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Broker in for the long haul

DESPITE the furore surrounding the mortgage broking industry, Barry Barr & Associates principal Barry Barr says he is plugging on.

Rumours that he is selling up and getting out of the business are unfounded.

True, there are parties interested in buying his licenced finance broking and loans management firm which has around $170 million of clients’ funds under management.

However, this does not mean Mr Barr is bowing out.

“If the business is sold, I will be staying on as managing director,” he said.

“I’m too young to get out. I’m only sixty. Besides, I enjoy working. Why get out if you’re enjoying it?”

Mr Barr started his firm in 1986, following tenures with Perpetual Trustees, the National Australia Bank and a partnership with another broker.

He also spent three years as general manager of the WA Trotting Association.

Mr Barr said the deregulation of the banking industry had resulted in big changes to the whole industry.

“When I was in banking, the marketplace was simpler,” he said.

“Banks handled only their traditional business; finance companies handled speculative investments, leasing and hire

purchase; finance brokers had a lot of the home loans and merchant banks handled the really big deals.

“Since deregulation, there is no real need for finance companies and merchant banks.

“Finance brokers have survived because they had the home loan business.”

Mr Barr said banks could now do whatever they wanted to and would often “break the rules”.

He commented that banks had to pay more to service the capital in a commercial loan than they did a home loan.

Mr Barr said he knew of occasions when banks had set up what were essentially commercial loans as home loans. Before deregulation, banks were subject to strict qualitative and quantitative restrictions by the Reserve Bank.

“Banks didn’t have the funds to lend. In 1974, the NAB allocated $3 million per week for the eighty-five branches in WA to lend.

“Most of that money went on business overdrafts.”

Mr Barr’s business is one of only four WA firms licenced to conduct mortgage investment schemes in accordance with the Managed Investment Act.

The Australian Securities and Investment Commission is responsible for administering the Managed Investments Act.

“We can take money into pooled

mortgages from investors. We can lend ten to fifteen people into one mortgage.

“The problems aired by the Gunning Enquiry have not affected us because we’re licenced.

“With every lending proposal we issue a prospectus with full disclosure. “We will not lend beyond 70 per cent of the property. The lender has to provide at least 30 per cent equity.”

Mr Barr is also heavily involved in the mortgage industry both in WA and nationally.

He is the immediate past national president of the Mortgage Industry Association of Australia and is president of the MIAA’s WA branch.

Mr Barr has been involved with two recent moves by the MIAA – the development of its code of practice and the Building the Future plan to promote the mortgage origination industry.

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