Tim Allerton | MFAA | June 20, 2012
The numbers of mortgage brokers expelled from the Mortgage & Finance Association of Australia (MFAA) has doubled from four to eight during the 2011/2012 financial year.
The majority of the record number of expelled members was found by the MFAA’s Disciplinary Tribunal to have engaged in “serious misconduct” through submitting fraudulent loan applications to lenders.
CEO of The Mortgage and Finance Association of Australia (MFAA), Mr Phil Naylor, said: “The numbers of expelled members are minuscule compared with our total number of 11,200 members, however the number is still double those expelled in the 2010 financial year.
“The increased expulsions demonstrate the MFAA’s determination to ensure the highest professional standards of our members, as well as a strict and independent disciplinary procedure and very high education standards.”
The MFAA has a set of disciplinary rules to deal with complaints of alleged misconduct against an MFAA member, initially involving an external investigating officer, who then may refer the matter to the MFAA Tribunal. The MFAA Tribunal has the power to impose various sanctions on a member for misconduct, including expulsion from membership of the MFAA.
Mr Naylor said while it was heartening to see that so few members had been expelled, the MFAA was determined to ensure a high standard of professional conduct by its members notwithstanding the fact that the National Consumer Credit Protection Act (NCCP), enforced by ASIC, had come into force in 2011.
He added “mortgage brokers are now a vital channel for home loans, providing greater customer choice and competition in the market, with a 42 per cent share of the mortgage market. On this basis, we need to enforce strict rules on our members to ensure they deliver the best possible service and customer protection”.
Mortgage brokers have lifted dramatically their share of the home lending from 25 per cent 10 years ago, showing their growing acceptance as a viable distribution channel under the auspices of the MFAA.
Mr Naylor, said “we expect that the mortgage broker share of the market will expand further this year and the MFAA will continue to be vigilant in weeding out the very few rotten apples in the industry”.
The majority of the expulsions covered loan applications where income and savings data of the applicant were dishonest.
“It is now clear to borrowers that MFAA members are established as a trusted source of information and loans for borrowers and we need to ensure they continue to adhere to our strict code of practice,” concluded Mr Naylor.