Mortgage Broker Issues

Clients of mortgage brokers often run into issues, which they may or may not complain about to professional bodies. The mortgage broker sector has improved markedly since 2010 after the NZ government brought in new regulations requiring mortgage brokers to be fully qualified financial advisors, but in spite of brokers being part of a recognised dispute resolution scheme, many issues still arise.

Tina Park, mortgage broker
Tina Park, mortgage broker

Prior to 2010 the main problem clients were having with mortgage brokers were that often they were just simply incompetent or unscrupulous, and for example they would supply incorrect information about their clients to the banks or lenders in order to win a mortgage for their clients. Also they would feed business to independently wealthy investors who would charge a much higher interest rate, when the client could have gone straight to a bank and got good market rates. A lot of their clients were in serious difficulties once the general financial crisis occurred 2008, and a lot of these difficulties could be placed at the feet of their mortgage broker.

Nowadays almost all the Cowboys brokers have been well and truly weeded out of the system, but the clients are still running into problems. One common example is the clients finding that the brokers they talk to just can’t help them, and don’t even seem to want to try. The problem for them is it they are talking to the wrong brokers, because if they have called one of the largest mortgage broking firms they will not have realised that the firm would have pre-screened then and eliminated them as a potential client simply because their situation looks somewhat different or potentially difficult. If the clients went to an independent broker such as the ones at then it’s far more likely they would receive service, because independent brokers need all the business they can get.

There also occasionally appears to be a degree of racial bias in some mortgage brokers, who refuse to take on some clients simply because of their accent or because of the broker’s assumption about their nationality. In these cases the client just have to keep on trying different mortgage brokers, and Google search is a great tool for those.

All brokers are supposed to deliver independent and professional advice, but many brokers have their favourite banks and high -net-worth investors who they feed a lot of business to, obviously in return for a favorable commission or access to a new line of leads. The problem here is that the broker would be unable to persuade their client that they are getting the very best deal if they were to tell the full truth to the client. This is dishonest and risky behaviour by the mortgage broker, as they could be found out if the client where to visit another broker and explain their situation. To find out more about Rotorua mortgage brokers click here.

No Comments