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Wayne Ormond, founder at Refund Home Loans has pointed a finger at the Federal Treasurer saying he has missed the real problem in keeping the Big Four in check, at a time when the ruckus around lender exit fees is grabbing all the political attention.
But Ormond claims it is not the exit fees at all that are trapping borrowers, rather its non-transferable mortgage insurance policies that are the chief protagonists, according to a report on Brokernews.
He said that Wayne Swan and the banks have done so either deliberately, or in an attempt to "draw a red herring over the situation" - or even perhaps through lack of understanding.
"The reality is that any borrower with less than 20 per cent equity in, or deposit on, their home loan is required by their lender to take out a mortgage insurance policy. Many borrowers do not understand that such policies only insure the lender against default, not the borrower," he said.
No rule against marauding Big Four on rates
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