Lender exits Broker channel

RAMS Home Loans today confirmed that it will exit the broker channel effective 26 February 2010. - Thank god for that.

As Rolf mentioned yesterday wouldnt be that their parent lender is running out of cash.
I am with you Cameron who needs 24 day processing periods, ineffecient BDM's who never return your calls, staff on the so called help desk who think every broker is like a 2nd hand car salesman.

I can think of one or two lenders who if they took the same sort of action I wouldnt loose too much sleep.
My understanding is that RAMS has poor turnaround times and service, but has excellent serviceability models which leads to the ability to borrow more. Are there many other lenders with comparable models?
RAMS' strong point really was their serviceability model. They've got one or two products which are competitive so whilst they're usually not high on the recommended list, there are situations where they work better than anyone else.

Whilst every situation is different, I've often found that AMP has one of the most generous models (keep in mind this is a generalization). Their products aren't as cheap, but they're probably not unacceptable. I've never had any issues with their service.

Given their split from Westpac on pricing, two tiered service models and many other examples of strange behavior, this news isn't really unexpected. It wouldn't surprise me to see RAMS withdraw further from the market and ultimately be absorbed into Westpac purely as a franchise channel for re-branded Westpac loans.

Loosing a lender isn't good for anyone, but I doubt they're high on any brokers list anyway.
the sad rams service story is pretty much geared around the low profile of limiting new business for the obvious reasons, limited mulah at decent cost.

I understand Rams decision and it makes sense to look after your franchisees.

They will be back, phoenix number 3 :)

BTW, their serviceability model is good, but depending on the overall scenario there are quite a few lenders that are comparable

An appropriate term would be 'oligarchy'

Possibkly you mean oligopoly:

Definitions of oligarchy on the Web:

a political system governed by a few people; "one of his cardinal convictions was that Britain was not run as a democracy but as an oligarchy ...



A market dominated by a small number of participants who are able to collectively exert control over supply and market prices.
From the net

According to RAMS chief executive Melos Sulicich, the recent slump in broker activity was the main driver behind the lender’s departure.

“Following a review of the options available to manage lending growth it has become clear that pursuing a dual distribution model in the current environment is not the best use of our resources. As a result, RAMS Home Loans has today taken the difficult decision to close its broker distribution channel,” Mr Sulicich said.

“The decision to withdraw from the broker channel was not taken lightly but it is important that we align our time and resources to the activities that add the most value to our customers. We’re convinced that focusing on the franchise network is the right structure for RAMS and we are committed to growing and developing the franchise business.”

RAMS spokesperson Paul Smith told The Adviser that the lender will send an email to aggregation heads later today informing them of the change.

“We will send out an email that runs through what exactly is happening; RAMS head of operations Tony MacRae will then speak with each aggregation head individually and answer any questions they might have,” he said.

“Nothing will change for pre-existing customers. However, any customer that wants to refinance with RAMS will not be able to do so through their broker.”

Effective from today, RAMS will also change the pricing on its full doc loan, reducing its loan-to-value ratio from 95 per cent to 85 per cent in the broker channe
Hiya Red

Thats almost funny :)

they dont want and didnt want the broker support, as RT has mentioned their service was mega bad, the follow up worse.

In some instances we still had to use them, with many borrowers ending up with an OK result

If you have a franchise network than why would you need a "broker channel?"
Answer is you really don't.

So why do they use brokers?
Because everyone else did, and it was suppose to save employing people.

Why are they all running away now?
Because they broker network stats are now the same as most industries with a large majority of them being incompetent and inexperienced.

I'm expecting this trend to continue until a lot more brokers drop off.
The good brokers will either weather the storm or retire, for the good ones just starting it can only get better, and the rest will all close up & leave for "personal reasons"
On the issue of "Lender exits Broker Channel" what are other broker's thoughts on a fee for service? Would you still send clients to Rams if it fits the bill?

What about a mixed business, i.e comm's and some fee for service?

This is not how we operate but could work?

Thoughts anyone?
On the issue of "Lender exits Broker Channel" what are other broker's thoughts on a fee for service? Would you still send clients to Rams if it fits the bill?

What about a mixed business, i.e comm's and some fee for service?

This is not how we operate but could work?

Thoughts anyone?

Once they disband the broker channel in Feb it would be tough recommending a product where I didn't have access to servicing calculators and policy information via their broker site (I assume like with RHG our access will be terminated).
Did you catch the news - Westpac borrowed $9 billion via the RBA guarantee in December.

I think your right Rolf - looks like they are short of cash and limiting the ability of borrower to access their products.

Hopefully with the RMBS markets reopening we might get some more non- bank lenders back into the market to bring back some more competition.

Competition : the act or process of competing :
The effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms:D
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