Hundreds of brokers earned commission on their own loan

ALMOST 600 Aussie Home Loans brokers earned commissions on their own home loans, effectively scoring themselves “a discount”.

A Commonwealth Bank audit of its subsidiary found 586 cases of brokers submitting and earning commissions on their own loans during the past four years, the banking royal commission has been told.

Aussie’s chief financial officer Giles Boddy denied the brokers were pretending to be their own client, but conceded the behaviour was inappropriate.

“They’re buying a house, processing their own home loan through a lender and then, because they’re a broker, they’re getting a trail commission on that, so effectively a discount,” Mr Boddy said.

Aussie’s attitudes toward commissions have been a central part of the inquiry, particularly in relation to what impact the fraudulent conduct of four brokers terminated by them would have.

Lynda Harris, one of Aussie’s general managers, also faced sustained questioning yesterday about why Aussie hadn’t itself picked up the misconduct of two of the brokers, despite it occurring just six months after another fraud was reported from a lender.

In August 2013 Shiv Sahay was fired as an Aussie accredited broker for using fraudulent documents in loan applications, detected by Suncorp.

Broker Emma Khalil was fired in April 2014 after Westpac notified Aussie of misconduct, after Aussie’s processes first failed to notice.

“Aussie’s processes did not identify this particular example but we were reviewing files, we were attempting to start a really rigorous compliance program and we had very clearly the expectation in the business that we should be looking for brokers doing the wrong thing,” Ms Harris said.

Two months later Aussie was notified by ANZ about misconduct by broker Madh- van Nair, who was later convicted of multiple frauds which were also not identified by Aussie. Both brokers had submitted near identical evidence of employment, through falsified letters or pay slips, for multiple loans.

ASIC was notified about a fourth case of fraud, committed by broker Bernard Meehan and identified by Aussie in 2015. The inquiry continues.