AFG expands NSW and WA teams

AFG has today announced the appointment of a new State Sales Manager in WA and an additional Partnership Manager as it expands its footprint in NSW.

In NSW Erin Williams joins AFG from the Loan Market Group after a decade of supporting brokers and the industry. AFG National Partnership Manager Beccy Ras said she was delighted to be welcoming one of the state’s best Partnership Managers into the AFG team. “We are thrilled to have someone so experienced join our team in NSW,” said Beccy. “I’m sure our brokers will love working with Erin.”

“The experience she has gained from working at NAB and PLAN will stand her in good stead and add great value to AFG and our brokers.”

Erin joins the AFG team this week. “I’m excited to be joining AFG at a time when they are leading the industry in technology investment and living up to their positioning of ‘brokering a better future’ for AFG brokers across Australia,” she said.

“They have some exclusive products for their members, an industry leading Commercial & Equipment Finance platform and I’m excited to be able continue my passion of supporting brokers as they build their businesses, ” said Erin.

AFG also recently appointed a new State Sales Manager in WA with Sev Isikli joining the team from Beyond Bank Australia.

Head of Sales & Distribution Chris Slater said the team was delighted to have Erin and Sev join the team to support the company’s plans to continue to grow market share. “Sev’s collaborative style and drive to deliver service excellence will be a great addition to the WA team. She has a proven track record and a wealth of experience in lending and business development.”

“We are as energised as we’ve ever been with a lot going on, so having Sev and Erin on board is a great boost for the team.

“Our new technology roll out is getting closer every day which is exciting, and we are continuing to expand our panel options with a clear eye on supporting our brokers right across the country,” he concluded.

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Non-bank lender appointed to AFG panel

AFG has today announced the appointment of non-bank mortgage lender, Funding, to the AFG panel. Funding is a short-term private lender that offers first and second registered mortgages and provides further choice for AFG brokers and their clients.

AFG Head of Sales and Distribution Chris Slater welcomed Funding to the panel. “The appointment of Funding to the AFG panel marks the first time a short-term residential lender has been made available to our brokers.

“Funding offer short term property secured loans for many objectives, including bridging loans, business and personal loans, development and construction loans, and many other purposes with loan terms from three months to three years.

“If a borrower only requires funds for a short term, rather than a 30-year home loan, they can often struggle to have a bank meet their needs.

“With a local credit assessment team on the Gold Coast, Funding is also known to deliver a quick turnaround, which is important to brokers and to borrowers.

Funding National Partnership Manager Michelle Southern said: “We are super excited to partner with AFG and provide our product to their professional network of brokers.

“This partnership furthers Funding’s mission to be the trusted name in private lending providing faster, simpler, short-term funding.

“Now is the perfect opportunity for brokers to consider private lending as a credible solution for borrowers seeking fast and flexible property finance outside traditional lenders.

Funding products are available to AFG brokers from today.

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AFG establishes new outsourced trail book marketplace for brokers

AFG has announced a new outsourced trail book marketplace for brokers through an arrangement with specialist cashflow lender and Mergers & Acquisitions advisory firm, TrailBlazer Finance.

AFG Head of Sales and Distribution Chris Slater said the new arrangement follows on from a successful pilot program last year and is part of AFG’s commitment to support brokers from the start right through to the end of their broking career. “The purchase and sale of a trail book is an important decision. For brokers, their trail book is their largest asset, and it was important to us that they have full access to information that supported their decision making and was independent of AFG.

“With TrailBlazer managing the process AFG brokers will have a single point of contact whose sole focus is supporting our brokers with expert advice and service as they transact.

“The outsourced arrangement with TrailBlazer Finance will ensure a seamless and transparent mortgage trail book buy-sell process for both buyers and sellers and creates a competitive marketplace for our brokers’ trail books,” he said. “Importantly, it will also ensure customers are well looked after and are at the front and centre of the transaction.”

Jeff Zulman, Managing Director of TrailBlazer Finance commented, “We are thrilled to take over the mortgage trail book buy-sell program for AFG. As a specialist lender, mortgage trail book valuer and M&A advisory firm, TrailBlazer Finance is ideally positioned to guide AFG brokers through the many complexities of buying and selling trail books. The arrangement cements our strong multi-year relationship with one Australia’s largest aggregators, and we look forward to working together more closely.”

The announcement follows the recent appointment of TrailBlazer Finance to AFG’s Commercial and Asset Finance panels.

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AFG appoints Heartland Reverse Mortgages to lending panel

Australian Finance Group has today announced the appointment of specialist lender Heartland Reverse Mortgages to its extensive lender panel.

AFG Head of Sales and Distribution Chris Slater said the appointment of a lender focused on customers over the age of 60 is in response to a growing need for choice of finance options for broker customers. “The personal expertise a broker offers to their clients is what sets brokers apart in the market. With more than 70 lenders on the AFG panel, our brokers have access to finance solutions that meet the needs of their clients at all stages of life.

“Ageing in place and access to equity are important considerations and the finance products offered by Heartland will help AFG brokers and their clients navigate these important decisions.”

Heartland Head of Operations Sharon Yardley said, “One of the key findings made in the Retirement Income Review by the Federal Government, released by Treasurer Josh Frydenberg in November 2020, was that “a more optimal retirement income system would involve retirees more effectively drawing on all their assets, including the equity in their home, to fund their standard of living in retirement”.

Recent research supported by Heartland by the Royal Melbourne Institute of Technology (RMIT) about financing ageing in place found that most Australians want to remain in their home as long as possible, but many don’t have the funds to do so. This is due to limited superannuation and the rising cost of living.

Furthermore, 36% of older homeowners said they live in a home that may be unsuitable for ageing in place, without upgrades or renovations. “This research shows there is demand in the market for financial products designed for retirees, such as reverse mortgages, which can facilitate ageing in place and a more comfortable retirement,” said Sharon.

Updates to the 2018 Banking Code of Practice by the Australian Banking Association have led to an increased focus on ensuring finance and mortgage brokers are sufficiently educated on reverse mortgages and equity release products.

“The provision of choice for clients is at the centre of every broker’s business,” said Chris. “Heartland is known for being passionate about training and educating brokers about reverse mortgages to give them the knowledge to succeed in helping their clients live a more comfortable retirement.”

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Introducing BID coaching for AFG brokers

We’re ramping up Best Interests Duty (BID) Coaching  for brokers with the creation of BID Coach role to support our brokers as they implement BID measures into their business.

The AFG BID Coach will work hand-in-hand with brokers to provide one-on-one coaching to ensure brokers feel comfortable through the transition. The BID Coach will help brokers ensure positive customer experiences and that brokers are meeting their BID obligations.

National Compliance Manager Shirley Elliot said the role was a critical part of AFG’s strategy to help their brokers.

“This is a key role for us at a time when our brokers are writing record numbers and helping more customers than they ever have before, so we want to ensure they have all the help they need…” Elliot said.

Gearing up AFG compliance support

AFG’s Head of Sales & Distribution Chris Slater welcomed the support.

“We had almost 900 brokers on our Broker Insights webinar last week and another one scheduled this week where the whole focus is Best Interests Duty and understanding the regulations around Conflicted Remuneration,” he said.

“We took over 100 questions from brokers wanting guidance, support and help with live transactions so we know brokers want face to face support and a team they can rely on so we are very pleased to be delivering this key support role which our brokers will welcome.”

He added that AFG’s new technology build, which is being released early in 2021, was designed in collaboration with AFG’s brokers, lenders and regulators. The critical component of compliance has been built into the process from the ground up.

Record quarter as homebuyers on the move

Australian Finance Group (ASX:AFG) has today announced a record-breaking quarter with more than $19.9 billion of home finance lodged by AFG brokers across the second quarter of the 2021 financial year.

AFG CEO David Bailey explained the results: “The national figure represents an increase of 9.5% on the first quarter of the 2021 financial year and an increase of 30% on the corresponding quarter last year.

“Gains were recorded across the country – New South Wales up 3.5% for the quarter, Queensland up 7.8%, South Australia up 0.4%, Victoria up 18% and Western Australia recording a 13.3% jump on Q1 2021. The Northern Territory recorded a drop of 10%.

“With travel off the agenda for many, the home has become even more important and 42% of lodgements were for those upgrading their homes.

“Government incentives for First Home Buyers continue to support those looking for their first home with 22% of lodgements being made by those taking their first steps into the housing market,” he said. “A record high Loan to Value Ratio of 73% is due to the high proportion of First Home Buyers who typically have smaller deposits.

The percentage of Investor loans being taken out remains at an all-time low of 21%.

“The market is well aware that low interest rates are likely bottoming out and this has seen the percentage of customers choosing a Fixed Rate product still high at 29.2%,” he said.

“Low interest rates on offer has also meant homeowners are taking the opportunity to pay down their debt faster with a record 88% choosing a Principal & Interest product over an Interest Only loan. The average loan size is also at record levels, coming in at $544,359 for the quarter.

“With the four big banks leveraging their funding advantage through very competitive pricing and cash back offers, smaller lenders’ share of the market has remained at 41%.

“The Westpac stable of brands – Westpac, BOM, BankSA and St George – have increased their combined market share by 2.5% to be sitting at 18.7% while CBA group – CBA and Bankwest – have dropped 4.7% to now be holding 20.7% of the market.

The federal government has outlined the importance of access to credit for the economic recovery of the country. To help gauge the flow of activity in the market and the time involved for a residential application to progress to formal approval, AFG will now include a weighted average Lender Turnaround Time (LTT) indicator in the AFG Index.

“The LTT analysis shows the average number of days from submission of the loan application
by the broker, to the lender providing formal approval, is sitting at 25 days. Reflective of the level of activity in the market, this is the highest it has been at any point over the last three years and a blow out of around 4 days from 12 months ago,” he concluded.

Download full report here

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AFG appoints State Sales Manager for Queensland and the Northern Territory

After five years as a star performer within the AFG Home Loans business, Adam Barker has been appointed to the role of State Sales Manager for Queensland and the Northern Territory at AFG.

AFG National Manager – Strategic Partners and Recruitment Them Lam announced the appointment to staff today. “By taking on the State Sales Manager role Adam will now shift his focus to work alongside AFG’s industry partners in Queensland and NT and to take on the responsibility for the recruitment of new brokers and broker businesses to AFG.

Adam will also join the AFG Strategic Partnership team and will work closely with Them to support AFG’s strategic partners located in his region.

“We believe Adam is the perfect fit for the role and the right person to head up this important part of the business,” said Them. “I am very confident Adam will make his mark on the role.”

After a long career in the banking and finance industry Adam is looking forward to the challenges his new role will bring. “Taking on the role of State Sales Manager was an easy decision,” he said. “I firmly believe that AFG has the staff and resources to help any broker business – small, medium or large – grow and be equipped with market leading tools and support.

“It is a passion of mine to build and maintain strong relationships within the industry and there’s no better opportunity to do that than in this role.

“I’m also really looking forward to working closely with our lender partners and assisting them with the organisation and roll out of our very successful regular Lender Training Sessions and Professional Development Days.”

Adam begins in the role this week.

AFG adds global award to trophy cabinet

Australian Finance Group has won a global award for the company’s bespoke broker learning development program and platform.

AFG is one of three winners globally in the SAP Litmos ‘Lenny Awards’ in the category – Best Customer Training Program.

SAP Litmos has over five thousand enterprise customers and 22 million users in more than 130 countries and received hundreds of entries across each of the 10 distinct categories in the 2020 Lenny Awards. This year marks the first time AFG has entered the awards.

The global award comes on the back of AFG’s recent national award for Training & Education Program of the Year in the 2020 Australian Broking Awards.

2020 has seen the company’s L&D platform, called Learn, expand to more than 265 courses for the AFG broker network to access within the platform. In addition, brokers can also revisit video and instructional content from past courses at any time.

AFG CEO David Bailey thanked the Learning and Development (L&D) team for their innovative approach and support of the AFG broker network. “We recognised early on that the disruption caused by COVID19 would mean the way brokers would want to access training, support and information would change very quickly.

“The L&D team of Peter Kailis and Sahani Burah have worked throughout the disruption caused by COVID-19 to ensure our brokers were supported with access to world-class training, resources and professional development opportunities” he said.

Across the year, AFG have also run 142 webinars which were attended by 40,655 brokers on top of their regular online lender accreditation series. In total, our brokers have completed over 70,000 CPD points using the AFG Learn program.

AFG broker Catherine McFarlane, Oxygen Home Loans General Manager, congratulated the L&D team on the win and thanked them for the role the L&D team played in keeping the sense of community among AFG and the broker network. “I reached out to Peter to thank the team for all of their hard work on the webinars this year. They were a godsend for many people through such a tough year and their efforts did not go unnoticed.”

“AFG has been working to support our brokers’ personal and business growth for over 26 years,” said David. “With an easy-to-use platform supported by industry leading content and tailored training courses, as well as a protective compliance framework, we are confident our brokers will continue to be at the forefront of the industry.

“The success of our business rests with the commitment we have to providing the platform for their success.”

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Record-breaking quarter for AFG brokers

Modern 2-storey home

(ASX:AFG) The AFG Index released today shows another period of growth for AFG brokers to close out the first quarter of the 2021 financial year. More than 35,400 residential loans were lodged, with volume surpassing $18 billion for the quarter, eclipsing last quarter’s record-breaking levels.

AFG CEO David Bailey explained the results: “The first quarter of the 2021 financial year has seen AFG record its highest-ever lodgement volume and represents a lift of just over 8% on last quarter. Against the corresponding period in FY2020 it is 16% higher. The surge was largely driven by an uptick in First Home Buyers as they make the most of federal and state government incentives to support the country’s construction market.

“Mortgage brokers have played a vital role in ensuring first home buyers were in prime position to access the various incentives and understand their choices. A total of 23% of all lending applications processed by AFG brokers during the quarter were for those purchasing their first home.

“Whilst remaining stable, the refinance boom evident in the months during the broader national lockdown now appear to have returned to more traditional levels, whilst upgraders have maintained a strong position in the market,” he said. “Those who are confident in their own personal financial circumstances during the pandemic are looking for opportunities to move to a larger home.

“As brokers have navigated the challenges of this period of market disruption, their role as a trusted support for their customers has meant they have continued to assist customers across the country. Whilst understandably Victorian numbers have not reflected the broader Australian experience, the result recorded is still in line with that recorded in the last quarter of FY20, and still ahead of the same quarter last year.

“With record low interests expected to be maintained for an extended period property prices are being supported by a strong underlying demand for residential mortgage finance.

“Looking across the country, the Victorian lockdown has resulted in a flat result quarter on quarter, and the Northern Territory recorded a drop, whilst growth has continued in all other states. When compared to the same period last year, the increases show an alignment to the levels of lockdown in response to COVID-19 that have been experienced in each state – New South Wales was up 12.5%, Queensland and South Australia were both up 31% and Western Australia was up 38%.

Principal and Interest (P&I) loans continue to track upwards as more customers take advantage of the lower interest rates on offer to pay off their mortgages faster.

“Once again, although not reported in the AFG Index, a look at the number of AFG Home Loans’ securitized product customers seeking assistance with their mortgage payments provides an insight into current market conditions.,” he said. “Pleasingly, the numbers have further decreased. As of 8 October, the numbers of customers with deferral arrangements for their P&I loans has dropped from 4.34% at the close of last quarter to 0.87%. In addition, 2.22% of AFG Home Loans securitized product customers have switched from P&I to Interest Only repayment arrangements. This is down from 4.38% at the end of FY20.

With tight regulations affecting rental markets the number of people applying for Investment loans also dropped to its lowest level since December 2012, to now be sitting at 21% of the market.

“After a tough six months competing against cash-back offers and competitive fixed rates from the major lenders, the non-majors have regained market share, rising from 33.2% at end of FY20 to 41.1% in FY21 Q1

“The major lenders’ market share dropped from 66.8% at the end of the 2020 financial year, the highest level since 2017, down to 58.9% at the close of Q1,” said Mr Bailey. “This trend was most evident when looking at the majors’ share of refinances, which tumbled from a high of 71.1% at the end of the 2020 financial year to 58.1% at the close of Q1 2021.

“ANZ was the standout, recording a significant drop in market share, sliding from 25.53% back to 9.67%. The Westpac Group seemed to be the beneficiaries, rising from 10.37% to 16.27% of the majors’ market share.”

The non-majors experienced growth across all buyer types, with the biggest rises being recorded by Refinancers and Upgraders. The non-majors’ share of refinances jumped from 28.9% to 41.9% in FY21Q1 and market share for those upgrading increased from 34.4% to 41.2%.

Queensland and New South Wales lead the country for the non-majors, with market share increases in both states increasing by 10% and 8% respectively. Among the non-majors, Macquarie recorded the largest lift in market share, rising from 6.74% to 10.25% for the quarter.

“The national average loan size is decidedly lower, dropping from $542,555 at the close of the last quarter to $514,532. This drop is largely driven by the profile of borrowers, in this case the presence of more First Home Buyers in the mix. This corresponds with a small uptick in LVR, again a reflection of the volume of First Home Buyers in the data.

Download full report here

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AFG successfully completes inaugural $500 million Non-Conforming RMBS issue

AFG Head office

Australian Finance Group Ltd’s (ASX: AFG) wholly-owned subsidiary AFG Securities Pty Ltd (“AFG Securities”) has successfully priced its inaugural non-conforming Residential Mortgage Backed Securities (“RMBS”) transaction.

The AFG 2020-1NC Trust $500 million issue is AFG Securities tenth issue since 2013, taking the total paper issued to the market by AFG Securities to $4.075 billion.

This being the first issue under its non-conforming program, the portfolio includes low-documentation and non-conforming loans originated by AFG Securities.

AFG Chief Executive Officer David Bailey highlighted the support received for the transaction from domestic and international investors. “We are very pleased to be able to upsize the transaction from $350 million to $500 million due to strong interest from both new and returning investors.”

“100% broker introduced, AFG Securities’ loans have always performed well and have consistently tracked well below the Standard & Poor’s Performance Index (SPIN),” said Mr Bailey. “Our underwriting standards, arrears-management processes and policies as well as our low historical arrears and loss performance, have informed the support of the transaction.”

Details of the notes are as follows:

Class Expected Rating S&P / Fitch A$M Amount Credit Enhancement (%) WAL (years) Benchmark + Margin
A1-S AAA(sf) / AAAsf 137.000 27.50% 0.7 1M BBSW + 0.90%
A1-L AAA(sf) / AAAsf 225.500 27.50% 3.1 1M BBSW + 1.55%
A2 AAA(sf) / AAAsf 92.750 8.95% 4.3 1M BBSW + 1.80%
B AA(sf) / NR 20.250 4.90% 4.3 1M BBSW + 2.65%
C A(sf) / NR 9.750 2.95% 4.3 1M BBSW + 3.65%
D BBB(sf) / NR 6.000 1.75% 4.3 1M BBSW + 4.70%
E BB+(sf) / NR 3.750 1.00% 3.8 1M BBSW + 7.85%
F NR / NR 5.000 5.1 Undisclosed
Z NR / NR Undisclosed

National Australia Bank Limited was the Arranger on the transaction and acted together with Commonwealth Bank Australia as Joint-lead Manager.

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