Broker Made Us Sign Agreement That She Gets $3k if We Change Bank within 3 Years

Lfunkybits on 11/03/2023 - 13:27
Last edited 11/03/2023 - 14:27 by 1 other user

Hey all,

After filling out paperwork etc as part of the full process with our broker 18 months back I stupidly said we might be selling in a few years and this triggered her demanding we sign an agreement that she gets a $3k payment if we cancel our mortgage within 3 years.

We now find ourselves on a crap rate of 6.19% ($230k investment loan P&I) and looks like if we move we could achieve sub 5%.

My feelings are it was unethical to bring that $3k agreement in midway into dealing with her and she can try and sue me for the $3k if we move banks.

Interested to hear others views on if this is normal practice etc and enforceable.

Cheers

Financial Home Loan Loan

Comments

    • funkybits on 11/03/2023 - 23:09

      I.never intended to switch banks, just didnt know what the future holds re investment and who the hell does have a crystal ball. As it turns out not selling anyway. Would seem.she locked us into a crap deal with Bank SA on a rack rate

      • SydStrand on 12/03/2023 - 10:28
        +3

        Sooooo, no research on your part, no shopping around, and no due diligence. The broker adds a breakaway clause to ensure she gets paid, you willingly signed it, and now you're whinging 3 years later and think it's reasonable to threaten review bombs?

        • AngoraFish on 12/03/2023 - 10:53
          +2

          Brokers are meant to take care of all that. That's literally the entire point of their existence.

          If OP has to do research and shopping around then he should just be financing direct… but yeah, brokers are crap and he should just be using a comparison site and financing direct, as this instance amply demonstrates.

          • SydStrand on 12/03/2023 - 14:49

            @AngoraFish: I'm not an advocate for brokers, and never used one. But if an advertised, off-the-shelf rate is better than what the OP got from a broker, they goofed.

      • illusion99 on 12/03/2023 - 20:39

        Can’t you use the same broker to refinance to another bank? Most brokers are happy to refinance because they lose out one commission from the original loan but they get commission on the refinance so same same.

  • meowsers on 11/03/2023 - 18:03
    +2

    I would just let them chase you for it as you said. If it comes to that.

    Bury them in complaints via ASIC / AFCA / Fair Trading if they come after you. They wont want to lose their banking broker accreditation so complain to your (former bank)

    This will get plenty of downvotes but tbh the game is the game.

    You don't "have" to pay her anything until a judge says you do. And that would be a long way away in any case.

    • trapper on 13/03/2023 - 10:12

      OP should have walked out instead of signing that.

      But yeah, there is no way I would pay this until a judge ordered it.

  • bloom on 11/03/2023 - 18:24
    +7

    Just tell the broker you want to refinance
    Most banks claw back is 18-24 months
    As long as the same broker organises your refinance they won’t be out of pocket

  • altomic on 11/03/2023 - 20:57
    +3

    Broker Made Us Sign Agreement That She Gets $3k if We Change Bank within 3 Years

    but you signed it.

    that's on you buddy,

    • funkybits on 11/03/2023 - 23:04
      -7

      Its only on me buddy if it was legal and enforeable

      • tomleonhart on 12/03/2023 - 01:18
        +7

        I’m pretty sure it’s enforceable if you signed the agreement which says you’ll have to pay for her service one way or another.

      • GrueHunter on 12/03/2023 - 10:28
        +2

        so some sort of "contract", you mean

    • exxonsign on 13/03/2023 - 12:44

      To me, the parties aren't on equal footing here when it comes to the laws around broker obligations, and it is not unreasonable for the consumer to rely on the broker's knowledge of the rules in this specialist area. A little like when most people are speaking to their dentist or mechanic - it is common ground between the parties that the consumer is paying the specialist because of their specialised knowledge. For the specialist to then take advantage of that knowledge gap for their own financial benefit is wrong.

      @altomic, @tomleonhart, @GrueHunter - respectfully, you are probably quite wrong on this. If the post-Royal Commission rules apply to this transaction, then it may well be unlawful. Putting a clause like this into a contract when it was unenforceable would be particularly problematic in a situation where you have an advantage over the other party in terms of knowledge of the particular laws or rules that apply.

  • Some Human on 11/03/2023 - 23:43
    +6

    It's called a clawback. I had to pay my broker 1k when the ex and I split and I had to refinance the house in my name only. The broker loses part of their commission when you bail out of the loan, so they're making sure their work doesn't go unpaid.
    My broker was transparent about it from the beginning. I actually thought it was 2k, but they only charged me 1k.
    I will never use a broker again though.

    • footyboy on 12/03/2023 - 11:30
      +2

      This is not enforceable now, you should again consider brokers if thats the reason holding you back.

      Aidan.

      • Some Human on 12/03/2023 - 12:18
        +1

        I just don't think they were worth the effort. Easier to go directly to the bank. I'm not financially unstable and don't desire borrowing more than I can afford, so for me personally I don't believe they are worth it.

        • footyboy on 12/03/2023 - 17:32
          +3

          Fair enough. Here's another angle that you could get with a broker vs going direct;

          • better than advertised rates
          • fee waivers
          • free, up front valuations
          • affordability test, prior to credit check
          • deals you won't find in the comparison websites

          Aidan.

    • FlyingMiffy on 12/03/2023 - 23:35

      Yeap broker just charging him for lost commission.

  • thestig on 12/03/2023 - 07:36
    +1

    So you don't think it's reasonable to pay for the brokers time? They get paid with the commission from the bank, if you leave early and that's taken away from them then it's reasonable that you pay for their time.

    • footyboy on 12/03/2023 - 17:33
      +3

      We get paid a decent amount from the banks.

      For a simple transaction, this ball and chain method makes other brokers look bad.

      Aidan.

  • Geoffreys on 12/03/2023 - 07:43
    -1

    Brokers are the equivalent of used car salesmen. I’d question the enforceability of this contract. You could quite easily drag any attempt to recover it out to cost them far more in legal fees.

    I’d just refinance and see if they notice. And if they do refuse to pay, threaten to lodge complaints to a variety of govt departments, make them persue you through court etc

    • SydStrand on 12/03/2023 - 10:34
      +2

      What shit advice this thread is giving. You forget that it will also cost the OP to defend themselves. Secondly, 'lodge complaints to govt departments?' what department, exactly? The department of butthurt home home loan holders? The broker didn't do anything illegal and disclosed this information to the OP. About as delusional as getting Tracy Grimshaw on the case.

      • exxonsign on 13/03/2023 - 12:09

        Wow Syd. That is a bit of an ordinary response. If the clawback clawback is unenforceable (as it may well be under the law post-Royal Commission) then it's likely the broker did do something "illegal".

        Let's use a hypothetical scenario:
        1. Section 1 of the SydStrand Law says "no contract is allowed to require ozBargain posters to look up the meaning of Dunning-Kruger effect".
        2. You and I sign a contract requiring you to look up the meaning of Dunning-Kruger effect if you post on ozBargain.
        3. I had disclosed this information to you prior to you signing the contract.

        In this scenario, is the contract enforceable? My view would be that it is not, because the law does not allow for such contracts. Even if we both wanted it to be enforceable, that would not make it so.

        Let's go a step further and say that:
        4. When we signed the contract, I worked in the business of charging consumers a fee to assist them with their complicated affairs under the SydStrand Law.

        It would be reasonable to expect me to be familiar with the requirements and obligations under that law, whereas my customers may not have the same level of familiarity with those requirements and obligations as I do.

        In this second scenario, if I was aware that section 1 made my Dunning-Kruger clause unenforceable, but I inserted it in our contract anyway to see if I could get away with it, would that be fair/reasonable/lawful conduct?

        How about if:
        5. I subsequently tried to use the threat of enforcing my Dunning-Kruger clause to compel you to sign another contract with me.
        Would that be fair/reasonable/lawful conduct?

        I understand OP has not alleged any threats of enforcement, but to me, it doesn't seem too much of a leap for it to happen - OP calls broker to ask about the clause, and broker says "don't worry about the clawback you owe me - if you refinance through me, we'll call it quits".

        • SydStrand on 14/03/2023 - 23:35

          That's a lot of words that add nothing of value to this conversation. Gold star! Keep up the quality posts!

  • bigsaver on 12/03/2023 - 08:22

    Who are you with now? Call your bank and they will most likely reduce your rate.. otherwise switch to another lender, plenty of cashback deals at the moment

  • Sinnerator on 12/03/2023 - 08:55

    When there's money involved the person sitting in the chair across from you is not 'really' your friend.

  • backpaqer on 12/03/2023 - 09:11

    Broker fees are subject to tight government restrictions and exit fees were high on their target list. Speak to an ombudsman about it. Get something official before cutting loose. Pretty sure that $3k exit fee is illegal under the current regulations.

  • backpaqer on 12/03/2023 - 09:15

    Just to add to my previous comment. You might have entered into a loan agreement with a lender (facilitated by the broker) and also additionally into a contract with the broker (which is weird) just be sure if there is a contract specifically with the broker and if there is, you'll probably need a lawyer to review it to understand the conditions under which the contract is considered delivered or if it could be considered unconscionable. You won't get the answer here.

  • Tranquiliser on 12/03/2023 - 10:26

    Did you get cashback from your broker? Broker's upfront commission is subject to clawback by banks if a loan is refinanced to another bank within 2 years. I guess she gives you a share of her upfront commission and requires you to compensate her loss for early loan discharge.

  • richrichie on 12/03/2023 - 10:45

    2 years is quite common, as that's when the broker might get their commissions clawed back like mentioned by others. Never heard of 3 years before.

    Having said that, with your investment loan size of $230K, you will find it difficult to convince banks to give you sub 5% rate. Unless your LVR is extremely low?

  • footyboy on 12/03/2023 - 11:36
    +13

    Broker here to clear this one up.

    Yes, previously brokers could so this unfortunately.

    From 2020 this is now banned.

    Brokers cannot enforce the passing on a clawback to a client, nor can they structure an agreement such as this in the post.

    Further reading - https://www.theadviser.com.au/compliance/40822-final-clawbac…

    Aidan.

    • El-Rhi on 12/03/2023 - 12:10
      +1

      So OP signed this 18 months ago (say September 2021), so did the broker do something illegal?

      • footyboy on 12/03/2023 - 17:16
        +3

        Possibly, but my specialitiy is getting loans approved, not the law.

        Aidan.

  • cktftw on 12/03/2023 - 11:42

    Don't sign. Simples

  • Blackadda on 12/03/2023 - 12:12

    if its not an illegal agreement, have the broker get you a better deal they don't care they'll get paid for the switch

  • steve289 on 12/03/2023 - 12:22

    if the loan is discharged within 3 years, the broker will loose a large amount of their commission.
    Friends got burnt with this a few years back, negotiated to pay 50% of the fee, and were still better off.

    Yes it sucks, but keep in mind the work that he broker did for you, they do need to be paid for their time.

    • helpme on 12/03/2023 - 13:40

      Is finding a bank worth 3k?

      • Alley Cat on 12/03/2023 - 14:48

        It really does, to the right person. It took me a minute to turn off background app refresh on someone's phone, before she heads off to buy a new one because her phone only lasts a few hours on a full charge. (It turned out to be Uber that was draining both the battery and data.) How much is a new iPhone? She is in her late 60s, needs big screen and on the Apple ecosystem, so the obvious choice is the current flagship Max version, that would easily go over 1k.

        People are stressed out by different things, that's why these services exist, and thankfully so. You can call it a lazy tax, but the overwhelm is real in the person experiencing it.

  • tessel on 12/03/2023 - 12:51
    +3

    I love how society now always blames others. It's great we no longer have to take responsibility for our actions. End sarcasm. Thankfully most ozbargainers haven't fallen victim to this woke way of thinking. Reddit is overrun with sheep who would say how dare the broker make the OP sign such a document.

    • gyrex on 12/03/2023 - 12:58
      +1

      Spot on. I wanted to say something similar to this but ultimately didn't have the balls. This utter breakdown of personal responsibility is a scourge on society and we've now got generations of supposed adults who think and act like petulant children. I can't wait for the pendulum to swing back the other direction.

  • mboy on 12/03/2023 - 13:29
    +1

    I'm curious (and no implications to you OP, I'm just using this thread to ask) but is there any reason, apart from minor time-saving, to use a mortgage broker?

    • Hangryuman on 12/03/2023 - 14:20

      there were many stories about mortgage brokers faking your income figures so you could get a bigger loan, so they could get a bigger commission.

      • Ulysses31 on 12/03/2023 - 17:28

        Depending on the period, there were all sorts of ways to "cook the books".

        I used a dude who knew all about it, and I got my foot in the door. Went from unable to get a mortgage to having $230k tax free (sold house) in my bank 10 years later. Which bankrolled the next project, and I used a normal mainstream broker.

        Endless different situations people can find themselves in. But we all need to accept our own responsibilities.

    • serpserpserp on 12/03/2023 - 15:20
      +1

      Can be a major time saving for those fringe borrowers that are self employed or contract workers that refuse to get organized enough or put in some ground work to prove their credit worthiness to a lender.

    • jzdhgkd on 12/03/2023 - 22:52

      As serpserpserp said above I'm a contractor who needed to use a broker to get a home loan.

      I had only started my company for 1 year before deciding to apply for a home loan and from what I could gather banks won't accept an application until your company has existed for at least 2 years. This rule is fair enough considering the banks need to protect themselves but I wanted to get in before house prices increased so the broker got me a loan that I could not get myself.

      Probably wouldn't use them normally but definitely helped in my case! (especially as the housing market continued to heat up after I bought the house)

  • Hangryuman on 12/03/2023 - 14:18
    +1

    chances are the bank doesn't know about your signed agreement to pay the broker

    suggest tell the bank that you can get a better rate elsewhere, and ask them for a better rate

    then spend the rest of the 3 years reminding yourself to not sign contracts without thinking about what they could mean

  • echelon6 on 12/03/2023 - 15:04

    hah noob

  • serpserpserp on 12/03/2023 - 15:17
    +1

    Seriously who let's brokers dictate terms? They work for you.

  • ass3ts on 12/03/2023 - 16:27
    -1

    Brokers…vultures

    • Ulysses31 on 12/03/2023 - 17:23
      +2

      Don't need them? Don't use them.

      They can be of great help to those with little/no options. Or find the whole thing daunting, keep putting it off etc.

      • AngoraFish on 12/03/2023 - 18:37
        -1

        If by "great help" you mean the kind of assistance that OP received then you and I speak different versions of English.

        • Ulysses31 on 16/03/2023 - 10:51
          -2

          1 bad experience, where they foolishly signed something they shouldn't have. So all brokers are vultures? Hope you're not racist, too.

    • footyboy on 12/03/2023 - 17:28
      +3

      Theres 18,000+ brokers in Aus. Don't tar us all with the same brush please.

      Aidan.

      • imurgod on 13/03/2023 - 09:15

        This is accurate. We use a fantastic broker for our business and personal stuff and they're freaking amazing.

        I have used both very poor and very good brokers…. there's a massive difference.

        • AngoraFish on 13/03/2023 - 14:16
          +2

          The problem is that the industry likes to run with the fiction that all brokers are fantastic unless you get a crap one, then it's suddenly #NotAllBrokers.

          In fact, many if not most brokers are not fantastic as we know both anecdotally and from the Banking Royal Commission, and further, the industry as a whole, including peak bodies funded in part by 'fantastic' brokers, has been very effective in gutting Commission recommendations against conflicted remuneration.

          The fact that even your experience has included very poor brokers shows how very easy it is to find them. Seriously, if it's that easy to be hooked up with a crap broker then the industry needs to be doing a hella lot more weeding.

          • imurgod on 13/03/2023 - 14:23
            +1

            @AngoraFish: I agree there. Gosh so many industries need that kind of weeding!

            I suppose every industry has good and bad.

            You should see what we went through with accounting firms!!

          • jorf on 13/03/2023 - 16:48
            +2

            @AngoraFish: Yep. We've used three different brokers.

            One turned on us when we said there was a possibility we weren't going to go ahead (so he lost our business anyway).
            One told us a bunch of crap that ended up delaying settlement and with us having to lay down extra security because it was easier to just lie to us rather than actually negotiate with the bank - I ended up having to do it myself.
            One seemed ok, but when I asked him to try and get a better rate a couple of years in, he said he couldn't do any better. So when I refinanced directly with the bank because they had a better rate, he got all pissy with us for "not letting him do it for us" (ie. got pissy because he lost his trail for doing nothing).

            I'm sure there are good brokers out there, but our 0/3 experience says they're few and far between.

  • Daddy Chill on 12/03/2023 - 17:08
    +1

    I put bankers in the same category as real estate agents, car salesmen and solicitors all useless scum

  • cnrmlj on 12/03/2023 - 17:20

    LOL. "Made us". If you don't like the terms, change to another broker or even better, go direct.

    You aren't Lando Calrissian and your broker isn't Darth Vader.

  • Ulysses31 on 12/03/2023 - 17:22

    My broker sorted a few loans over 5 or so years. Super friendly, slick & helpful dude. Helped me with complicated situations.

    I felt comfortable asking about claw-backs, and how all that works. He sounded defeated, but I assured him I was asking with transparent intentions. He said that if we refinance within 2 years, he pretty-much gets zero. Said it can be complicated, and they don't immediately know.

    I reassured him that I just wanted to hear it from the horses mouth. And that I'd stay with the loans 2-3 years.

  • Eeples on 12/03/2023 - 17:33

    I think you should talk to your broker. I understand that the broker can only receive clawbacks from lenders for 2 years since 1 Jan 2021.

    If this is correct most likely the broker would let you out of the agreement. Or, the agreement could be illegal depending on its wording.

    • footyboy on 12/03/2023 - 17:36
      +2

      Zero years. Brokers cannot pass on clawbacks.

      At all.

      Aidan.

      • Eeples on 12/03/2023 - 17:37

        I meant receive payment from the lenders. (I called that clawback, perhaps that is the incorrect term).

        • footyboy on 12/03/2023 - 17:43
          +2

          Yep, absolutely.

          Under 1 year - 100% income clawback.

          Over 1 year but under 2 year - 50% clawback.

          Aidan.

  • footyboy on 12/03/2023 - 17:35
    +2

    @funkybits - here's my offer to you. I'll go in to bat for you (for free) and I'm very confident I can get you a better rate with your current lender.

    Aidan.

  • Retchey on 12/03/2023 - 18:04

    Apparently the bank can recall the brokers commission if you leave early or within a time frame defined by the bank / lender.
    After reading some posts here , it's called clawback.

  • matt-ozb on 12/03/2023 - 18:11

    These brokers dont sound much better that the real estate agents getting $10-20K for putting an advertisement on realestate.com.au and showing a few people through the front door.

  • Senatekill on 12/03/2023 - 18:21

    under current rules she cant - for $3k she will not follow it up as you can threaten to make a complaint to her aggregation and th complaints body AFCA….do whats best for you its up to the broker to retain yoiu.

  • gstfree on 12/03/2023 - 18:33

    If my broker mess me up I will terminate all dealings immediately. Find another one or go to loans.com.au. It is unusual for this kind of payback agreement.

  • victorheaven on 12/03/2023 - 19:22
    +1

    One of the reasons why using brokers sucks, especially for people with simple PAYG incomes and basic knowledge of mortgage market.

    Cut the middle man if you can, chances are you can negotiate better deals down the track as the banks are not paying commissions on your loan.

    • tomleonhart on 12/03/2023 - 20:58
      +2

      Cut the middle man if you can, chances are you can negotiate better deals down the track as the banks are not paying commissions on your loan.

      Think about this for a second. A bank hires a mortgage advisor as their employee on a salary basis + bonus for loans they write. That means the bank are out of money regardless of how many loan their employee writes. A standard mortgage advisor starts at 70-80k/year meaning the bank are out of pocket 5800 - 6600 per employee per month even if that employee write 0 loan that month.

      The broker on the other hands earns 0 from the bank if they write 0 loan.So any business the broker brings to the bank is 100% guarantee without having to pay them a salary.

      It is cheaper and more efficient for the bank to use a broker even having to pay their commission (which is around 0.65-0.7%). If the banks really think the broker channel isn't beneficial to them from a cost perspective, they wouldn't have had one open. There's a reason why the big banks all have a broker channel on top of their own employee. It is naive to think you'll score a better deal because bank aren't paying the broker commission, they still have to pay for an employee to deal with you. With a broker, they don't have to.

      • Edobear on 13/03/2023 - 13:54

        This. If the broker channel was as bad as you say @victorheaven, then why is over 60% of all loans written now through brokers? We write loans every day and sometimes our relationship with a bank BDM is good enough to get extra discounts on top of the standard discount. Also what about banks you may not have even heard of before? How do you negotiate with a bank you don't even know.

        Having a little knowledge is good, but can be more detrimental in some circumstances. For example, one point which I always make to first home buyers is that lenders mortgage insurance (LMI) cost differs from bank to bank and the higher the LVR the more this costs. This is fairly common knowledge, however, a part which most people don't know is that there are certain points which the mortgage insurance jumps/reduces significantly. At these break points, even borrowing an additional $500 can increase the LMI by several thousands. On the other side, sometimes I can advise my clients that by putting just an additional couple hundred or thousand dollars into a deposit, they can save themselves several thousands in LMI. One case comes to mind where my client asked me to keep $10,000 aside for white goods. I calculated that if he put an additional $5,000 in deposit, he would save $4,000 in LMI. As you can guess he snap called this and forked up the extra $5,000 as even taking a loan for the white goods would end up cheaper.

        Too many people get caught up by the rate and forget to take into account other things which can cost you more in the long run. And you know, we have not even talked about tax implications with loans yet either which is a whole new ball game.

        As with any profession, you will have good ones, average ones and downright bad ones. It is up to you to discern which is which and if you want to use one. Given that with a mortgage broker, the cost (upfront) is usually $0, and I would argue an average broker still has more knowledge than yourself, I think the choice is pretty straight forward.

  • SydneyMoney on 12/03/2023 - 19:36
    +5

    Legally, the broker is not allowed to do this. Under Best Interest Duty, any loan written after 1st January 2021 does not allow a broker to recover a clawback from a client. Also, after 18 months the most clawback a broker will get is 50% of the commission - so a good broker would help you refinance to a new lender (lose half their commission from current lender, but earn 100% from the new lender for a net 50% earn). Lastly, no lender is legally allowed to charge a clawback beyond 2 years, so it doesnt even make sense why this would be a 3 year agreement.

    Link below with some details about clawbacks from an aggregator (found via google).

    Note to all the OzBargainers out there - dont use this as a licence to waste brokers time - if you know you are going to refinance every couple of months - go direct to the lender and dont waste a brokers time.

    https://www.connective.com.au/news/asset-finance-news/what-t…

  • john_conner on 12/03/2023 - 19:47
    +4

    Just do some research and apply for your own loans.
    If you can provide all the documentation to the broker, then you can fill in an application form online.

    If you think a broker has your best interests at heart, think again. I guarantee they will direct you to the loan which maximises their commissions. If there is a better deal for you which pays them less, what incentive do they have to present it to you?

    Then after 2-3 years they will call you up and churn you to “another great deal” because they can earn more commissions. The whole concept is sus.

    • tomleonhart on 12/03/2023 - 20:48

      If you think a broker has your best interests at heart, think again. I guarantee they will direct you to the loan which maximises their commissions. If there is a better deal for you which pays them less, what incentive do they have to present it to you?

      The incentive is to do a good job so people actually recommend you to other people. contradictory to popular belief, the commission between banks varies by only 0.05% which on a 500k loan is only 250 bucks. Too small to risk any decent broker's integrity.
      Plus any decent broker will negotiate a rate with 4-5 banks at the same time and present all options to their clients on a piece of paper with their product recommendation so their client can see which one is the best and make their decision.
      And brokers are not stupid, they realise clients will want to refinance should the product recommended is not competitive enough, which means the client will want to change bank resulting in a clawback which net their months long effort $0.

  • matt-ozb on 12/03/2023 - 21:00
    +1

    Using the internet and google seems easier than using a broker.

  • Weezle on 12/03/2023 - 21:03
    -2

    Nobody held a gun to your head!

    • Senatekill on 13/03/2023 - 15:40

      the broker was a bikie

  • R4 on 12/03/2023 - 21:39

    You weren't 'made' to sign anything - you chose to.

    Just get a new mortgage and tell her to swivel.

  • exxonsign on 12/03/2023 - 22:24
    +5

    Wow, so much smugness in these posts. And so much legal "expertise". C'mon ozB, you're better than that.

    OP - from what you have mentioned, it is probably unenforceable, but not enough information is provided to form a reliable view.

    The "you signed it, you owe it" horde who piled on the OP in this post are also likely to have been nodding along sanctimoniously with the Royal Commission a few years back as dodgy broker and bank practices were called out. But it would be unsurprising if they are unable to see the irony in that.

    Actually, it would be about as unsurprising to the rest of us as the fact financial services and credit in Australia are regulated by more than just the common law and the "finders keepers, losers weepers" rule.

    • Blitzfx on 13/03/2023 - 00:14
      +2

      The reason you're seeing this is because it's easier to virtue signal and be morality/ethics police than assess the situation in any sort of intelligent capacity. Doing that would require spending more than 1-second of thinking.

  • mrvaluepack on 12/03/2023 - 23:24
    +1

    Lol what kind of shitty broker do you have, all my brokers have just given a "pretty please" dont move statement. But never had a clawback commission from the client in the contract lol.

  • Edobear on 12/03/2023 - 23:41
    +5

    Mortgage Broker here. For loans written after 1st January 2021, a clawback clause is no longer enforceable.
    See NATIONAL CONSUMER CREDIT PROTECTION REGULATIONS 2010 - REG 28VG
    (2) Part (C) "the consumer must not be subject to an obligation to pay an amount as a result of an amount being required to be repaid under the repayment obligation"
    Go refinance if your loan is no longer competitive.
    Best of luck.

    • Mokr on 15/03/2023 - 11:13

      Damn OP write negative reviews on this broker. And ah report them.

  • xavster on 13/03/2023 - 00:30
    +3

    Why hasn't your broker called your bank and negotiated a better rate for you already?

    My broker reviews my loans every 6 months and will text me to let me know after he's negotiated a lower rate with the lender and there's nothing for me to do.

    You have a lazy broker.

    • Mumbles on 13/03/2023 - 03:37

      I think you have it the wrong way around. Most brokers don't do any work after you've signed up to a loan. You're the lucky one with an unusually hard working broker.

      • Ash-Say on 13/03/2023 - 08:50

        My broker is also great. I have been on the fixed rate for last few years and she always follows up at the end of each term to review my rates.

        I recently switched to variable and my bank wont go below 4.94% (only discounted 0.1%). She was able to get me 4.79% with the same lender. Note: this is before last 2 rate hikes.

    • Mokr on 15/03/2023 - 11:14

      most people are just lazy, and dont want to do their own research,

      still with a broker they most likely are getting a 30% better rate, now if they pushed they could get a 60% but humans are lazy, and most are focused on their jobs

  • Mumbles on 13/03/2023 - 03:57
    +1

    To the OP, I don't think its normal. Judging from hundreds of OzBargain comments I don't see one customer saying they were forced to add the same clause. There are a few brokers and friends of brokers saying they would do it too but are they the opinion you want to hear?

    Do your own internet research on broker reviews and see if you can find customer reviews complaining about same clause.

    My guess is your case is very rare and circumstantial.

  • vietbargain on 13/03/2023 - 09:05
    -4

    OP is the worst kind of I'm-entitled-to-everything-free-blame-anyone-but-myself type of customer.

    Brokers spend days/weeks doing heavy lifting to get your loan across the line (getting you the best deal, doing your loan application capture, income/expense verification, settlement) and you're worried about a $3k clawback that your clearly signed?

    She kept her end of the contract by getting you a loan, you should to:

    1. Stay on for 3 years
    2. Repay the clawback

    I feel sorry for the next bank or broker that needs to deal with you.

    • meowsers on 13/03/2023 - 09:34
      -2

      No you shouldn’t. Especially with the changes in legislation outlawing this practice.

      It’s dog eat dog. Eat or get eaten. Especially when it comes to providing for your family.

      You have to be absolutely ruthless in business and financial dealings. There are always winners and losers.

      If the broker wants to enforce this contract everyone is harping on about let her enforce it. I doubt they will. He’s not stealing from her. In my view if it’s a legal transaction then the recourse is the legal system.

      There’s also a bit of a thrill that comes with winning as a consumer. David and Goliath etc. That’s half the fun of it.

      • drfuzzy on 13/03/2023 - 12:46

        Explain how a typical small broker business is Goliath.

        • meowsers on 13/03/2023 - 12:58
          -1

          Bro, anyone who is not you is bigger than you if you aren’t a business.

          I run my personal finances like a corporation. Ruthlessly but legally.

          If I could avoid a 3k hit by making someone chase me for a dodgy fee so be it.

          Every dollar that I keep from leaving my bank account is a win.

    • exxonsign on 13/03/2023 - 11:11
      +2

      This seems like the worst kind of I'm-entitled-to-everything-free-blame-anyone-but-myself type of broker response. If the new NCCP regs apply to this loan (and there is not enough information given to be certain they do), then why would any broker try to add this provision to the deal? Could it be because they:
      (a) are lazy;
      (b) are dishonest;
      (c) are not very smart;
      (d) don't know the law;
      (e) don't care about the law;
      (f) figure they won't get caught; or
      (g) a combination of some/all of the above.

      The OP could start by asking the broker (via email) whether they are comfortable that the purported "clawback clawback" is lawful, and if the answer is yes, to ask the reasons why (see note below). I suspect no aggregator or financial institution who is potentially facing the risks around this broker acting as their credit representative while shoving this hand grenade into deals would be particularly pleased to receive a complaint about it. Likewise the MFAA (if the broker is a member).

      I'm not particularly enamoured of AFCA, and if the OP has suffered no loss yet, then they probably have little to offer. But if this clawback provision has put the OP in a situation where it caused them to feel prevented from refinancing in a rising rates environment, then they may be viewed as having suffered financial loss. Likewise, if it has caused stress or cost time to resolve, there may be non-financial loss. That is a matter for the OP to consider.

      The argument that the broker kept her end of the contract by getting [OP] a loan conveniently ignores at least two or three things:
      1. the changes to the law following the Royal Commission (NCCP Reg 28VG(2)(c) as mentioned by several brokers in this thread);
      2. the unequal bargaining positions of the parties to this contract: it is reasonable to expect that one of the parties would be familiar with the NCCP Regs at the time of the contract, and that party is not the OP; and
      3. possibly the timing of the clawback being added to the deal - depending on what was at stake at the time it was conjured up (for example, if it was introduced at a time there was a risk of the losing the deposit or missing the property).

      Seriously, some of the posts here are just mindblowing - perhaps it is the Dunning-Kruger effect. Don't let them intimidate you, OP. You've done nothing wrong.

      [Note - If I were a betting person, my money would be on a reply by the broker that they will let the OP off the hook if the OP refinances with them (the broker). If the clawback is actually unlawful per the NCCP regs, this type of response could amount to something even more problematic and sinister in a consumer transaction, as it may look a lot like attempting to use the threat of an unlawful contract provision as an incentive to compel the OP to not go elsewhere.]

  • trapper on 13/03/2023 - 10:02
    -1

    You should have walked away.

  • Atomik17 on 13/03/2023 - 12:58
    +1

    She sounds like a C***

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