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There has been plenty happening in the past month to report on!
Pleasingly, we have started to see some improvement in lender service levels, which is welcome, but still has long way to go. nMB continues to engage in dialogue with our lenders around servicing issues and how they can be improved.
There has been a lot of recent debate over the concentration the 4 major banks have on new mortgage business – estimated to now control near 90% of flows. Whilst there are some early signs from the non-bank sector of a return to the market - largely through access to the Australian Office of Financial Management funding availability - greater competition is needed; and the government has highlighted its desire to further assist this process.
The connect between the official Cash Rate and the banks’ lending rates seems well and truly broken. The July RBA Board Meeting would be an interesting place to listen in, as the Board tries to determine a rate strategy that could be seen by the majors as another chance to bring some more margin back into their businesses. I expect another “hold” decision will be made, with the banks then left to review their rate policies without the cover of an official move.
The National Consumer Credit Protection Bill was introduced to the Commonwealth Parliament on 25th June, following some 70 submissions made in response to the Industry Consultation Draft released a few months earlier.
A number of the submissions made were from retail businesses such as Harvey Norman, Optus and Cash Converters. The selling of goods and services at this “pointy” retail end, very often on credit, was hardly mentioned in discussions during the period preceding the Draft Bill. The issues raised by the retail sector have caused the government to allow it a 12 month moratorium whilst it determines the best way to regulate retailers who also deal in credit.
Full details of the Draft Bill and its implications on nMB and our brokers will issue shortly. What hasn’t changed is the need for all lenders and credit intermediaries to register with ASIC by 31 December 2009.
So as another financial year passes by, it’s time to take stock of what we’ve all endured over the last 12 months, and start to set some targets for the year ahead. One in which I believe we will start to see some improvements, as Australia begins to bounce back from the current tough economic conditions.
Gerald Foley - Managing Director
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nMB Performance
Last month I covered nMB’s sales and portfolio performance. This month I would like to focus on the growth of nMB’s sales force. YTD recruitment numbers are strong, including 50 new writers starting with nMB. It is great to see the majority of new starts are existing finance professionals and successful brokers switching to nMB from other aggregators. We attribute the success of our organic growth to three major factors:
1. Increased exposure. In January 2009 we launched the “nMB Top5 campaign”. The campaign focuses on the 5 main reasons brokers are choosing nMB as their aggregator partner and highlights our unique proposition. The campaign is supported by: printed and online marketing materials; a direct mail strategy driven by our BDMs; magazine inserts via Mortgage Business and Australian Broker; online advertising with mortgagebusiness.com.au and brokernews.com.au; updated content on the nMB website; and sponsorships of industry events such as the WBP Property Outlook series. At a time where our competitors are cutting back on advertising, we are increasing exposure of the nMB business model and strengthening our brand equity.
2. Brokers are realising the benefits of a full service aggregator such as nMB. Quality metrics imposed by lenders and the pending licensing regime have forced brokers to reassess the value offered under their current arrangements and in some cases has motivated a change. nMB is positioned as a quality, full service aggregator and continues to appeal to a broad range of mortgage brokers.
3. Professional BDMs in each of our major markets. Margaret Chapman (Vic/Tas), Nick Crompton (NSW/ACT), and Bruce Mawson (Qld), have all played a significant role in developing our distribution network. Their in depth knowledge of the industry, nMB’s model and broker needs provides the competitive edge when dealing with brokers looking to join nMB and when assisting our current members.
nMB Sales Meetings
The June Sales Meetings featured two of our ’09 Event Sponsors – CBA and ALI. CBA covered a number of recent policy changes, new contact details and outlined their escalation process. ALI presented a synopsis of a recent focus group with nMB brokers and discussed a number of outcomes. We thank both the CBA and ALI for their continued support of nMB and our Events Program.
nMB’s content focused on the importance of additional revenue streams. From a sample of nMB brokers, we assembled a P&L statement that represented an average cost of all the major expense categories. We then used the sample’s average loan sales and applied a conservative cross-sale conversion ratio against ALI’s insurance products. The result was then discussed in terms of how the increased revenue could be used to cover an existing expense or how it could be used to fund a new fixed cost, as an expansionary measure. Some of the examples included using the increased revenue to cover the cost of an office or an additional staff member such as a PA.
Next month will feature Westpac and RAMS and we’ll highlight a number of enhancements to the marketing materials available on the MBS.
If you were unable to attend the sales meetings and wish to learn more, please contact your nMB BDM.
Sal Cinque - Director, Sales and Marketing
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First Home Buyers Grant
The Federal Government’s decision to extend the First Home Buyers Grant, for another three months in its current form and in a reduced amount until December 31, will ensure the property market remains buoyant, at least in the short term.
The mad rush to enter the market before 30th June appears to have been averted, which should bring about a more considered buying approach for this sector, rather than the frenzy we’ve all experienced the last few months. This should also reduce some of the pressure bokers have experienced in bridging the difference between client expectation and lender service, whilst continuing opportunities for brokers beyond 30th June.
The additional three months will also provide borrowers further opportunity to save towards their contribution. The challenge for us remains the AIP. In the current environment, many lenders are pushing these applications to the back of the line, in order to achieve reasonable turn around times on “live deals”. This quite often leads to borrower’s inability to bid at auction, or if willing to do so, without any real confidence.
Sarah Zecevic - Lending Services Manager
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Broker Forum: Help us share the knowledge.
The Broker Forum is an invaluable component of MBS, which is capable of saving brokers considerable time and effort, especially when looking to cut through the myriad of product and policy contained in the reference section. It is however, heavily reliant on broker feedback and contribution to remain up to date.
Essentially, the Broker Forum is a bulletin board for brokers to report on a particular niche or obscure feature that separates one lender from the other. The type of information that isn’t readily picked up in a policy manual.
There are eight categories to choose from ranging from borrower and security types to loan purpose and fixed rate lending.
Recently, we made it easier to contribute to the forum by providing an email hyperlink at the top of each category. A simple ‘click here’ will launch an email to nMB Lending Services where a broker can add information or comment on the forum. The process once the information is received, is to verify with the lender, and then publish on MBS.
I encourage everyone to have a look at the Broker Forum, but more importantly regularly contribute so that the whole network can benefit from our collective experience.
Kon Avramidis - Director, Operations
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Robyn Baker - Concept One Mortgages, ACT
1. My all time favourite food is:
A roast dinner that my Grandmother cooks.
2. The last book I read was:
Toddler Taming by Dr Christopher Green.When you have 3 kids under 3.5years you need all the help you can get!
3. Lately I’ve been listening to a lot of:
Wiggles and Dora the Explorer
4. My favourite saying is:
Shhhh…Mummy has to answer the phone.
5. My Ideal Sunday involves:
My husband getting up to the kids at 6am andme not rising till after 9am. One of those beautifulCanberra days with the sun shining and 18
degrees and just lazing around outside watching the kids play without a care in the world.
6. My biggest inspiration is:
Kon. How did you cope with triplets? Twins are enough.
7. If I didn’t live in Australia I would live in:
USA. For no other reason other than I loved it when I was there on holiday.
8. The most extravagant gift I have bought myself was:
A “celebrity” style makeover and shoppingwith a personal shopper. It was a lot of funand I came home with a lot of shopping!!
9. If I could have dinner with anyone (dead or alive) I would choose:
Either Richard Gere (coz he’s hot) or asurvivor from Auschwitz concentration campas I am amazed at what they endured and
to try to understand about the atrocities that they survived.
10. Three things I would love to do in my lifetime are:
• Win lotto
• travel the world first class for a very long time
• Go into space
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nMB July Sales Meetings
Please make note of the relevant nMB July Sales Meeting date in your diary:
Brisbane Tuesday 7th July
ACT Tuesday 7th July
Sydney Wednesday 8 Jul y
Melbourne Friday 10 July
Gippsland Thursday 16 July
Please RSVP your attendance to your state BDM.
