Article Archive

Mortgage Valuation Scam Fear

Letter to the Editor, Courier Mail

December 10th 2003

The Editor
The Courier Mail
41 Campbell Street
Bowen Hills Qld 4006

Attention: Mr David Fagan,

Dear Mr Fagan,

Re: Mortgage Valuation Scam Fear

The article on today's front page of The Courier Mail written by Hedley Thomas is disturbing to mortgage brokers because it contains grossly exaggerated allegations about the extent of fraudulent and unethical conduct within the industry, which cannot be substantiated. Our office has been inundated with calls from frustrated members, angry that their good reputations are sullied in this way.

The assertion by valuer Ian Herriot that loan document tampering by mortgage brokers is "rife" in Queensland is outrageous and that view is not supported by lenders in the mortgage industry. It is interesting to note that the company identified in the report is a direct funder in the market and not a mortgage broker.

The suggestion that one in seven of all mortgage broker transactions had been negatively influenced by fraudulent or unethical practices cannot be substantiated and Mr Herriot should either produce evidence to support his claim, or withdraw them immediately and issue an apology to all finance brokers.

The majority of lenders arrange their own valuations and the opportunity for third party influence does not exist. Any direct knowledge of fraudulent activities should be reported to the Police so the offending party can be readily dealt with. Mr Herriot and members of the public are encouraged to report any incidents of unethical conduct to this Association, which binds its members to a comprehensive Code of Practice and offers a free Disputes Resolution Service.

With the Federal Government declining to incorporate the credit market in the Financial Services Reform Bill, this Association continues to work closely with various State Departments of Fair Trading to support the introduction uniform national regulation of the mortgage broking industry.

Until uniform national regulation is introduced, underpinned by a mandatory Code of Conduct and competency based training, a few unethical operators will continue to taint an otherwise well respected industry that provides a valuable service, as evidenced by the popularity of mortgage brokers with both consumers and lenders. An estimated 30% of all home loans are originated by mortgage brokers.

Yours faithfully,

Chief Executive Officer