The federal government has signalled its support for measures announced by the mortgage industry in response to a recent ASIC review of broker remuneration.
The regulator’s review of mortgage broker remuneration, released earlier this month, identified a number of conflicts of interest within the sector and made several recommendations for how it could be improved.
“The government requested the ASIC review in November 2015 in response to the government-initiated root and branch Murray Financial System Inquiry,” said Minister for Revenue and Financial Services Kelly O’Dwyer.
The review received 35 submissions from interested parties during a three-month consultation period, and a number of representatives from the mortgage industry subsequently agreed to develop an industry response to the final report.
“I welcome the proactive steps taken by the mortgage industry forum to engage with the government and consumer stakeholders on the issue of mortgage broker remuneration,” said Ms O’Dwyer.
“The government recognises that mortgage brokers play an important role, with more than half of all home loans originated by brokers and 26 per cent of these loans written to non-major lenders, as compared to only 12 per cent of loans written outside the broker channel.”
Some of the proposals the ASIC report made to the industry included improving the standard commission model, shifting away from bonus commissions, increasing disclosure of brokerage ownership structures, and improving lender and mortgage aggregator oversight measures.
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