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Mortgage originators escape Act

MORTGAGE originators are among a group of professionals that looks to have escaped the provisions of the Financial Services Reform Act.

Under the FSR Act, credit facilities are exempted from regulation, however a lack of a clear definition of exactly what constituted such a facility had the mortgage origination industry holding its breath to see whether or not mortgages would be affected.

A definition of credit facilities has been recently released and includes mortgage loans.

The standard activities of mortgage originators, which can involve general advice on negative gearing, interest rates and cashflow planning, will not be touched because they do not involve specific financial products, according to Gadens Lawyers Sydeney managing partner Jon Denovan.

But he warned that if an originator wished to sell life, home or consumer protection insurance, they would need to either hold an Australian Financial Services licence or become an authorised representative of a licence-holder.

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