X-coll and strategy

Ur assumptions are correct, i went via a broker that worked for a bank.

Luckily she set up my loans correctly (not x-coll)

In the near future, the next broker will definitely be in this forum!!!

Haha my experience with bank brokers are a bit hit and miss. Sounds like your one did you a great job. The bad ones seemed more focussed on selling me insurance when I wanted a home loan.

I guess the same goes for actual brokers too. I've spoken to many of the brokers on here and by my limited evidence, the majority are in the hit category!

Goodluck. :)
 
I've mentioned this on the forum in discussion previously, you would find people switching channels and sourcing finance through different people because they haven't been satisfied with the service provided, a lot of the time they didn't know there was a disservice until after the fact ie x-coll. If the service was good likely you would never see the client infront of you. I often see loans x-coll and majority are from brokers, why am I seeing them... Because they're not happy with the service they provided.

My generalisation is that most of those who go through the time with clients discussing the benefits of not x-coll and explaining the benefits and potential dangers are usually going to continue to good service and not give them a reason to leave. Those that don't bother going through will likely loose the customer (in fact sounds like the OP banker did not x-coll and still OP is going to go elsewhere, as obviously wasn't explained well enough, so a service breakdown)

Great point Brady, that is very true. Given that most of my initial clients had their first loans sourced through a bank where they felt dissatisfied with service (haha no surprise, none have been from CBA to date), its likely my evidence is skewed greatly by your point. I'd never thought of the behavioural element here and took it on the argument brokers usually point out 'it benefits the banks, not you'.

Banks brokers that focus on customer satisfaction would probably have more interest in serving their customer as best as possible over hamstringing them with poor loan structuring arrangements.
 
Benefiting the bank is silly IMO the extra work x-col going wrong causes it stupid and a waste of money. The extra time the discharge team has to spend on the files, the extra valuation costs, along with the extra time spent dealing with a seriously pissed off customer. It's so counter productive. If it was seriously about the bank risk there would be annual reviews/valuations.

It poor training IMO, it's just how it was done at some point it would of been a risk factor, but the banks are past that IMO. I know of both bankers and brokers who have been around and successful for >10 years who x-coll. Because that's how they were taught and just don't know better.

Then there are those that are just lazy and don't give a *****. easy to write x-coll and on the way, not explaining pitfalls and benefits. As we know this can take time and can put some people off.
 
Retail banking indicates she's a bank employee, not a broker.

Brady the lender rational isn't one of costs at discharge time, it's more about customer retention. X-coll makes it difficult to move away from a lender which is why lenders often promote it. It's also why credit cards, savings accounts and often insurance are bundled into professional packages. Discharging also costs the customer in time, which gives the retention teams the opportunity to retain the customer as well.

This strategy was actually covered in one of the initial training sessions provided to brokers as part of a lenders accreditation. We were told that if the loans are crossed it makes it harder to leave. Give them 3 or more products and research shows borrowers feel it's too difficult to leave even if they know they can get a better deal. Longer term customer for the bank, more trail commission for the broker.

Care to guess WHICH BANK provided this training?
 
Sounds like its CBA - CBA created a sub channel whereby they employed people to write CBA loans and products. So its a bit like CBA branded brokers.
 
Retail banking indicates she's a bank employee, not a broker.

Brady the lender rational isn't one of costs at discharge time, it's more about customer retention. X-coll makes it difficult to move away from a lender which is why lenders often promote it. It's also why credit cards, savings accounts and often insurance are bundled into professional packages. Discharging also costs the customer in time, which gives the retention teams the opportunity to retain the customer as well.

This strategy was actually covered in one of the initial training sessions provided to brokers as part of a lenders accreditation. We were told that if the loans are crossed it makes it harder to leave. Give them 3 or more products and research shows borrowers feel it's too difficult to leave even if they know they can get a better deal. Longer term customer for the bank, more trail commission for the broker.

Care to guess WHICH BANK provided this training?

Exactly my point. The rational should be costs at discharge, to both the bank and the client. I believe it's done that way because they don't know better. And again my point it's coming from poor training.

The multiple product I can understand, making the banking easier they're less likely to leave. That makes sense, most of the time people will only take these extra products out because it's cheaper then they're already paying or the convienace outweighs the cost. Thats promoting good practice to retain a client, not stuffing them with x-coll.

I believe in doing the best for the client, this gets me more customers then jamming people up with x-colll. I bring in more business to the bank because people want to deal with me, not because they have to as loans are x-coll.

At no point in any of my trainings have I been told to x-coll a client to assist in retaining them. I was told that you shouldn't x-coll when LMI is involved due to extra cost. There wasn't a discussion any further about when you should and shouldn't x-coll and what can happen. Again I believe there is a service let down by the training staff, as I believe most don't know.

Again we are on SS most here aren't your mum + dad investor buying 1 IP.
 
Sounds like its CBA - CBA created a sub channel whereby they employed people to write CBA loans and products. So its a bit like CBA branded brokers.

Yes sounds like CBA mortgage innovators, which are bank brokers.

k88k did she discuss x-coll, your assumption was she got lucky. As mentioned previously, you don't just get lucky and not x-coll. It would of been a deliberate set up. But sounds odd that wouldn't of discussed or come up especially considering would be multiple sets of loan documents.
 
bank brokers? they arent brokers, cause they only use one lender. theya re self employed contractors to one bank. Note, many other lenders have similar set ups, outsourcing their home loan 'employees'.

The trouble with the model is that they try and make everything fit, which can get them into trouble, especially when they have DLA's etc.

They also get in trouble when they dont adequately disclose what they do and how they are remunerated, such as meeting clients in the retail banks offices, etc.
 
Yes sounds like CBA mortgage innovators, which are bank brokers.

k88k did she discuss x-coll, your assumption was she got lucky. As mentioned previously, you don't just get lucky and not x-coll. It would of been a deliberate set up. But sounds odd that wouldn't of discussed or come up especially considering would be multiple sets of loan documents.

Hi brady,

X-coll was not discussed.

I know its not 'luck' regarding the setup, i guess i didn't fully understand x-coll till i am here on this forum.
 
It's odd that wasn't discussed, usually it's the other way around. People getting x-col and no discussion took place. Well good to know that you aren't crossed, but would of been nice to had bit more info :)
 
Back
Top