Mortgage brokers face shake-out
The huge growth in mortgage brokers‘ share of the home lending market has led to a dangerous bubble and a significant rationalisation is expected before the end of 2003, says Mark Bouris, executive chairman of Wizard. Mr Bouris said there will be a “considerable tussle” between brokers and banks as to who owns the customer.
Mr Bouris also described many mortgage brokers as “churn masters” staffed by “unregulated amateurs” with poor lending practices that would lead to increased costs for banks. Wizard also believes the shift to brokers for home loans, away from bank branches, has increased the banks' risks.