X Inc Finance

(Sunday Mail Brisbane)

In a bid to ease mortgage pain, homeowners are seeking better deals from banks and other lending institutions.

According to the latest Australian Bureau of Statistics figures about 30 per cent of new owner-occupied home loans nationwide are refinances.

In the past three months Queensland’s biggest bank, Suncorp, reported a 13 per cent increase in customers refinancing their mortgages, some of whom would have been mortgage-holders refinancing to consolidate loans.

chief executive of Brisbane-based mortgage broking group Loan Market and X Inc, Jennifer Nielsen, said refinancing inquiries accounted for 70 per cent of calls in April.

“A rise in refinancing inquiries of this magnitude suggests that the market has moved into a new phase, with many borrowers moving into survival mode,” Ms Nielsen said.

For more information on home finance or the home loan that is in your best interest, click on the link to talk to your Loan Market mortgage broker and we will return your enquiry within 2 business hours.  Or call us at any time on 13 LOAN or direct on +61 2 9018 8417.

With access to over 30 residential and commercial lending institutions – including banks, buildings societies, credit unions and other non-bank lenders, I find the right loan for ever client.

First Home Buyers: Although buying your first home may seem daunting,  I will take some of the stress out of the process. With your circumstances in mind, I will identify the right home loan package to suit your needs.  In addition to your home loan application I will guide you through the process of applying for the First Home Owner Grant.

Investors: Unlocking the equity in your home to purchase an investment property can be a very rewarding option however finding the right investment loan can be complicated.  I will be on hand to guide you through this process to ensure you get the finance to suit your needs.

Low or no document loans: As a self employee you may not always have the financial information requested by some lenders. By showing me your ability to make loan repayments, I will show you a range of lenders that offer low or no documentation loans.  

Refinancing: I can show you how to consolidate your debts into one loan with one repayment and even look at the option of borrowing more money to renovate or invest.

Catherine Yap & Associates
principal mortgage broker: Catherine Yap
postal address: PO Box 352, Sunnybank QLD 4109
office: +61 7 3343 9087 
mobile: 0403 766 868 
fax: +61 7 3036 6237 
email: catherine.yap@xinc.net.au
View profile: http://www.xinc.net.au/qld/catherineyap.html

(Mortgage Business)

From 1 June 2008 St George will change the way mortgage brokers earn their commissions.

Brokers still have the potential to earn a maximum of 0.70 per cent up front and 0.25 per cent trail with the new structure, as long as they meet certain criteria.

Brokers failing to meet the bank’s new requirements can expect a minimum commission level of 0.50 per cent up front and 0.15 per cent trail.

Full commissions will be paid to brokers based on conversions from application to settlement, meeting agreed loan book run-off rates, electronically lodged applications and cross selling products during the life of the loan.

The initial reaction to St George’s new commissions structure from the aggregation industry has been positive, in contrast to Westpac’s April announcement.

“We’ve been talking to St George for the last few weeks and we see the changes as a pretty good outcome for both parties,” said Jennifer Nielsen, CEO of X Inc and Loan Market. 

“The changes they’ve made and the consultation process were well considered [in order] to keep their partners on board,” she said.

But success of the new structure will depend on both parties working “very closely together”.

“The right intent needs to be established for these changes to be effective for both St George and the broker channel – and in discerning how they will measure outcomes,” she said.

Head of sales and distribution at The Brokerage, Michael Osborne, agreed with Nielsen’s assessment of St George’s approach to its commissions decision.

“It is encouraging to see that St George have approached the commission issue in a constructive manner, still providing brokers the opportunity to earn full commissions,” he said.

Acting group executive of retail business with St George, George Beatty, said the changes were being introduced after careful consultation with broker partners.

“We intend this to be a clear signal that we will continue to support the mortgage broking industry,” he said.
“We are keen to reward brokers for value, efficiency and loyalty and we want to build partnerships with those brokers who are serious about working with us.”

For more information on home finance or the home loan that is in your best interest, click on the link to talk to your Loan Market mortgage broker and we will return your enquiry within 2 business hours.  Or call us at any time on 13 LOAN or direct on +61 2 9018 8417.

First Home Buyers: I assist my clients through the loan process maze to take some of the stress away and make them feel as comfortable as possible. No question is ever a silly question as I like all my clients to totally understand everything we discuss.

Business Finance: I can help with all your business finance including residentially backed commercial mortgages, motor vehicle and equipment leasing.  With my no fuss, solutions attitude, I get your business needs satisfied.

Five Year Mortgage Plan: Working together on your five year plan is the most effective way of obtaining the most cost effective mortgage. Entry, exit and ongoing fees may be a key feature that the borrower needs to consider if the facility is short term so the interest rate might not be the deciding factor.

Finance Tip: Never let the cheapest interest rate decide your home loan, look at and compare ALL the home loan features.
 
Sharon Clarkson & Associates
Principal Mortgage Broker: Sharon Clarkson
Postal Address: PO Box 625, Neutral Bay NSW 2090
Office: +61 2 9018 6700 
Mobile: 0400 609 916
Fax: +61 2 8080 8360
Email: sharon.clarkson@xinc.net.au
View profile: http://www.xinc.net.au/nsw/sharonclarkson.html

Recent rises in official interest rates have sapped demand for new credit with refinancing now the primary concern for borrowers, according to Loan Market and X Inc Finance, Australia’s fastest growing mortgage broking group.

Jennifer Nielsen, Loan Market and X Inc Chief Executive, said the company’s internal records showed that refinancing inquiries accounted for 70 per cent of call volumes in April, up substantially from the long-term average around 50 per cent. The increase reinforced concerns that recent rises in official interest rates and higher petrol prices were hurting consumers.

“A rise in refinancing inquiries of this magnitude suggests that the market has moved into a new phase with many borrowers moving into survival mode,” Ms Nielsen said. “What these figures tell us in particular is that potential new borrowers are sitting on the sidelines while they wait out further rises in official interest rates.

“Meanwhile, people with mortgages and other loans are beginning to struggle to meet their existing obligations and are looking at their options, especially refinancing,” she said.

Ms Nielsen said it was difficult to determine how many inquiries would lead to borrowers refinancing their loans but the proportion was likely to increase if the Reserve Bank raised interest rates further.

Loan Market and X Inc’s online consumer survey in March found that around one third of mortgage holders were near breaking point and feared that another rise in official interest rates would force them to consider selling their residence.

Ms Nielsen advised borrowers suffering mortgage stress to:

• Carefully assess their financial position – look at re-budgeting to save $50 per month and consider consolidating all household debt into a single loan.

• Research the market – for the first time, interest rates offered by the major lenders are different.This difference can have a sizeable impact on repayments. Look at all options such as taking out an interest-only loan until circumstances improve.

• Think carefully before opting for a fixed-rate mortgage. Fixed-rates are attractive on the surface and are always an option, but borrowers should keep in mind that interest rates move in cycles and your situation may not suit fixing.

• Whatever happens, don’t panic or make a knee-jerk response. Talk to a mortgage broker for a complete view of the market.

People thinking of refinancing should look at all the options – weigh the merits of the potential saving on a lower interest rate versus the cost of exiting current loans early. As always, a borrower’s best protection is their relationship with their mortgage broker.

More Information

For more information on home finance or the home loan that is in your best interest, click on the link to talk to your Loan Market mortgage broker and we will return your enquiry within 2 business hours.  Or call us at any time on 13 LOAN or direct on +61 2 9018 8417.

(Mortgage Business)

According to the result of a recent Mortgage Business straw poll, Wide-scale reductions to broker commissions could be on the cards, but aggregator groups remain defiant.

Of the 74 per cent of respondents that believe commissions will fall and only 26 per cent of those surveyed do not foresee any changes. Aggregator groups and brokerages have been quick to dismiss the prospect of reduced commissions however, arguing that lenders will recoup compressed margins through other channels.

Managing Director of Bernie Lewis Home Loans,  Mark Lewis just doesn’t believe it will happen.  “We might see lenders fiddling with clawbacks and commission structures, but too many rely on brokers too much to cut them out of the picture,” he said.

Chief Executive of X Inc and Loan Market, Jennifer Nielsen, said brokers were too highly valued by lenders to have their commissions cut back. “To say that lenders will reduce broker commissions significantly undervalues the relationship between lenders and brokers,” Ms Nielsen said.

“Clearly lenders need to maintain margins but they will do this in other ways – and we are already starting to see this evolve,” she said, referring to the transfer of certain processes to brokers as an example of how lenders are reducing overheads.

More Information
For more information on home finance or the home loan that is in your best interest, click on the link to talk to your local mortgage broker and we will return your enquiry within 2 business hours.  Or call us at any time on 13 LOAN or direct on +61 2 9018 8417.

(Weekend Gold Coast Bulletin)

Michael Baldwin has taken his property management operation - one of the largest in Queensland - into the realms of a stand-alone specialist management business based at 35-39 Scarborough Street in Southport.

Servicing the whole Gold Coast, the re-branded Ray White Baldwin Property Management is the first of its kind in the state.

Mr Baldwin has a total of 30 years in the property industry, the past 11 on the Gold Coast including ownership of five Ray White businesses. Now he has sold his Southport residential and commercial sales offices to Surfers Paradise Group.

The Loan Market franchise in Southport, operated by Mr Baldwin, specialises in all aspects of finance.

The two sales offices and the insurance service complement the business, providing a one-stop shop for customers.

“For too long property management has been the poor cousin to sales offices, and I am changing that,” he said.

More Information
For more information on home finance or the home loan that is in your best interest, click on the link to talk to your local mortgage broker and we will return your enquiry within 2 business hours.  Or call us at any time on 13 LOAN or direct on +61 2 9018 8417.

(Lending Central)

Moves by some banks to reduce commissions to mortgage brokers will not check the growth of the increasingly important service the industry is providing to mortgage-paying Australians, according to Loan Market and X Inc Finance.

Jennifer Nielsen, Loan Market and X Inc Chief Executive, said her group was discussing the issue of commissions with all lenders, reinforcing to them the value of forging long-term relationships with mutual customers or borrowers.

“Lenders need to look beyond merely the commissions that they pay mortgage brokers for service and focus on the true value that a mortgage broker provides,” she said. “Research has consistently demonstrated that the people who use mortgage brokers are typically time poor, higher-value customers who invest more over the medium to long term.

“Our initial talks with lenders have been encouraging with many expressing a keen interest in improving the quality of their relationships with customers and the business opportunities available for both the lender and their mortgage brokers,” Ms Nielsen said.

The average Loan Market and X Inc Finance customer holds a mortgage around $330,000, compared to approximately $200,000 for many bank branches.

“Banks seem to be in one of two camps on this issue,” Ms Nielsen said. “There are those who value both their customers and good mortgage brokers while on the other hand there are banks which don’t really understand too much about a broker beyond their commission cost.”

Ms Nielsen said that while there was no question that some mortgage brokers would leave the industry and smaller groups would join bigger groups, those remaining would continue to grow and win market share.

“It is an established trend for customers to go to mortgage brokers and banks to increasingly outsource their home loan business to mortgage brokers,” she said. “And obviously we believe it is far more efficient and cost-effective for a bank to have a mortgage broker to manage the customer, while at the same time it is also less confusing for the customer.

“With the myriad of loans, options and lenders in the market, time-poor customers are increasingly turning to mortgage brokers as a source of credible independent advice,” Ms Nielsen said.

More Information

For more information on home finance or the home loan that is in your best interest, click on the link to talk to your Loan Market mortgage broker and we will return your enquiry within 2 business hours.  Or call us at any time on 13 LOAN or direct on +61 2 9018 8417.

(Mortgage Business)

The review of mortgage entry and exit fees by ASIC has reveled there is a stark differences between those charged by bank and non-bank lenders. According to the report, average non-ADI fees significantly exceed banks and mutuals.
In particular, non-ADI early termination fees came in at almost $1,000 more than the fees charged by the big banks. The lenders highlighted with the highest fees were AIMS, RAMS and Ratebusters.

Brokers agree that while fees are an important issue it should not be considered in isolation.

Jennifer Nielsen, chief executive of Loan Market, X Inc Finance and realestate.com.au Home Loans told Mortgage Business. “Productivity, accessibility, innovation and relevance to the market are all more important,” 

Ms Nielsen defended the non-bank sector, stressing that “they [non-banks] keep the market competitive and overall ensure cheaper mortgages for all Australians”.

She added that despite the best attempts by some sectors of the press to sledge the non-bank sector, the competition and reduced cost of borrowing they have bought to the market cannot be ignored.

Managing director of brokerage The Mortgage Detective, Alison Whittle, agreed with Ms Nielsen’s observation: “It’s important to look at the whole package, not just fees” she said.

For more information on Loan Market go to www.loanmarket.com.au or information on X Inc go to www.xinc.net.au

(Adelaide Advertiser, Sunday Telegraph, Courier Mail, Daily Telegraph)

According to an online poll, conducted in March by Loan Market and X Inc Finance, found 32.5 per cent of respondents said another rate rise would require them to refinance their mortgage, while 33.3 per cent indicated they were near breaking point already and may have to consider selling.

In total, 82.5 per cent of respondents felt that another rate rise would require them to make cost-cutting decisions to make ends meet.   chief executive of, Loan Market and X Inc, Jennifer Nielsen, said: “The results highlight the two-tier nature of the economy, where  employment is at record highs yet housing affordability is at record lows. Severe financial strain is becoming increasingly common and families across the country are really on a knife-edge as they wait for the next move in interest rates.”

Of the survey respondents, only 17.5 per cent thought another increase in interest rates would not cause a substantial problem. Ms Nielsen said Loan Market and X Inc believes that when the RBA board meets again in May there is an equal chance of the Reserve Bank raising the cash rate or leaving it unchanged at 7.25 per cent.

For more information on Loan Market go to www.loanmarket.com.au or information on X Inc go to www.xinc.net.au

“It’s so important to know what your customers want and to deliver it.  I say what I will do and I stand by it.  The customer always comes first!”

First Home Owners: Buying your home is all about knowing where to place the loan to get the approval.  It’s not just the big loans that I get a ‘kick’ out of; helping people and making the impossible possible is why I started in lending.

Loans for Farmers: Gaining finance for farms and other income producing projects can be tricky.  Whether you are after a rural loan, lease or equipment finance, I will find the right finance solution for your situation.

Home Loans for Self Employed: While it is getting easier for self employed people to obtain a home loan you still need a mortgage broker who will take the time to guide you through the process.  With access to over 40 lenders, I take the time to get to know my customers situation to find them the right home loan.

Rodney Sherman & Associates
Principal Mortgage Broker: Rodney Sherman
Office Address: PO Box 1234 Black Hill, Victoria 3350
Office: +61 3 5332 6586
Mobile: 0411 228 664
Fax: +61 3 5332 6586
Email: rodney.sherman@xinc.net.au
View profile: www.xinc.net.au/vic/rodneysherman.html

(Your Mortgage)

Obtaining a low or no documentation loan has always been an easy option for self-employed or non-conforming borrowers. But with the fall-out of the US sub-prime crisis, these products have come under heavy scrutiny. Are low docs still a good deal?

Who qualifies?
If you’re self-employed, working on a contractual basis or derive a sizeable chunk of your income from commissions or tips, low-doc loans may be for you.

To be eligible for low-doc loans, lenders generally stipulate that you must have been in business for at least the past two years. You can either opt to take out a low-doc product with a specialist nonconforming lender, or go with a low-doc variant of a mainstream lending product from a major bank or non-bank.

It’s worth remembering that to take out any one of these loans, you’ll be subject to credit assessments proving your income and savings histories. Even a no-doc mortgage will require at least a credit report and a property appraisal.

Low-doc, high rates?
While the ability to provide alternative proof of income to tax returns and pay slips and not needing less documentation maybe a relief for some but the lack of documentation also induces a greater perceived risk to the lender, reflected in higher interest rates
and maximum loan to value ratio (LVR) of between 65-80%. Lenders who offer low-doc loans of up to 90 to 95% demand even higher rates.

An LVR of 90% would attract a rate of at least 12%, while an LVR of less than 80% would be in the range of 9-9.5%. Besides rates, loan application and establishment fees on low-doc loans are generally on par with full documentation loans, especially if you’re obtaining a product from a major bank or non-bank.

One word of warning: scrutinise the fine print carefully for early exit fees, as these can be higher than those on regular lending products to compensate the lender for the added level of risk. They can be 50-100% higher than those for full-doc loans.

Risks and strings attached
While some may use this as a shortcut route into the home loan market, fudging figures regarding your income to obtain loan approval will inevitably lead to disaster; as interest rates rise, and the high fees kick in, the tendency to default on repayments will become imminent, with repossession inescapable.

Ultimately, irrespective of whether you are offered a loan, it’s up to you to examine your financial circumstances, and decide whether you can afford the repayments in accordance to your lifestyle and budgetary requirements. Bear in mind that the trade off of a low-dot loan means higher interest rates which then translates to higher minimum monthly repayments. While they may be feasible for your current scenario, sudden lifestyle or financial changes down the track may have a detrimental impact.

The sub-prime effect
While the proliferation of low-dot loans has worked to fulfill the market’s niche, they haven’t escaped the public furor pertaining to comparisons between the local situation and the recent overseas subprime mortgage meltdown.

Given borrowers can obtain a subprime loan with impaired credit histories, been defaulted or declared bankrupt, Australia’s closest equivalent to a subprime loan includes low-dot and no-dot loans, made by non-conforming lenders; a sector which now boasts more than 400 loan products.

Pressure to stay clean
In a bid to improve the governing of the industry, under the government’s draft National Financial Brokering Bill, mortgage brokers will need to make sufficient enquiries about a borrower’s financial position to ensure they can repay the recommended loan. However, some brokers are concerned the low-doc and no-doc loan sector will be threatened under these regulations.

According to Jennifer Nielsen, finance chief executive at X Inc Finance and Loan Market, the proposed regulations will potentially expose brokers to severe penalties; in particular, the loss of their licence if a borrower defaults on their loan.

“Finance brokers can assist borrowers in understanding and managing these loans, but cannot be held accountable for a decision that ultimately is the responsibility of the borrower,” says Nielsen. “Low-doc or no-doc loans are legitimate and responsible forms of finance. A broker can help make a borrower aware of the risks involved and discuss whether this type of finance is appropriate for him or her, but ultimately the decision rests with the consumer.”

Borrowers should be conscious that despite being an alternative to securing finance, low-doc loans more commonly serve a niche market and shouldn’t be regarded as a viable solution for everyone’s circumstances. It should, rather, be a potential second or third option in only some cases. Do your homework, understand all costs involved don’t be pressured into making rash decisions, and don’t ever overstretch your budget.

For more information on Loan Market go to www.loanmarket.com.au or information on X Inc go to www.xinc.net.au

(Sunday Telegraph)

When 23-year-old home loan queen Jennifer Nielsen went to the bank for her first mortgage, she co-applied for the money with a single female friend who, like herself, wanted to secure an asset before a husband.

The mortgage was accepted and the block of land she and her friend bought together was Nielsen’s first step towards making $1 million through shrewd buying and selling of property in the lucrative Brisbane and Sydney markets over the ensuing years.

“I love to buy and sell real estate and I’ve done well out of it, especially in Queensland. But in the song The Gambler, Kenny Rogers had it right - you don’t count your money until it’s on the table.”

Having personally experienced the satisfaction - and financial benefits - of putting her money into bricks and mortar, the CEO of X Inc Mortgage Brokers is helping others to do the same in a complex lending environment now overshadowed by nervousness over the global credit crunch and stock-market anxiety.

Despite this uncertainty, X Inc - which effectively doubled its market presence by merging with Ray White Mortgages, Loan Market, last year - is employing up to 30 new brokers a month and with X Inc partners John Kolenda and Dean Rushton, Nielsen is aiming to be the biggest mortgage broker in Australia by 2010.

“We want to have a mortgage broker attached to every real estate office in the country,” Nielsen says ambitiously.

“It’s tempting to believe that success is due to individual brilliance or a magic formula. However in reality, it comes down to hard work and for us it was identifying a gap in the market. We wanted the white-collar market - the AB demographic. We made a difference. Now, it’s far more acceptable to go to a broker for a loan.”

And in times such as the current financial uncertainty, there’s even more need for such a service.

“People need to talk to someone like a broker to understand the finance options and what is likely to happen, because it’s confusing.  They are turning to mortgage brokers for objective advice.”

She sounds like she’s been in finance all her life. Yet prior to X Inc, Nielsen had two former professional lives which formed her business and boss skills today: the first was as a cook and deckhand on a tiger-prawn trawler in the waters between Cairns and Groote Eylandt, the second as a regional sales manager for Yellow Pages.

Her current career in the finance industry began when, as a consultant with Hallis Recruitment, she worked closely with then senior Aussie Home Loans staff Kolenda, Rushton and founder John Symond.

In 2004, further skills in sales and recruitment experience folded into finance when Kolenda and Rushton approached Nielsen to join them in setting up X Inc.

Recalling the lessons of teamwork from her previous jobs, Nielsen applies the same attitude to life in the fast-paced world of finance as on the trawler: there’s a captain, but when you are riding the waves, it is all hands on deck. “We have built our brand on limited funds,” Nielsen says.

“We were taken to court when we were less than two minutes old and a major bank wouldn’t work with us until it was resolved.” Now, it seems to be plain sailing, but the same principle of equality continues. “I have an open-plan office,” Nielsen explains.

“I personally return calls. I think having a PA is a luxury as you go further up the food chain rather than a necessity,” says Nielsen who shares a PA three other managers.

Having a child has also given Nielsen a different management style - and an understanding of merging a challenging career with raising a child. Commuting between Brisbane and Sydney, she travels with her four-year-old son and nanny, who cares for him in the flat just upstairs from her office in Sydney’s Surry Hills.

“I scheduled my caesarean, then I couldn’t control it (child rearing) any more! When a staff member has a childcare issue, I say, ‘Bring them into the office’, which I never would have encouraged before,” she says.

“If someone brought their child into the office I’d be mentally counting the lost productivity through gritted teeth. “Now I know. The biggest challenge has been to balance my business life with my young son and my husband, who runs a global business of his own. “I love my family and I honestly believe balance is important.”

Golden Rules
1. Stay close to the people who are close to your customers
2. Treat every customer as if they are the last one you will ever get
3. Keep all you key IP (intellectual property) in house. Don’t outsource it
4. Be aware of, and stay on top of what your competitors are doing
5. Believe above all else that there is a solution to everything

For more information on Loan Market go to www.loanmarket.com.au or information on X Inc go to www.xinc.net.au

(Mortgage Professional Australia Magazine)

In the mid-1990s, after studying commerce and law at university in his home state of Queensland, Sam White, the grandson of real estate icon Ray White (and recently appointed chairman of eMOCA Inc), thought he would follow in the footsteps of friends, rather than those of family, and launch into a merchant banking career.

White was determined to steer clear of the family business, the Ray White Group. But this all changed when his father asked him to help research the real estate group’s market share in the Brisbane office. The job opportunity planted a seed in White’s mind, and combining the experience he had gained in research and selling, Sam White helped establish the first Ray White mortgage brokerage in 1994.

A year later, White relocated the business to NSW with the aim of strengthening its value proposition by tapping into cross selling opportunities by aligning with Ray White real estate agents operating in the Sydney market. “We needed the ability to cross-sell - we had to be involved in offering more services to the clients,” he says, recalling the move.

Answering the call
With little evidence of this strategy succeeding elsewhere in the market, the ability of the brokerage to leverage off real estate referrals was a gamble.

“Would clients want to deal with a real estate group that had a finance business? We thought some would laugh at that, but we knew we had to do something,” he says.

The risk was a very real one as the brokerage struggled at first, only recording a profit in 1998, four years after inception. Ten years down the track, however, White can reflect on how he took an untested business idea and facilitated its direction and growth in a market where referral networks between brokers and other industry players are now ubiquitous.

It is certainly a business Sam White can be proud of, Ray White Financial Services (as it is now known) assists in providing $3bn worth of mortgages a year and has 140 lending managers operating in Australia and New Zealand.

A competitive field
Fourteen years after his venture into mortgages, White has taken on his latest 11 challenge, as chairman of eMOCA Inc - the business created by the merger of Ray White-owned aggregator eMOCA and broker firm X Inc in January this year.

According to White, approximately four businesses were originally in contention for the merge, with two failing to make the cut, and the others not culturally on par with the aggregator.

X Inc emerged as the winner, primarily due to its marketing expertise as well as lead generation. “We were looking for partners for some time,” White says.

“We’ve got a good business built on referrals that can be a lot better, but we wanted to add some experience and expertise in lead generation and that’s what they’ve brought to the table in going broader to the consumer.”

While the transaction is not the sum of equal parts (a 65:35 split in favour of eMOCA), the culture that has resulted from the two groups combining supports the direction and strategy adopted by White.

White seeks to build the business through value that better serves marketing and lead generation, whether that is through a call centre or a website.

A rose by any other name
With all the current merger activity comes the need to lift the quality of consult and loan submissions across the industry, and some, like White, are expecting a major shakeout in the composition of the market.

Banks in particular will push for a tightening of submission quality, with broking groups then being forced to up the ante in vying for lenders’ approval.

According to White, early approval signs for eMOCA Inc appear positive, and the challenge now is to better integrate the three distribution channels - X Inc, realestate.com.au and The Loan Market, and strike the balance within those channels.

It is that process of physically bringing about the change that is the next benchmark for White, and this has once again set him on a course of establishing an unique brand in the marketplace.

For more information on Loan Market go to www.loanmarket.com.au or information on X Inc go to www.xinc.net.au

(Mortgage & Finance Brief)

Is it significant that two ex-navy officers who have exactly the same kind of training – which is based on discipline and systems – happen to be like fish in water when it comes to mortgage broking?  And then wind up fighting it out for an Individual Achievement Award at the 2008 MFAA Excellence Awards?

Ship to Shore
Paul Jones left the Royal Australian Navy because he wanted the challenge of being an individual. And so why did he opt for mortgage broking? Paul had been growing property portfolio so he began to learn about loan structures.

Peter Behrendt was more frustrated with the state of the Navy when he left. He reflected on his decision to leave and pointed to senior leadership reality problems with people shortage, overworking more experienced officers and the inflexibility of the system to accommodate good or new ideas.

Learning the ropes
Behrendt selected mortgage broking after a friend – Christine Flay – said he would be great at it. He also saw the profession as a great family-friendly option and he wanted to be his own boss.

“Mortgage broking really is a community service,” he observes. “I needed to feel that what I was doing contribute to the community or help someone and not just be for the sake of generating income.”

He says he also happened to love numbers, property and money – you get it all with broking – along with low start-up costs.

While there are some historical differences between our top brokers and their old ‘salty’ past employer, does the Navy training explain their rapid fire success in mortgage broking?

Behrendt thinks the leadership experience in running a ship or group of ships helped.

“Having been a manager/leader responsible for a lot of people over time, interpersonal skills were very useful,” he suggests. “There’s a lot of risk management training, mental arithmetic and general discipline – being on time, dressing properly, being clean and polite. It’s amazing how many of my competitors weren’t and still aren’t!”

Tricks of The Trade
Behrendt is from the boom city of Perth and thinks he knows what his clients want. “My customers use me because I have a great system that looks at everything,” he reveals.

“This ensures all their needs are catered for and nothing gets missed. I can see them visibly relax when I ask probing questions that they thought a broker wouldn’t ask, but are related to their specific need.”

He also uses a well-worn secret weapon.

“What works? I don’t make appointments – I come around for a cuppa.”

High Achievers
Finally, lets cut to the chase and find out who has been vital in their success story? “My wife has been extremely supportive – without her sacrifices and efforts I wouldn’t have been able to build my business to this point in such a short time,” says Behrendt.

“Thanks should also go to Christine – who I leaned on heavily in the first few months – and the team at X Inc were also brilliant. I wouldn’t be here without them.”

For more information on Peter Behrendt visit http://www.xinc.net.au/wa/peterbehrendt.html

Two-thirds of home owners fear that another hike in official interest rates will place extreme stress on their mortgage, forcing them to either refinance or potentially lose the family home, according to a new survey.

The online poll conducted in March by Loan Market and X Inc Finance, Australia’s fastest growing mortgage broking group, found that after 12 successive increases in official interest rates by the Reserve Bank many home owners were stretched to the limit financially.

About 32.5 per cent of respondents said another rate rise would require them to refinance their mortgage while 33.3 per cent indicated they were near breaking point already and may have to consider selling their residence. In total, 82.5 per cent of respondents felt that another rate rise would require them to take at least some cost-cutting action to make ends meet.

“These findings illustrate the severe strain that many families are under and the tension they have to live with every day, worrying about the future direction of interest rates,” said Jennifer Nielsen, Loan Market and X Inc Chief Executive. “It also highlights the two-tier nature of the economy, where employment is at record highs yet housing affordability is at record lows.

“Mortgage stress is not just occurring in isolated pockets but is becoming increasingly common throughout Australia,” she said. “Families across the country are really on a knife-edge as they wait for the next move in interest rates.”

Only 17.5 per cent of respondents to the survey thought another increase in interest rates would not cause a substantial problem.

Ms Nielsen said Loan Market and X Inc believed there to be an equal chance of the Reserve Bank raising the cash rate or leaving it unchanged at 7.25 per cent when the RBA’s board meets again in May.

The April online survey looks at whether people will change lenders if the Federal Government makes it easier to switch accounts between the banks. People can participate in the survey by visiting www.xinc.net.au

X Inc Finance survey results:

Q: How are you coping with your mortgage following recent interest rate rises?

Enough already! I’m worried we’ll lose the house   33.3%
We’ve cut back as far as we can – the next step is refinancing  32.5%
It’s not a big problem and is unlikely to be in the future   17.5%
Another rate rise and we’ll have to rein in household spending  16.7%

For more information on X Inc go to www.xinc.net.au or information on Loan Market go to www.loanmarket.com.au 

To create focused residential business and Australian first commercial loan broker
 
Loan Market and X Inc Finance today announced a major restructuring that would create two distinct entities, comprising a $10 billion residential mortgage group and Australia’s first national commercial and business loan broker backed by a major aggregator.

Jennifer Nielsen, Loan Market and X Inc Chief Executive, said that under the changes Loan Market would become the group’s primary residential real estate mortgages brand with a team of 500 brokers writing approximately $600 million worth of loans every month.

Meanwhile, X Inc would take the next step in its development and concentrate on meeting the financial requirements of the significant and growing Small to Medium sized Enterprise market.

The changes are effective from June, when Nielsen expects the new Loan Market advertising to be on air and on the internet.

“I’m pleased to announce this reorganisation, which we expect to deliver better clarity to our customers and create a more efficient and focused group with the ability to handle greater volumes of business at a time of significant growth in the mortgage broking industry,” Ms Nielsen said.

“The changes are a logical progression for our business and will give us an excellent opportunity to better leverage the core strengths inherent in both brands.”

Ms Nielsen said Loan Market enjoyed strong relationships with thousands of real estate agents across Australia.  It had a well known and reputable name, strong brand awareness and marketing support including a great phone number (13LOAN) and an outstanding future with business expanding month on month..

She said repositioning X Inc to cater for the needs of the SME market presented the group with an exciting opportunity to become the first major aggregator in Australia to launch a dedicated commercial, business and high net worth loan broking group.

“While big business is well catered for, we believe that the financial requirements of SMEs have been largely neglected to this point and that’s something we intend to remedy,” she said.

Approximately 250 X Inc brokers will merge with the Loan Market business.

Ms Nielsen said the goal for the new, expanded Loan Market was to create the biggest retail mortgage brand in Australia while ensuring that a Loan Market broker is attached to every residential real estate agent in the country.

Loan Market will launch its new advertising campaign in May / June, targeting the residential mortgage market.

The changes were foreshadowed in October when the companies merged to create Australia’s leading branded mortgage business with an $10 billion loan book.

“When the merger occurred our goal was to create a business with the scale, product offer and geographic reach that hadn’t been seen before in Australia,” Ms Nielsen said. “The changes we’ve announced here take us a large step closer to fulfilling that promise.”

For more information on X Inc go to www.xinc.net.au or information on Loan Market go to www.loanmarket.com.au

(Australian Banking & Finance Magazine)

Founding director and director of sales and marketing at Australian First Mortgage, Iain Forbes, has predicted a 50% fall in business as a result of the hard times hitting Australia’s economic shores.

Forbes spoke to Australian Banking & Finance Magazine, “When you consider that since November last year there has been three interest rates increases and the fact that some banks increased their rates by a further four to fifteen points above the Reserve Bank, then one has got to expect a decline in lending.

“In a recent meeting we looked at where we think the industry’s going and we think 2008 will be an extremely difficult year.

“We don’t expect to see volumes being written by us that were written in 2004, 2005, 2006, or even in 2007.

“We think there will be a definite decline in new business volumes, and we are prepared for that.

“What we are seeing in the market place is that funds are not easy to come by and if they do eventuate then it’s at a price.  And who is going to pay that price?  It’s going to be the end borrower, whether it’s a first home buyer, investor or otherwise.

“Therefore interest rates are just skyrocketing.  They go up everyday,  I sit at my desk and look at my computer and someone’s put their rate up by 0.25 or even more. 

“Having regards to that, the people who are reasonably well-off and maybe able to buy an investment property or could have bought an investment property because variable rates are high and fixed rates are even higher than variable rates.”

Banks to tighten lending

Forbes’ comments follow warnings by RBA officials that banks might have to restrict the amount of money they lend to customers.

In a speech following the latest rate rise, Reserve Bank of Australia assistant governor (financial markets) Guy Debelle, said, “Because the banks have been able to maintain their pre-crisis pace of issuance, they have not curtailed their provision of credit, beyond charging a higher price.

“However, were the banks to experience difficulties in continuing to access funding, one might see a quantitative constraint placed on credit provision in addition to that provided by the price.”

Malcolm Edey,  Assistant governor (economic), in another speech, also said, “Banks have been responding to the higher funding costs by increasing their lending rates.

“They’ve also tightened their lending standards to risky borrowers, and that process may have further to go.”

Adelaide Bank, a day after the rate rise,  lifted its wholesale mortgage lending rates by 40 basis points.  The increase applies to more than 30 mortgage managers that the bank deals with.  A bank spokesperson told AAP the increase was an obvious response to global funding markets.

“It’s not a decision made with we consideration for all of our stakeholders and is not taken lightly” the spokesperson said.

And St George, Australia’s fifth-largest bank was reported to be considering rising its standard variable rate by up to 40 basis points to fully cover higher funding costs.

Forbes said, “We maintain very high credit standards.  We are not there to write business for the sake of writing it.  We won’t do it.  We will not argue with a mortgage insurer if a deal is declined because they knew something that we did not know.  We just won’t do it, it’s not worth the pain.

“I think what we are now seeing is that other lenders who may have not been as studious as what we are…are tightening up, some of them are stranded.”

Bad news for the economy

Forbes predicted the economic situation would worsen.

“I’ve been in the business for 40 years,” he said.  “You cannot have these boom times at all times.  The outlook is grim and as far as we are concerned families have prepared and are continuing to prepare for tough times ahead.

The head of mortgage broker X Inc Finance and Loan Market, chief executive Jennifer Nielsen told Australian Banking & Finance Magazine said, “The issue for lenders is about the margins.  The major lenders are clearly trying to contain costs and shifting more processing responsibility to brokers.  There is also a clear focus on quality business which we welcome.

“We’ve had a record number of inquiry months.”

Nielsen said she expected another rate rise next month and in May.

“I reckon that’s about it for the year,” she said.  “The Reserve Bank’s job is to keep us out of the boom-bust cycle.  They wouldn’t be pushing much further than that given the way it looks like we’re behaving at the moment.”

Meanwhile, Forbes said as a result of the turbulent waters consolidation in the domestic mortgage market was inevitable, but cautioned against such moves.

“We have been approached by smaller mortgage managers to merge or acquire their businesses,” he said.

“We have looked at a few.

“And we haven’t done one because we think it’s extremely dangerous.  We run a good, tight ship and a fantastic business.  Why should we go and buy, say, if someone thinks his business it worth X number of dollars based on what was paid two years ago, that’s not what I would pay for a business today because it’s not worth that amount of money.

“And if I get a real good bargain and there’s something wrong with it, am I buying a can of worms?  Why do I want to go and get myself into trouble by buying into a business that can cause me more trouble than any good?

“But having said that there’s a lot of consolidation going on.  There’s a lot happening out in the market place.  There are companies out there for sale.  There are companies that are bleeding.”

Macquarie Bank is an example of that bleeding, which announcement late last month it was taking a step back from its mortgage portfolio, citing the poor economic conditions.

Macquarie’s mortgage portfolio comprises about 2.5% of the total outstanding housing loans market in Australia.

“The portfolio is currently predominantly funded by wholesale securitisation markets,” the bank said.

“As noted by numerous market participants. Deteriorating conditions in these markets over the past six months have resulted in a sharp rise in the cost of funding mortgages and significant reductions in the availability of funding mortgages from both the domestic and international mortgage securitisation markets.”

Peter Maher the head of Macquarie’s Banking and Financial Services Group added: “New mortgage business will continue to be written although it will be at much reduced volumes.”

In further proof of the turbulent times, managing director of mortgage advisory group Firstfolio, Mark Forsyth, late last year said, “The mortgage industry must face up to the fact that further consolidation amongst brokers is inevitable.

“The recent events in the U.S., which have had a knock on effect on the mortgage market in Australia, coupled with greater pressure on margins, show that brokers should be thinking about what umbrella group they are sitting under, their service offering, and the value they can create with their clients.”

For more information on X Inc go to www.xinc.net.au or information on Loan Market go to www.loanmarket.com

Did you know that your investment borrowings may also assist you to either increase your yield or maximise your tax benefits?  There are a few golden rules to getting the most out of the borrowing side of your property investments.

1. Make sure you review your property investment loans regularly to ensure you are getting the maximum benefits. Over the course of a long-term property investment plan, the type of loans available and your situation may change dramatically.

2. Be disciplined about the kinds of add-ons you pay for with your investment loan. Only get features and benefits you will really use. They all cost you money.

3. Do the math and change loans if there is a long term benefit. Even though the costs can add up to anywhere from hundreds to thousands of dollars, changing to a more sensible structure or lower interest rate now may actually save you quite a bit more over a long investment period. With the help of a good mortgage broker, you won’t even need to do most of the work.

The extra money you save or earn because of the change can help you to expand your property portfolio, undertake redevelopment projects, take advantage of the tax benefits of paying your interest in advance, finance renovations on your home, or even top up your superannuation.

Loan refinancing costs may include:
• Deferred Establishment Fee, also called Early Termination Fee
• Deferred Settlement Fee
• Discharge Fee, sometimes called Exit Fee
• Penalty Interest
• Switching Fee
• Establishment Fees

Investment finance can be a complex area and a specialist mortgage broker can make all the difference between a good investment and a great one.

For more information on X Inc go to www.xinc.net.au or information on Loan Market go to www.loanmarket.com

With years of lending experience across a broad range of lenders, I have worked with all kinds of loans.  The competitive home loan market changes every day so Whether you are first home buyer; refinancing your home or purchasing an investment property, I make sure my clients are given the best option every time.

First Home Buyers - Investment- New Homes: No matter what your buying situation, I strongly advise all clients to obtain a home loan pre-approval. This is free and helps you budget better as you know how much you can borrow and what costs are involved.
 
A home loan pre-approval tells agents you are a serious buyer.  The success rate of clients with a purchasing property is very high and most clients will use the pre-approval process to price bargain.

Refinancing: I can help you find a basic home loan with low interest rates, no fees and no charges.  These types of loans work very well if you can pay anything extra above the minimum payment.

Finance for the Self Employed: While the home loan market for self employed individuals has become easier, it is still harder than PAYG applications.  That is why it is important to use an accredited broker who thoroughly understands your financial needs, to get the best result. 

Trevor Buultjens & Associates
Principal mortgage broker: Trevor Buultjens
Office address: 97 Yarra Street Geelong Victoria 3220
Office: +61 3 95222 8179 
Mobile: 0425730872 
Fax: +61 3 52215140
Email: trevor.buultjens@xinc.net.au
View profile: http://www.xinc.net.au/vic/trevorbuultjens.html