nMB Intell March 2010



	We are now well underway with our Australian Credit License model, which was announced at the conference and full details communicated to agreement holders during the month. Our approach to have all nMB brokers and loan writers register with ASIC from 1 April is proving to be a good strategy. Many will need more time to better understand the implications and different requirements when deciding to obtain an Australian Credit Licence in their own right or to become a Credit Representative under another person’s (nMB’s or their head broker’s) licence. As lenders are now starting to provide more advice around when they will require registered broker details, the period in which brokers need to register with ASIC is beginning to shorten. It will be important for everyone who needs to register to do so as soon as possible after 1 April. MacGillivrays continue to provide us with the required legal advice and direction and we have appointed QED Risk Services to work with us to review our existing internal procedures and build the necessary operating and compliance manuals for the post-licensing environment. Further within Intell Kon outlines some changes around the way brokers will need to conduct business after licensing. The first quarter of 2010 has certainly seen a fall in settlement activity across the broader mortgage industry, following the strong finish to 2009 off the back of the First Home Owners Boost. At nMB we are seeing healthy new broker and loan writer recruitment activity and submission levels starting to come back off a strong housing market. There is certainly a disconnect between lending numbers falling (owner occupier housing commitments fell 8% in January, the last available numbers) and house prices increasing. February numbers, which be available early April, will show a clearer picture as to the true strength of the lending market and the impact t of consecutive rate rises and tightening lending criteria. The launch of nMB Direct – our badged loan product funded by The Rock Building Society - earlier in the month has seen many nMB loan writers seek accreditation and around $5m in submissions in the first few weeks. We are really excited about this initiative and the positive response we have received from our brokers. Jodie talks more about nMB Direct further into this months Intell. Until next time, stay well! Gerald Foley - Managing Director
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	How to source leads from accountants Successful mortgage brokers see “referrals” as a key ingredient in the lead generating-mix and work diligently towards building a solid referral program. When seeking referral partners, try to focus on one industry group at a time. An industry focus will help provide a clear understanding of the business needs and the potential motives driving referrals. As an example, let’s look at how to source leads from accounting firms. The best way to understand the accounting fraternity is to go directly to the source. Scheduling a meeting with your accountant as a fact-find [only] will help provide insight. Know your target Prior to approaching a new accounting firm, get a handle on the types of clients they work with. Knowing if they specialise in private or business clients will help in defining your value proposition. Small to medium accounting groups that major in PAYG clients are more likely to provide a consistent flow of referrals and may be more open to the concept. Why would an accountant refer clients to a mortgage broker? The fit is both logical and obvious – accountants provide financial and tax advice; and loans certainly form part of the mix…..but what else? Just like any other business, accountants are keen on adding value in a genuine effort to assist their clients whilst enhancing their client retention strategy. Mortgage broking can provide accounting groups with the means to satisfy their clients’ lending needs via a model that offers choice and convenience. Some accounting firms may also see mortgage broking referrals as a vehicle to increase the average revenue per client whereas other firms may elect to rebate any fees to their clients. Why would an accounting firm refer clients to you? The answer to this may be summed-up in one word…..“trust”. Accountants are extremely protective over their clients and would baulk at the idea of referring clients to you unless they completely trusted your level of competency, professionalism and integrity. So how do I prove I can be trusted? Leverage from your existing networks for an introduction to accounting groups. A third party endorsement (TPE) can provide evidence of your credibility and help secure a meeting and possibly a referral relationship. Where you would like to look further than your current list of contacts, explore creative ways to seek third party introductions. A great way to introduce yourself and your business model to accountants is via your own clients. If you can find an excuse to contact your clients’ accountants in the normal process of fulfilling their loan requirements…..do it. The specific cause of the contact must be centred on the current loan file whilst “farming” a new relationship with the view of future business. During an industry Conference in Melbourne, Tim Braheem of LoanToolBox, presented a concept of surveying your clients as a double-edged strategy. His concept serves to help brokers supply leads to other service providers such as accountants; & to provide brokers with an opportunity to “farm” new relationships. Here’s how the concept works….. After you have fulfilled a client’s loan, ask how they rate the service they receive from their accountant from 1 - 10. Where the response is low, offer to introduce your client to an accounting firm you know to be a high performer. This strategy is perfect. It helps your clients with their accounting needs. It provides the accounting firm with new business and increases your potential of receiving leads. Where the response is high, ask your client for the contact details and a TPE. This will expand your network of accountants and further increase your lead generating program. In closing: Your credibility with accountants will also be enhanced if you follow the Tom Peters’ concept of “under committing and over performing”. Results speak louder than words so keep your appointments, act on your promises, qualify any facts, provide regular feedback and deliver your services in a timely fashion. This is extremely important – not only when building relationships with accountants but with all relationships….. Sal Cinque - Director, Sales and Marketing
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	Have you considered nMB Direct? The introduction of nMB Direct has been met with a very enthusiastic response with a number of applications lodged since the launch last month. The three nMB Direct products available have each been developed to help meet a need within the market, whilst providing a competitive rate and an excellent service proposition via The Rock’s centralised and accessible loan processing unit. As a reminder, here are some great reasons to consider nMB Direct: nMB Direct SVR Loan: Available to 95% LVR No genuine savings Up to two 100% offset accounts* linked to the home loan nMB Direct Packaged Loan: Available to 90% LVR Up to 0.85% discount off the SVR Loan rate Fixed Rate Discount of 0.10% - Further discounts apply during Fixed Rate Promotion of up to 0.40%# No ATM Fees (when you withdraw from Westpac, St George/Bank SA and The Rock ATM’s) Up to two offset accounts and six splits available at no extra charge nMB Direct Fixed Rate Loan: Available to 95% LVR Unlimited additional repayments** Redraw available (provided the account holds one payment in advance) Up to two 100% offset accounts* linked to the home loan For further information on the suite of products please refer to the nMB Direct reference page in MBS or please do not hesitate to contact me. $12 monthly fee applies to each offset account. #Applies to the 3 Year Fixed Rate of 6.99% for a limited time. With the exception of full repayment within the first 4 years Jodie Hainey - Lending Services Manager*
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	Licensing, a practical approach The question of Licensee or Credit Representative is one that regularly surfaces. The decision is largely determined on personal preference and on the business model you operate under. Obtaining an ACL is beneficial in so far as you set the terms for which Credit Representatives operate under your business, and have ultimate responsibility for the licence going forward. This ultimate responsibility however does come with the added obligation and cost of developing and implementing your own compliance regime, and dealing directly with ASIC as the administrative body. In a recent communication, Gerald Foley outlined both options and the framework for which nMB will operate going forward. This along with our continual dialogue will assist you in making the right decision for your business. Regardless of which path is taken, there are a number of things you can do today to ensure you are in the best possible position to make a smooth transition into the licensed world. The interview process obviously forms a critical part of the process. It is therefore important that you have a structured process when dealing with clients during the interview which will not only help provide a better service, but will ensure nothing is missed and also pass scrutiny: Ensure all components of your FBA’s/Client Service Charters are completed; Utilise the MBS fact find sheet, (Loan Product Selector); Provide summary sheet from qualifier showing serviceability ; Utilise comparison rate schedules; Ensure the question of insurance forms part of your interview and records process. From our sales meeting discussions, broker reviews and FBA audits, we are confident that these already form part of your daily business activity, and view this component of licensing as a means of formalising this process. It is however important that these elements remain top of mind. The “unsuitable” product test, for which legislation commences on 1st July 2010, appears a reasonable hurdle to get across however as we begin to think about how it applies it to our clients, we see some of its complexity. Example 1 A client taking on a 5 year fixed rate loan who works for an employer that requires them to move every 2-3 years. Let’s say they’re employed in the armed services for example. The client has requested a fixed rate loan as they are looking for rate stability, but may not have considered the possible consequences of breaking a fixed rate loan contract when the time comes to move. Example 2 A couple in their fifties take on a variable rate loan over a 30 year term. The question of ongoing income to service the loan would need to be addressed. Do they propose to clear/service the debt via superannuation funds? Maybe they will sell the property upon retirement to move to a seaside apartment. Neither of these examples will necessarily preclude the borrowers from obtaining finance, but there is a chance they could fall under the “unsuitable” loan category unless, questions are asked and there are logical explanations for the choices. The important thing is that these situations are firstly identified, then adequately explained and at the end, recorded. Incorporating the MBS calculators in your loan selection presentation will assist your clients in making an informed decision. The use of extensive diary notes will ensure you fully understand the client’s current and future needs and place you in a better position to assist with suitable recommendations. ACL Key dates for 2010: 1st April – 18th June 2010 Registration Period nMB recommends all brokers register to ensure flexibility post 1 July 2010 1 July - 31st December 2010 - License application Those wanting to apply for a licence must lodge application during this period. 1st July 2010 - Responsible Lending Provisions “Unsuitability” test commences. Kon Avramidis - Director, Operations
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	Anthony Boulos - nMB Business Development Manager, NSW/ACT 1. My all time favourite food is: Anything seafood 2. The last book I read was: The autobiography of Malcolm X 3. Lately I’ve been listening to a lot of: I went to see AC/DC recently and have been listening to a lot of their music since. 4. My favourite saying is: I can resist everything but temptation…….. 5. My Ideal Sunday involves: Sleep in. Read the paper. Go to the beach. Wishing it was still Saturday. 6. My biggest inspiration is: My father. His work ethic astonishes me. 7. If I didn’t live in Australia I would live in: Anywhere that involved lying under a palm tree surrounded by sparkling blue water and soft white sand.		8. The most extravagant gift I have bought myself was: Sports Car. 9. If I could have dinner with anyone (dead or alive) I would choose: 1. Giselle Bundchen 2. Keith Richards 3. Marilyn Monroe 4. Martin Luther King 10. Three things I would love to do in my lifetime are: 1. Live 2. Love 3. Learn

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	nMB PD Days nMB's first round of PD events are fast approaching. Please make note of your relevant PD Day below: Brisbane - Thursday April 29 Shepparton- Thursday April 29 Sydney - Tuesday May 4 Melbourne - Thursday May 6 Gippsland - Friday May 7 Canberra - Tuesday May 11 Perth - Thursday May 13 Look out for your PD Day invitation from your state BDM in the coming weeks.