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Mortgage sellers challenge banks

POOR public perception of banks has helped create the mortgage origination industry.

Originators offer a smorgasbord of lenders who all compete for the business of mortgages.

They offer clients the best deal possible from a range of lender services. The originator is paid by the lender.

While the industry is making major inroads into the home lending market, the potentially more valuable business lending market is proving more difficult to crack.

One possible reason for the lack of interest in the business market is that often the needs of business are more complex and require more ongoing service. Another is that the banks are already servicing the business market at competitive rates.

Some firms like LoansCorp are dabbling with business clients but the bread and butter still remains with the housing market.

Anecdotally, mortgage originators are responsible for 70 per cent of all home loans written in this State.

Around 88,000 loans were written in WA last year by mortgage originators, before refinancing is taken into account.

The Eastern States started embracing the concept only three or four years ago, while in WA the industry has been going for about a decade.

The concept was started by the Statewide Building Society in 1988.

The national average for mortgage broker introduced business to banks is now 20 per cent, up from 9 per cent the previous year.

Mortgage origination is considered to be one of the top five growth industries in Australia.

In Perth, Covenant Finance and Ashe Morgan Winthrop, Security Capital Corporation and International Finance and Investment, have among others, tried to focus on the largely untapped commercial market.

Covenant Finance director Glen Buckley said he was predominantly interested in the commercial property market.

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