A mortgage company has been referred to New Zealand's market watchdog over concerns about alleged conduct and compliance issues.
Harcourts affiliate Mortgage Express has cut ties with many of Brilliant Finance's local Chinese mortgage brokers, interest.co.nz reported today.
Brilliant Finance is understood to be an Auckland-based brokering company that works with the Chinese community.
Mortgage Express CEO Sarah Johnstone told the Herald she became aware of "some activities of concern at Brilliant Finance", which is a mortgage brokering firm operating on Auckland's North Shore.
Johnstone said she reported her concerns to the Financial Markets Authority in December.
"The matter is now in the hands of the FMA," she said.
A Harcourts spokeswoman added that Brilliant Finance had no direct relationship with Harcourts.
"The relationship was with Mortgage Express as a contractor."
In a statement, an FMA spokesman confirmed Brilliant Finance (BF) was brought to the watchdog's attention by Mortgage Express (MX) late last year.
"MX raised concerns about potential conduct issues with BF and we have been engaging with MX about compliance matters arising from this.
"Our oversight of mortgage advisers (RFAs) is enabled through Financial Advisers Act. We do not licence mortgage advisory firms or RFAs."
Mortgage Express is the local mortgage broking arm of Harcourts, the nation's biggest real estate firm.
Interest.co.nz reported that Mortgage Express became concerned about compliance issues surrounding mortgage applications made through several of its brokers associated with Brilliant Finance Ltd.
A likely concern was the "standard of documentation provided by mortgage applicants that were reliant on overseas income to meet their mortgage commitments", interest.co.nz said.
Some of the country's major banks cracked down on lending to foreigner buyers last year, introducing rules that effectively shut out foreign borrowers, including restricting lending to owner-occupied properties.
The moves followed similar restrictions introduced by the parent companies of the big four banks across the Tasman.
It is understood the banks in Australia had not felt comfortable with the accuracy of some of the income information they received from foreign investors.
Since Brilliant Finance was referred to the FMA, there had been a dramatic reduction in the number of Chinese speaking mortgage advisers at the company, interest.co.nz reported.
The Herald is trying to reach the company for comment.
Professional Advisers Association CEO Rod Severn told mortgagerates.co.nz any concerns about conduct or compliance issues should be investigated.
"So good on Mortgage Express for going to the FMA with any concerns.
"If the FMA uncover anything, then the problem needs to be cleaned up."