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Macquarie Bank has said that from Friday (31 October), it will pause all new lending to trusts and companies.
In an email to brokers, seen by Broker Daily, the lender noted that the change will mean Macquarie will not accept new home loan applications where the borrower is a trust or company.
Macquarie said its core home loan offering remains unchanged for individual borrowers – including owner-occupiers and investors with PAYG and/or self-employed income.
For borrowers who are individuals, the lender will continue accepting income from trusts and companies. Existing home loans to trusts and companies will also not be affected by the change.
The decision was driven by a range of factors, Macquarie said.
“With application volumes increasing, we’re adjusting our approach to ensure we continue delivering market-leading turnaround times and high service standards for brokers and customers,” the bank said in an email sent to brokers.
It also listed “emergence of strategies on social media aimed at maximising lending through trusts and companies” as a reason for the change.
Upcoming anti-money laundering Tranche 2 regulations, which will require additional verification steps for trust and company loans (making the origination process more complex and time-consuming for banks, brokers, and customers), were also cited as a reason.
Applications for new lending to trusts and companies received by 30 October will receive “enhanced assessment”, Macquarie said.
Last month, several industry associations and professional bodies sent a letter from the Property Investors Council of Australia (PICA), a not-for-profit association representing property investors, suggesting that there is a “concerning resurgence of speculative marketing, conflicted conduct, and unlicensed financial advice emerging in the property investment space”.
The letter noted a perceived rise in risky and self-interested behaviour in the space.
The nine-page letter largely focused on buyer’s agents, but also suggested that there was a growing number of mortgage brokers who appear to be harnessing “speculative marketing”, particularly on social media, and are opening themselves up to conflicted conduct and, potentially, unlicensed financial advice.
[Related: Home loan books rise at 8 out of 10 of the biggest banks]
