FBAA survey reveals brokers’ distress
A recent survey by CoreData for the Finance Brokers Association of Australia (FBAA) has exposed the dual challenges faced by mortgage brokers due to clawback policies: significant emotional distress and financial losses.
With eight in 10 brokers affected by clawbacks in the past year, with nearly half of polled brokers losing more than $10,000 each due to lenders’ clawback policies, this revelation has brought to light the financial and emotional toll on mortgage brokers, prompting urgent calls for industry reform.
Financial strain leads to emotional turmoil
A clawback requires brokers to return part of their commission if a loan is repaid early, typically within a predetermined period. This policy compensates for the lender’s lost interest but can undermine brokers’ financial stability.
For example, a broker earning a commission on a $300,000 mortgage may need to refund some if the loan is refinanced within two years, impacting their financial security.