Consumers use brokers as guides for what is often their life’s most significant financial decision – buying a home. Getting a poor loan, even if customers can afford to pay it, can have significant financial consequences, with consumers paying tens of thousands or even hundreds of thousands of dollars more over the life of a mortgage. In some instances, mortgage brokers appear to be targeting customers in clearly vulnerable situations and recommending harmful borrowing strategies that leave the broker with a sizable commission but the customer with debt they can’t afford to repay. The high-level solutions to these problems are two-fold. First, conflicted remuneration that drives poor consumer outcomes must be addressed through an industry-wide solution with strong enforcement arrangements and sanctions for non-compliance. Second, mortgage brokers must be held to higher standards to protect consumers from harmful advice
