Fortunately for New Zealand the regulations were tightened up recently for mortgage brokers to ensure that all brokers are fully qualified and registered. Registration also means that brokers need to be party to a formal dispute resolution process and they also need to behave ethically at all times. This definitely was not always the case.
Prior to 2011 before the regulations reporting the mortgage broking sector had a lot of Cowboys who were chasing quick money. Up until 2008 it was a property boom that seemed never ending, and a large number of mum and dad investors got involved in purchasing investment property for rental, and they needed a mortgage broker to help them get their loans.
If these amateur investors were purchasing property for development, such as infill subdivision, then the financing might have required second tier lenders because it would have looked unattractive to normal banks. Find out more infromation at www.NZMortgageBrokers.org. In this environment the cowboy mortgage brokers flourished, as they made absolutely certain that their clients applications went through unopposed by the bank or a second tier lender. They were prepared to exaggerate the truth and to even tell lies in order to make the clients successful in their application, and while they got away with it in most cases, everything came to a shuddering halt in the 2008 financial crisis.
During the crisis all banks and financial houses found themselves holding mortgages that were upside down because of the very steep drop in property prices, and they found themselves with borrowers unable to make the mortgage repayments. The mortgages were upside down simply because the property was initially valued excessively high and the broker was able to obtain a high LVR mortgage for their client. They almost certainly exaggerated their clients ability to repay the loan and exaggerated their clients net equity. This all became horribly exposed to the banks after the 2008 financial crisis.
When the bands went through the mortgage applications some of the things that the mortgage brokers had done were laughably unethical. Banks found that the broker had exaggerated their clients income or even their security of employment, and had exaggerated the value of the property and the ease of sale of the property in the local market.
When it all came crashing down and 2008 the banks were forced to offer the properties up for mortgagee sale, and this caused a further drop in property prices which further exacerbated the massive problem the banks had. The cowboy mortgage brokers have a lot to answer for during the 2008 crisis.
The main role of the mortgage broker is to negotiate between borrowers and lenders during the purchase of a property, and to find for the borrower the best deal on the market and then to help complete all the paperwork so that the deal actually happens.
While this seems a fairly simple and straight forward role, there is a very large difference between an average mortgage broker and a good one. They almost always only get paid once the deal has gone through and alone has been handed over to the customers so they can purchase their new house or property, and in this environment mortgage brokers need to be looking for clients that are most likely to be successful in their hunt for a mortgage.
Average Wellington mortgage brokers will be looking for clients that obviously are going to be successful, but the corollary is that they will reject any potential client where they are uncertain that they will be successful or not. In other words the average mortgage broker will be cherry picking the good clients and ignoring everyone else.
A good mortgage broker will be much more open minded, and they will be repaired to spend a bit more time to confirm without their potential client will be able to qualify for a mortgage or not. These brokers we’ll have a lot of experience that they can pass on to their clients, and may be able to suggest concrete steps the clients can take in their employment or in their finances that will optimise their chances for a successful mortgage application. These brokers will go a lot further with a client before they eventually give up, and they can do this because they are simply more efficient and effective in the way they operate. They will know how to talk to a client and deal with them in such a way as to get all the truth unnecessary details, plus they will have tricks up their sleeve that they know will work for certain Banks in terms of how the client should be presented for the loan application.
The end result is that these good mortgage brokers in Wellington city will have a lot more success then average mortgage brokers simply because they try harder with all clients, and because they have a lot more experience and knowledge on how to advise clients in order to maximize their charge your success.
The Internet is a vital component of today’s business world, and this is definitely the case for mortgage brokers. While every mortgage broker will use the Internet to research and communicate with their clients and with the banks and other lenders, for a small number of large mortgage brokering companies the Internet is also vital as a source of brand new business.
These large companies have invested heavily in their website and in SEO in order to make certain that they are ranked in the top 3 for any Google search for mortgage brokers in Manawatu, and their investment will in every case be paying off handsomely. The simple reason for this is that the volume of new business that is arriving over the Internet is steadily increasing, and is currently over 9000 genuine Internet searches per month, and these few but large mortgage broking companies are grabbing around 90 to 95% of the total business.
While the more traditional brokers are using the classic marketing techniques like repeat business, referrals and good networking with real estate agents, developers and banks, and there is a very large volume of the market that are not personally connected with anyone that can recommend a good broker. This market is also very comfortable with searching for everything they need on the Internet, and hence they are very willing to trust the Internet to deliver them a good answer in their search for a mortgage broker. This is a massive trend that will continue to grow exponentially, and the large companies that have positioned themselves very high in the search rankings are just simply dominating this entire market.
The modern customer is not only happy to search online for their chosen mortgage broker, but they are also happy to deal entirely over the Internet with their broker during the whole process of getting a mortgage, and this can even include having an initial Skype video call so that the broker and the client can get to know each other. The Internet for these companies is absolutely vital to their business, and the amount of money that they have invested in their websites and in the Internet rankings is a testament to this.
They are however exposed to some disruption, because Internet rankings can be disrupted buy a company that specialises in very high tech SEO. In many respects search is the new brand value, and if such an SEO specialist company was to appear at number 1 or 2 in most searches, then that would be seen by the customers who are searching as an indication of their credibility and popularity. This is indeed the way that customers view searches today, as a small handful of mortgage broking companies in the top 3 search spots appear very infrequently if ever and mass market advertising and other high profile branding. A high-tech SEO country with a good quality home page will be able to tap into and disrupt this traffic, and with smart downstream processes will be able to generate good quality leads that they can easily sell for a good price to the bulk of mortgage brokers Gisborne that are stranded on page 2 and beyond.