the recognised authority in Australia on all aspects of the mortgage industry. • To maintain quality standards within the industry. • To provide education for members and their staff. • To support the development & range of mortgage products available to the public. • To embrace best practice customer services. • To develop the mortgage industry in Australia. • To elevate the role of mortgage intermediaries to a profession.
Our Members The MFAA has over 10,000 members nationally. MFAA’s intermediary members (brokers, managers and non-bank lenders) together account for around 50% of mortgage lending in Australia. Members consist of mortgage brokers, mortgage managers, non bank lenders, banks, building societies, credit unions, legal firms, mortgage insurers, trustees, fund managers, valuers, real estate agents and software providers. The membership application process is stringent with requisites of experience, education, industry sponsorship, and probity checks. All members must join the independent dispute resolution service, the Credit Ombudsman Service Limited (COSL), or a recognised Australian Securities and Investment Commission (ASIC) approved equivalent. There are three membership categories – full member, accredited mortgage consultant (AMC) and associate membership. The AMC designation is a points based professional accreditation programme unique to the MFAA and is recognised and looked for by lenders. Our Governance The policy and direction of the MFAA is set by its national and state-based Council and Committees. The National Council (or Board) is the principal governing body made up of the President’s of each of the State Based Council and elected officers. A glossary of terms is provided on our site for you to consider when purchasing property or obtaining a home loan. The list is by no means exhaustive, and definitions and terms may be interpreted differently to those included below.
What is the Credit Ombudsman Service Limited (COSL)? The Credit Ombudsman Service Limited (COSL) is the new name of the Mortgage Industry Ombudsman Scheme (MIOS). COSL is the ASIC compliant dispute resolution service that all MFAA members must belong to and abide by, unless otherwise exempted due to belonging to another ASIC compliant dispute resolution service. MIOS (now COSL) was established by the Mortgage Industry Association of Australia in 2000 in conjunction with the MFAA Code of Practice. In 2003 it was placed 'at arms length' from MFAA, to become an Independent Dispute Resolution Service, and in February 2004 changed its name to the Credit Ombudsman Service Limited (COSL). COSL provides Consumers with an alternative to other legal proceedings to resolve disputes free of charge to those customers. It is a requirement of all MFAA members to be members of COSL, unless they are members of another ASIC approved Alternative Dispute Resolution Scheme, in which case they may be exempted from COSL membership. COSL is administered by a Board comprising 2 directors nominated by MFAA, 2 directors nominated by the Consumers Federation and an independent Chair. For more information on COSL, including COSL rules, COSL Membership and Membership Applications, complaint procedures, and contact details, visit the COSL website.
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