Mortgage brokers ramp up calls for fairer clawback policies | Mortgage Professional Australia

Published 25 February 2025

Brokers losing thousands a year to restrictive banking clauses

Few matters can elicit more contemptuous groans from brokers than the issue of clawbacks. It’s not difficult to understand why.

Consider the scenario: You, the broker, have spent countless hours securing a home loan for your client, with the expectation of generating a few thousand dollars in commissions for your hard work.

All is well until a few months down the line, when your client gets a divorce and decides to sell the house. As a result, the lender, which has suddenly found itself with one less 30-year mortgage on its balance sheet, snatches your commission back.

It sounds unfair, but this is the reality for mortgage broking in the 2020s.

According to new data compiled by the Finance Brokers Association of Australia (FBAA) and CoreData, eight in 10 brokers were affected by clawbacks in the past year, with nearly half of polled brokers losing over $10,000 each due to lenders’ clawback policies.

Major banks tend to have the strictest clawback provisions, said the majority of polled brokers, although about two in five said all lender types are equally strict.

Clawbacks are also contributing to stress levels among mortgage brokers, said the FBAA. Now, calls for fairer clawback policies are getting louder.

View Original Article