[flex_video widescreen=”true” vimeo=”true”] [\/flex_video]<\/p>\n
Transcript:<\/strong><\/p>\n It appears APRA is turning to the banks and warning them\u00a0 that they have fallen well short of expectations regarding portfolio controls for commercial property.\u00a0 APRA has said – \u201cJustifying lending decisions on the basis of \u2018long-standing relationship\u2019 or \u2018good track record\u2019 are insufficient, by themselves, to mitigate higher risk characteristics such as higher leverage or weaker pre-sale cover, especially if these are outside approved underwriting standards\u201d. \u00a0Regulation has been an ongoing theme this year. [flex_video widescreen=”true” vimeo=”true”] [\/flex_video] Transcript: It appears APRA is turning to the banks and warning them\u00a0 that they have fallen well short of expectations regarding portfolio controls for commercial property.\u00a0 APRA has said – \u201cJustifying lending decisions on the basis of \u2018long-standing relationship\u2019 or \u2018good…<\/p>\n","protected":false},"author":176692471,"featured_media":12245,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,11,13,29],"tags":[70,131,132],"class_list":["post-13015","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-video","tag-featured","tag-videos","tag-videos-featured"],"yoast_head":"\n
\nIn March, APRA introduced new restrictions on interest-only lending to reinforce \u201csound residential mortgage lending practices in an environment of heightened risks\u201d.\u00a0 In the same month, ASIC released its report on broker remuneration, stating that the standard model of upfront and trail commissions could create a \u201cconflict of interest\u201d.
\nIn June, ASIC also found a potential conflict of interest within the peer-to-peer lending sector, as loan origination fees made up 83 per cent of marketplace lenders\u2019 revenue.\u00a0\u00a0 You would have to wonder if that is a conflict of interest.\u00a0 Peter Vala from Thinktank \u2013 a commercial lender \u2013 said \u201con the nose\u201d development and construction finance has been identified as an ongoing trend but highlighted that even standard loans are becoming increasingly difficult to fund for some borrowers.
\nHe said \u201cServiceability threshold requirements are increasing noticeably and some of the banks are aggressively re-pricing and re-framing existing borrowers\u2019 facilities.\u201d\u00a0 The industry is seeing a lot more selectivity from major finance providers when it comes to what types of lending they will take on.\u00a0\u00a0 Still on APRA \u2013 it appears the regulatory measures to curb investor lending appear to be working, with the latest housing finance figures showing a further fall in April.
\nABS Housing Finance Data shows a 2.3 per cent drop in investor lending in April.\u00a0 Rate City is tipping we will see a further reduction in investor activity in the coming months but they question if it will stick \u2013 the reductions that is!\u00a0\u00a0 Last time this happened there was an immediate drop in the figures but the numbers started climbing back up within six months. The other key statistic to come out of the ABS data was a sharp reduction in refinancing activity. Mortgage holders made five point eight billion dollars of refinancing commitments in April \u2013 down four point four per cent over the month and seventeen point eight per cent over the year.
\n
\n <\/p>\n","protected":false},"excerpt":{"rendered":"