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     Australia’s top
     non-bank lenders
     Non-bank lenders have managed to become a major
     force on the Australian mortgage scene since their
     inception, with the role of brokers growing along with
     them. Luke Cornish analyses the results from MPA’s
     annual survey to find out which non-bank lenders are the
     best to do business with

                                                                          hen non-bank lenders first emerged in Australia         the Pacific, had a significant impact back home despite the fact
                                                                          in the mid-1990s, few could have predicted how          that there was not such recklessness in the domestic market.
                                                                          quickly they would have an impact on the home               As the major international investment institutions were left
                                                                lending scene. Formerly the reserve of the big banks, non-        counting the cost of sub-prime loans that were not worth the
                                                                bank lenders democratised the lending industry and brought        paper they were written on, funding on international markets
                                                                with them cheap and flexible loans.                               dried up, prompting central banks around the world to pump
                                                                    In the decade that followed, the major banks saw their        in billions of dollars to ensure some semblance of liquidity.
                                                                market share slip away to the likes of RAMS, Pepper,                  Many Australian non-bank lenders were hit as funding
                                                                Bluestone and a host of other non-bank lenders that developed     lines disappeared and consumers became wary of where the
                                                                their own products and were often able to say ‘yes’ when a        money to buy their homes was coming from. By the end of last
                                                                traditional lender would have declined. The introduction          year, non-bank lenders in Australia were facing their biggest
                                                                of non-bank lenders completely reshaped the Australian            challenge so far. Cheap funding had dried up, consumer
                                                                mortgage landscape and the players in the industry went from      confidence had waned and RAMS (winner of best rates and
                                                                strength to strength.                                             best product range last year) had collapsed spectacularly.
                                                                    That upward trend hit a sticky patch in the middle of last        However, the canny businessperson sees opportunity in the
                                                                year when the US market found out that brokers and lenders        most hostile of markets and many non-bank lenders were able to
                                                                had been over-extending themselves and lending money to           take advantage of turmoil in the industry to increase their loan
                                                                high-risk borrowers. These decisions, made on the other side of   book size as well as gain market share and increase broker loyalty.

76                                                                                                                      77

         The rise of non-bank lenders coincided with an increase in          least 30 different non-bank lenders nominated. It is natural in a
     business conducted through mortgage brokers, to a point where more      survey of this nature that the larger non-bank lenders will feature   ‘Can do’ attitude
     than half of new residential loans now go through a broker. This is     higher on lists as they will have accredited more brokers than the    With consumers coming from many
                                                                                                                                                   different financial and personal
     hardly surprising given that non-bank lenders brought with them an      smaller niche players.                                                backgrounds, Darryl Leahy with Guardian
     array of new products and choices for consumers.                            Smaller non-bank lenders and new entrants to the market           Finance says it is important that he is able
         Gone are the days of a young couple sitting nervously across        may well be restrained by geographic area serviced and having         to work with funders that are flexible and
                                                                                                                                                   can get a job done.
     from their bank manager waiting to see if they are able to buy          a smaller accreditation base. This means that while there were
                                                                                                                                                        “I’m finding with these non-secured
     their first home. People can buy homes with a small deposit, not        brokers that selected them as being the best in one or more areas,    lenders that they’ve got more flexibility
     much documentation, or impaired credit, but they need to find           they were unable to challenge for the top spots.                      to get the loan done,” he says. “I’m here to
                                                                                                                                                   act for the client so that’s what I need and
     an impartial voice to guide them through the maze of products.                                                                                want. They can get the job done.”
     That is where their friendly local broker comes in, together with       Identifying trends                                                         Leahy says that the interest rate is not
     the usually accommodating non-bank lender.                              On the whole, trends for non-bank lenders were not overwhelmingly     the primary motivating factor in choosing
                                                                             positive as consumers who have been reading doom and gloom            the right loan for his clients. He looks to
                                                                                                                                                   the non-bank lenders’ better service and
     The survey                                                              headlines are requesting loans from more traditional lending          alternative products as well.
     Brokers ultimately determine how successful a non-bank                  institutions, especially in the wake of the RAMS collapse.                 “In our situation, it’s not purely driven
     lender will be, which is why MPA’s annual broker survey is an                Some 42% of respondents in the survey said that less than a      by interest rate, it’s driven by service,
                                                                                                                                                   getting the job done and getting the loan
     important industry tool for tracking trends and discovering who         fifth of their business was being given to non-bank lenders. Of       structures and strategies exactly how
     the emerging champions of their sector are.                             those, 81% said this proportion was either the same or down on        we want them,” he says. “Over half my
         The survey consisted of 11 questions aimed at finding out           the previous 12 months.                                               clients are in regional Australia and they’re
                                                                                                                                                   totally discriminated against in service
     which non-bank lenders were performing best in six categories                However, for those brokers putting more than 20% of their        out there. A lot of these mining blokes
                                                                             business through non-bank lenders, 45% said they were now             are earning massive money but they can’t
                                                                             sending even more business the way of the non-bank lenders            get finance and can’t get it set up, and
                                                                                                                                                   that’s really hamstringing their ability to
                                                                             than they were last year.                                             create wealth.”
                                                                                  Overall, two thirds of respondents said they were either              While many brokers are focusing on
                                                                             doing the same amount or more business with non-bank lenders          the security of the major banks, Leahy has
                                                                                                                                                   seen a major shift in his business away from
     The rise of non-bank lenders                                            than they were previously. So, despite the news reports and the
                                                                             nervousness in the markets, non-bank lenders are managing to
                                                                                                                                                   the ‘big four’ and towards
                                                                                                                                                   non-bank lenders because of their

     coincided with an increase in                                           continue to grow their loan books by differentiating themselves       flexibility and ability to do seemingly
                                                                                                                                                   impossible deals.
                                                                             from banks by way of innovative products and dedicated service.            “It used to be 90% bank, 10% non-bank

     business conducted through                                              Likes and dislikes
                                                                                                                                                   and now it’s the reverse,” he says. “We’ve
                                                                                                                                                   bucked the trend. A lot of people have
                                                                                                                                                   jumped out of non-bank lenders at the
     mortgage brokers                                                        Brokers said that there were many reasons why they often
                                                                             preferred to use non-bank lenders over the traditional lending
                                                                                                                                                   moment but it’s like everything – you have
                                                                                                                                                   to pick the right ones to deal with.”
                                                                             institutions, including their ability to get deals done that the
                                                                             banks shy away from, and flexibility in working on a deal.            Here’s wHat brokers say
                                                                                  Many brokers liked the fact that non-bank lenders tended         tHey like about non-
     as well as finding out more information about the amount of             not to work with a ‘tick-the-box mentality’. Others said that
     business being put through non-bank lenders. Brokers from               they went to non-bank lenders because their clients were sick of      banks:
                                                                                                                                                   •	 Ability to accommodate deals that are
     every corner of the country took part in the survey – either            having to deal with the banks day-to-day.                                too marginal for the banks
     through our online form, a faxed-in form or by telephone – to                “Customers don’t want to deal with the big banks,” said one      •	 Ability to discuss clients’ circumstances
     make sure the results were as comprehensive as possible.                respondent. “They believe the banks don’t do them any favours;           in a ‘non-tick-the-box’ manner
         Brokers were asked to nominate just one non-bank lender for         they don’t have the personal interest in them.”                       •	 Customers don’t want to deal with the
                                                                                                                                                      big banks
     each of the six categories to signify which company they thought             However, other respondents said that location and local          •	 They don’t compete with brokers
     was performing the best in each area. These key areas of business       offices played a big part in who their customers wanted to work       •	 The support received throughout the
     included interest rates, product range, approval/turnaround time,       with. There is also much to be said for name recognition when a          approval process
     BDM support, broker support and IT and customer service.                client is choosing which institution to borrow money from.
         As in previous years, due to the number of players there are             “Being regional, most of our clients prefer to deal with ‘big    brokers say tHey would
     in the field, we did not give brokers a list to choose from. Because    five’ banks where they can see and deal with a local branch,” said    use non-banks more if:
     of this, some responses were discarded where they nominated a           another survey respondent. “Nothing will really change this and       •	 Clients were more confident in the
     company that was an Authorised Deposit-taking Institution and           the recent funding issues will make it even harder to go non-bank.”      availability of funding
     regulated by the Australian Prudential Regulation Authority                  Funding issues certainly played heavily on many brokers’         •	 There were better service and a faster
                                                                                                                                                      turnaround from BDMs
     unless the lender was a building society or credit union.               minds with a number of respondents saying that their customers
                                                                                                                                                   •	 There were less and lower fees and
         MPA tallied the results and came up with a list of winners.         were more interested in finding out how their loans would be             charges
     The non-bank lenders with the most votes came top of the list           funded, and wanted to be educated more on the whole system.           •	 They reduced their exit fees
     with the next three recognised as highly recommended in the             Other brokers steered clear of certain non-bank lenders altogether.   •	 The comparative rates where not so
     six areas.                                                                   “As a broker, I don’t recommend certain lenders purely              expensive (Broker say the break fees
                                                                                                                                                      are shocking)
         It is worth noting that, despite the fact that only six different   because of the uncertainty regarding their funding lines,” said
     non-bank lenders made it into the rankings, each category saw at        one respondent.

78                                                                                                                                                           79

                                                                                 Interest rates

                                                                                 National Mortgage Company
                                                                                                                                “You can never be the cheapest
                                                                             HIgHLy recommended                            because there’s always someone coming
                                                                             Homeloans Ltd                                 out with a discount for a particular
                                                                             Bluestone Mortgages                           month,” he says. “The non-bank lenders
                                                                             Heritage Building Society
                                                                                                                           that have got themselves in trouble are the
                                                                                                                           ones that have chased the cheapest rate.

                                                                                   ational Mortgage Company                Look what happened to RAMS when
                                                                                   (NMC) is the non-bank lender            they did it. They were lending short-term
                                                                                   that stood out in our survey as         to fund long-term and it was a disaster
                                                                          being best in taking advantage of a tough        waiting to happen.”
                                                                          funding environment to secure good                    The fallout of the US sub-prime
                                                                          rates for its brokers. Chief executive Steve     collapse hit all lenders hard globally
                                                                          Dover says that his company’s relationship       including NMC, but the company’s
                                                                          with several major funders including             business model was set up so that it could
                                                                          ING, Bendigo and Adelaide allows NMC             weather the storm. After an initial 20%
                                                                          to offer competitive rates.                      hit in September when the losses became
      Mighty fall – RAMS Home
      Loans won best rates and best                                           “It’s not a priority, it’s a mixture,” he    apparent, NMC bounced back and had
      product range last year                                             says. “We’ve got great rates – we’re very        record months in October and November.
                                                                          competitive on our rates but we’ll never         Dover says that NMC saw the inherent
          When you are in a business like loan writing, you               chase the cheap rate scenario.”                  risks involved with that lending model
     know that time is money. Perhaps that is why non-bank                    Dover says that the competition in           and worked to let their brokers know
     lenders remain a vastly popular choice among brokers,                the non-bank sector means that it is             what was coming up.                               done, rates to brokers – and particularly
     with a number of respondents hailing non-bank lenders’               impossible to compete on rates alone                  “We were trying to get that message          ones that have been around for a while –
     ability to get deals turned around quickly, which makes
     everyone happy.
                                                                          because there is always someone making
                                                                          a special offer. Instead, it is important to
                                                                                                                           out into the marketplace for the last
                                                                                                                           couple of years and some of the brokers
                                                                                                                                                                             are never on the top of their list. They’re
                                                                                                                                                                             within the top, but they’re never the top.”
                                                                                                                                                                                                                           “We’ll never
          One broker said they were most impressed with the support
     received throughout the approval process and the willingness
                                                                          have consistently good rates coupled with
                                                                          a good business model.
                                                                                                                           listened to that and are happy that they
                                                                                                                           did,” he says. “It’s a slippery slope if you’re
                                                                                                                                                                                 According to the brokers we polled,
                                                                                                                                                                             Dover is right, with brokers saying that
                                                                                                                                                                                                                            chase the cheap
     that non-bank lenders showed to get the deal done. He also
     said that he was not afraid that a non-bank lender would poach
                                                                                                                           just concentrating on rate – there’s not
                                                                                                                           much you can do to secure business. If
                                                                                                                                                                             price was only the fifth most important
                                                                                                                                                                             reason that they used non-bank lenders
                                                                                                                                                                                                                            rate scenario”
     his client.                                                               What percentage of business do              you look at all the surveys that have been        over banks.
          Others came out with a list of qualities that made them              you put through non-bank lenders?
     prefer non-bank lenders, including personal service to clients,
     excellent turnaround times, innovative products and flexible
     solutions. Non-bank lenders are ‘value-based rather than price-                     81–100%:
     based’ was a sentiment expressed by one respondent.
          The rest of 2008 promises to be very eventful for non-bank                61–80%:                20% or less:
     lenders (and the whole mortgage industry) as everyone involved                   13%                     44%

     tries to get a grip on an increasingly turbulent global economy, a
     likely recession in the US, and local interest rate hikes aimed at
     dampening inflation being supported by record oil prices.                         16%
          The companies that came out on top in our annual survey                              21–40%:
     all have one thing in common: they are operating off a sound                                17%

     business plan that will allow them to ride out the tough times as
     well as enabling them to flourish in the good times.
          Congratulations to the non-bank lenders that topped our             Is this percentage more or
                                                                              less than 12 months ago?
     survey and thank you to all the brokers who participated and
     shared with us their professional opinions.                                 More: 35%     Less: 32%       Same: 31%


     Winner:                                                                                                                                                                                     Winner:
     Product range                                                                                                                                                                               Approval and turnaround times

     National Mortgage Company                                                                                                                                                                   National Mortgage Company

                                                                                                        Dover says that the company is very
                                                                                                   careful when it rolls out a new product
                                                                                                   to make sure that it is not just a headline-
                                                                                                   grabbing flash in the pan but that it will be
                                                                                                                                                                                                                                              “The only way that
                                                                                                   around for the long haul. New products are
                                                                                                   introduced to a select number of brokers and
                                                                                                                                                                                                                                               we exist in the
                                                                                                   monitored for popularity and sustainability.
                                                                                                        “We trialled a few non-conforming
                                                                                                                                                                                                                                               marketplace today is
                                                                                                   products and it took us a while to get that
                                                                                                   product right, but because we got that
                                                                                                                                                                                                                                               by creating solutions
                                                                                                   right, now we’re lending where most others
                                                                                                   are pulling back,” he says.
                                                                                                                                                                                                                                               and getting them
                                                                                                        There are new products on the horizon
                                                                                                   for NMC with the non-bank lender
                                                                                                                                                                                                                                               done quickly”
                                                                                                   always looking to be a market leader in
                                                                                                   innovation. Dover expects to roll out
                                                                                                   at least a couple more this year as the
                                                                                                   company looks to take advantage of trends                                                                                                  control. NMC invests in systems, staff
                                                                                                   in the industry.                                                                                                                           and training to ensure that the deals that
                                                                                                        Homeloans Ltd was highly                                                                                                              can be done are done quickly. He says
                                                                                                   commended in this category. Managing                                                                                                       this can eat into the bottom line but it is
                                                                                                   director Brian Jones says the non-bank                                                                                                     so important that it is worth sacrificing
                                                   a home loan that allows borrowers to            looks to see what is working in Europe and                                                                                                 a bit of profit to keep the brokers, and
      HIgHLy recommended                           choose their own repayments and it offers a     the US and “certainly keeps track of trends                                                                                                ultimately the customers, happy.
      Homeloans Ltd                                protected way of doing it.”                     in our own backyard”.                                                                                                                          “It’s good to know that we’re still
      Bluestone Mortgages                               With this product, part of the repayment        “It’s hard to be truly innovative – most                                                 won’t ever get another deal from them.”      on track because the only currency we
      GE Money
                                                   of the loan comes from the normal monthly       new products are deviations of what’s             HIgHLy recommended                              Dover says that brokers are much         have in the marketplace is doing a good
                                                   payments with the other portion coming          already out there,” Jones adds.                   Bluestone Mortgages                         more understanding than that and the         job today, not yesterday,” he says. “As a

            hese days, having the full set of      from the client’s borrowings. Dover says                                                          Homeloans Ltd                               ones they deal with appreciate a speedy      non-bank lender this is probably the best
            fixed and variable rate mortgages      people are using it when they take time off                                                       Heritage Building Society                   ‘no’ almost as much as a speedy ‘yes’.       award to win because it’s something we
            is just the beginning of offering      work for maternity leave, a sabbatical or to                                                                                                  Non-bank lenders can get so wrapped up       have complete control of.”

     a comprehensive range of home loan            further their education.                                                                                ational Mortgage Company              in ‘being the lender that always says yes’       NMC actively reviews its processing
     products. Innovation is the name of the            Another reason that NMC scored the                                                                 (NMC) has taken the crown for         that they become hesitant to let a broker    procedure to eliminate redundancies and
     game, with savvy clients wanting more         number-one spot in the product range                                                                    best approval and turnaround          know when they cannot do a deal, which       unnecessary delays and make sure that it
     than just their mum and dad’s mortgage.       category was because they have been             “If we believe in a                             times for the second year running. This       costs the broker both time and money…        keeps ahead of the game when it comes to
          National Mortgage Company (NMC)          willing to tailor packages specifically for                                                     accolade means a great deal to chief          and potentially the client.                  turnaround times.
     has several products that distances it        individual brokerage companies so that           brokerage company                              executive Steve Dover, who says this is the       “If we say ‘no’, they know that we’ve        “We don’t sit on our laurels but
     enough from the competition to be voted       each one can serve its unique clients in a                                                      differentiator that most allows non-bank      done everything we can but we let them       we’re always trying to perfect the speed
     by brokers as the non-bank lender with        unique way. Not only do they arrange the         and we like their                              lenders to compete against the bigger         know quickly so they can go back and get     at which we’re processing our loans,”
     the best product range. These include an      specialised products but they also arrange                                                      traditional lending institutions.             on with their lives,” Dover says. “I think   Dover says.
     equity finance mortgage, high-LVR low-        the funding.                                     business model,                                    “The only way that we exist in the        that’s why we’re respected when we talk          That includes stopping the process
     doc loans and a unique product called the          “If we believe in a brokerage company                                                      marketplace today is by creating solutions    about our turnaround times.”                 a couple of times throughout the day
     cash flow equaliser.                          and we like their business model, we’ll          we’ll create specific                          and getting them done quickly,” Dover             Dover says that approval and             to look at any applications that can be
          “We’ve launched that to a few            create specific funding packages for them,                                                      says. “If we can’t do the job, we tell the    turnaround times are the most important      approved at that time and to put them
     introducers, and it’s starting to get a bit   and will continue to do so,” Dover says.         funding packages                               brokers quickly. A lot of other mortgage      category that his company focuses on         through. NMC’s speed of service is one
     of traction – about $10m a month,” chief      “The reason we can do that is because                                                           management companies think that if they       because it, unlike many other things,        reason why they seem to be so popular
     executive Steve Dover says. “It’s basically   we’ve got $1.6bn under management.”              for them”                                      say no to a broker on a deal then they        is completely under the company’s            with the brokers.

82                                                                                                                                                                                                         83

     Winner:                                                                                                                                                       N
     Broker support and IT                                                                                                                                                  ational Mortgage Company
                                                                                                                                                                            (NMC) chief executive Steve
                                                                                                                                                                            Dover prides himself on his
                                                                                                                                                                   company’s support to the broker network.
                                                                                                                                                                   In order to maintain good service and
                                                                                                                                                                   support, NMC vets the brokers it does
     National Mortgage Company                                                                                                                                     business with to make sure they have a
                                                                                                                                                                   sound business model and will provide
                                                                                                                                                                   good service to the customer.
                                                                                                                                                                        “We’ve spent a lot of time, money,
                                                                                                                                                                   effort and technology getting our back
                                                                                                                                                                   end right; that’s why the front end of our
                                                                                                                                                                   website looks pretty ordinary,” he says.
                                                                                                                                                                   “To be honest, we don’t accept everyone
                                                                                                                                                                   as brokers or introducers for NMC – we’re
                                                                                                                                                                   quite particular about who we accredit.
                                                                                                                                                                   We want to know what their business
                                                                                                                                                                   model is and what the company’s like and
                                                                                                                                                                   we like to go out and train them and really
                                                                                                                                                                   get to know that business.”
                                                                                                                                                                        Dover says that NMC strives to be
                                                                                                                                                                   a leader in IT solutions and that the
                                                                                                                                                                   company plans to become completely
                                                                                                                                                                   paperless by the end of March. Brokers
                                                                                                                                                                   will be able to use NMC’s systems to
                                                                                                                                                                   submit and track deals. He says that the
                                                                                                                                                                   only way a non-bank lender like NMC
                                                                                                                                                                   can survive against big banks is by
                                                                                                                                                                   delivering solutions.
                                                                                                                                                                        “The emphasis on NMC to be the
                                                                                                                                                                   best in creating solutions really came
                                                                                                                                                                   from the fact that when I first started the
                                                                                                                                                                   business I started it as a broker,” Dover
         HIgHLy recommended:                                                                                                                                       says. “I was absolutely messed around by
                                                                                                                                                                   the banks I was introducing business to,
         Homeloans Ltd
                                                                                                                                                                   and I couldn’t stand it anymore. I thought
         Bluestone Mortgages
         Australian First Mortgage
                                                                                                                                                                   if I can’t stand it there must be plenty of
                                                                                                                                                                   others who can’t stand it also.”
                                                                                                                                                                        Dover describes the recent spike
                                                                                                                                                                   in business being sent NMC’s way by
                                                                                                                                                                   brokers as ‘a flight to quality’ as brokers
       What are the prime                                                      What would encourage you to sell
       motivations behind                                                      more non-bank products?                                                             and borrowers seek to find security in
                                                                                                                             Commission: 2%
       putting business through                                                                                                                                    the wake of the market turbulence. This
       non-bank lenders?                    Other: 5%                                                 NA (don’t need any more                                      comes from the close relationship NMC
                                                                                                       encouragement): 11%
                                                                                                                                                                   has with its brokers and its investment to
                                                                                                                                                                   make its computer systems cutting edge.
                                                                                                                                                                        Homeloans Ltd was highly
                                                                                                                                                                   commended in this category, and
                                                                                                                                                                                                                 “To be honest, we don’t accept
                                              Flexibility:           36%                                                        Service (also        Pricing       managing director Brian Jones says that
                                                 15%                                                                             support):      (interest rates,
                                                                                                                                   21%             fees): 49%      in the past decade there has been a huge

                                            Price: 8%
                                                                                                                                                                   emphasis on technology and the non-
                                                                                                                                                                   bank will certainly continue to develop its
                                                                                                                                                                                                                  everyone as brokers or
                                                                  needs or
                                                                                                                                                                        “It has become apparent that
                                                                                                                                                                                                                  introducers for NMC – we’re
                                                      20%       preferences:
                                                                    14%                           Products (including pro packs and
                                                                                                     other lines of credit): 17%
                                                                                                                                                                   salespeople are dealing with a wealth of
                                                                                                                                                                   information from all different sources,
                                                                                                                                                                                                                  quite particular about who
                                                                                                                                                                   so a good IT system is very important to
                                                                                                                                                                   them,” Jones says.
                                                                                                                                                                                                                  we accredit”
84                                                                                                                                                                                     85

                                                                                                                                                                                            hen it comes down to it, there

                                                                                                                                                     Customer support
                                                                                                                                                                                            is one party that everybody
                                                                                                                                                                                            in the mortgage industry is
                                                                                                                                                                                 in the business for: the customers. The
                                                                                                                                                                                 brokers polled selected National Mortgage
                                                                                                                                                                                 Company (NMC) as the best in the non-
                                                                                                                                                                                 bank lending business when it comes to

                                                                                                                                                     National Mortgage Company   providing customer support.
                                                                                                                                                                                      This completes a clean sweep for
                                                                                                                                                                                 NMC, after taking this new category
                                                                                                                                                                                 of customer support, something that no
                                                                                                                                                                                 doubt pleased chief executive Steve Dover.
                                                                                                                                                                                 NMC’s commitment to customers was
                                                                                                                                                     HIgHLy recommended:         demonstrated when low-doc rates went up
                                                                                                                                                                                 around the country.
                                                                                                                                                     Bluestone Mortgages
                                                                                                                                                                                      “When the low-doc rates went up
                                                                                                                                                     Homeloans Ltd
                                                                                                                                                     Heritage Building Society
                                                                                                                                                                                 across the board we phoned every one of
                                                                                                                                                                                 our customers – it was a mammoth task –
                                                                                                                                                                                 and we told them we have other initiatives

                                                                                                                                                                                 to get your rates lowered and these are your

     BDM support                                                                                                                                                                 options,” he says. “We spoke to thousands
                                                                                                                                                                                 of customers.”
                                                                                                                                                                                      Having a single point of contact, an
                                                                                                                                                                                 honest approach and good communication
                                                                                                                                                                                 is the cornerstone of NMC’s customer-
                                                                                                                                                                                 centred strategy. Dover says that customers
     National Mortgage Company                                                                                                                                                   appreciate being kept in the loop whether
                                                                                                                                                                                 there is good news or bad.
                                                                                                                                                                                      “We’re not afraid to phone customers
                                                                                                                                                                                 when we have bad news like a rate increase.
                                                                                                                                                                                 We’re not the good news company, but

             usiness development managers          Dover says that makes them ‘on-the-road                                                                                       when we do have bad news we always come
             help brokers better understand the    credit people’, not BDMs. He says that            HIgHLy recommended:                                                         with options,” he says. “I know why most
             products that they are offering to    is the key to providing good support and          Homeloans Ltd                                                               companies can’t do it – you need people on
     clients. The importance of working with       helps NMC be proactive with its brokers.          Bluestone Mortgages                                                         the phones, you have to write letters, you
                                                                                                     Heritage Building Society
     a good BDM cannot be overestimated,                “What happens from that perspective                                                                                      have to follow up, and it’s costly.”
     with many brokers saying that they would      is that we can pick up any training issues                                                                                         Dover says that NMC has a very low
     follow a trustworthy BDM to a different       that might crop up,” he says. “If they see the                                                                                runoff on its loan book because of the
     lender rather than lose that relationship.    same kind of things coming in from their              Listed non-bank Homeloans Ltd, highly                                   relationship it has with the customers. He
         Despite topping the poll for BDM          broker, they can set up a training session for   commended in this category, says that when                                   says that he receives letters and phone calls
     support, National Mortgage Company            whatever keeps tripping up their deals.”         it comes to finding a good BDM, it places a                                  from happy customers who are surprised
     (NMC) does not have BDMs in the                    He says the set-up fosters stronger         strong emphasis on character.                                                with the contact they receive, having
     traditional sense. According to chief         relationships between the brokers and his             “It’s important that BDMs have a                                        previously been with a bank for so long
     executive Steve Dover, NMC instead has        staff. He finds that brokers are happy that      cultural fit with Homeloans and can be                                       and never having any type of personal
     mobile credit teams that are able to go       they are not “out there fighting the battle      integrated into the team,” says managing                                     correspondence.
     further to help the broker. The decision to   on their own”.                                   director Brian Jones. “Should they require                                        Anticipating a rate rise from the RBA,
     replace the traditional BDM with account           NMC has actually gone into brokers’         skills training, we can work on that;                                        NMC contacted all of its customers to give
     and relationship managers who have            offices and put deals together for them,         however, if they’re not the right character                                  them a chance to lock in rates and got a
     credit experience was made a couple of        Dover says. While it is not something            or fit, they won’t be an effective BDM.”                                     34% uptake from them. Although these
     years ago and NMC has not looked back.        the company wants to do on a regular                  He adds: “Sales skills and administrative                               tactics are expensive, Dover says it is a
         “Unlike a broker who goes to a bank       basis for the same person, they have even        ability is also key – they need to want to be                                matter of balancing what is too expensive
     to speak to their BDM, who doesn’t really     written loans for them when they are             out there on the front line dealing with our                                 with what is just bad service.
     know where the deal is anyway, we have        caught short due to an unanticipated             customers, not pushed.”                                                           He is confident that the business
     what we call our account managers, most       spike in business.                                    Jones says Homeloans Ltd has put                                        model NMC has in place and the strong
     of whom are credit trained,” Dover says.           “That’s something a bank can’t do,”         considerable effort into recruiting a solid                                  relationships that the company has with
         NMC’s credit teams have their             he says. “Broker solutions are paramount         team: “With a good sales manager –                                           both customers and brokers alike will allow
     own non-recourse delegated lending            for us because we know that’s where our          which we have in Troy Phillips (GM for                                       it to further increase its business and its
     authorities, which can go up to $2m.          bread’s buttered.”                               sales) – we’re able to motivate and inspire.”                                widespread popularity. MpA

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