Mortgage broker starts petition

PHOTO: Squirrel founder and CEO John Bolton. FILE

A mortgage broker has launched a petition to encourage a review of the Credit Contracts and Consumer Finance Act (CCCFA), saying the new requirements are overly prescriptive and make it tougher for all borrowers.

It comes as CCCFA changes formally introduced from December 1 put extra onus on lenders to ensure loans are affordable, to protect consumers from taking on too much debt.

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Incorporating feedback from 60 mortgage advisers, an October survey by independent economist Tony Alexander, showed that due to the incoming changes, bank assessments of borrowing capacity were getting tougher.

Mortgage advisers told Newshub the level of evidence required to prove affordability had increased, Campbell Hastie of Hastie Mortgages saying bank statements were put “under the microscope”.

David Clark, Minister of Commerce and Consumer Affairs, said concerns around lending practices, particularly for vulnerable borrowers, led to the Government’s review.

“These new rules can help prevent consumers taking on debt they cannot afford to pay back,” Clark told Newshub.

But John Bolton, founder and CEO of mortgage brokerage Squirrel, said the changes had gone too far, as they made it a lot harder for everyday Kiwis to get loans.