YBR Home Loans Signals Digital Pivot and Broker Expansion


The recently rebranded franchise and brokerage aggregation group – Yellow Brick Road (YBR) Home Loans – has announced a multi-channel distribution offering, with a mix of digital and traditional mortgage brokerage.

In an ASX market update in which it described its strategic direction for FY22 and its results for FY21, the leading brokerage firm announced that it had launched Y Home Loans, the YBR’s digital mortgage brokerage business.

The platform will allow clients to apply for home loans digitally through yhomeloans.com.au; it includes educational content to guide clients through the home loan process.

YBR also reported the upcoming launch of the yhomeloans app, through which customers can apply for a home loan through their phone and receive instant indicative offers if they meet credit policy requirements.

YBR said it will launch targeted digital marketing campaigns to raise consumer awareness of the brand.

Network of brokers to expand

Along with this digital focus, YBR also announced plans to expand its broker network across YBR and Vow by 100 over the next 12 months, in line with its strategy of combining digital capabilities with traditional mortgage brokerage.

This would be achievable through the brand’s presence, commission structure, digital marketing and an effective lead management and tracking system, the brokerage said, adding that it would increase recruiting capabilities, d integration and creation of brokerage companies.

YBR aims to become a ‘data driven’ organization in FY22 and launch predictive triggers for customer retention and market and geographic data for each region in Australia to support expansion of the YBR distribution. It would also use external and internal data to determine the optimal competitive positioning in the market for new brokers.

He previously announced other enhancements to be rolled out over time, including digital marketing, comprehensive sales data, and compliance-related data (with the ability to take a risk-based, risk-based compliance approach to compliance. broker profiles).

Develop the wholesale financing division

In addition, YBR has indicated that it aims to “turbo-charge” its mortgage-backed securities securitization business, Resi Wholesale Funding (RWF), by expanding funding, product sets and functionality.

YBR plans to promote RWF products within its network of over 1,400 brokers through a combination of its Business Development Director (BDM) team, online tools and content, direct access to a customer-focused credit team and fast processing times.

YBR – which was known as a brokerage franchise brand – increasingly positioned itself as a non-bank lender after the start of its mortgage securitization program.

In 2020, the group partnered with international alternative asset manager Magnetar Capital to launch RWF, the mortgage-backed securities securitization joint venture.

In September of this year, YBR changed its name to YBR Home Loans and ceased to use its earlier mark of Yellow Brick Road Wealth Management. The group sold the operational and commercial functions of the YBR Wealth head office to InterPrac Financial Planning in 2020.

YBR has indicated its intention to invest in technology to reduce the human interactions involved in the credit assessment and settlement process for mortgage loan applications, with the goal of obtaining instant conditional approvals for standard mortgage loans. .

He said he would use the data to understand broker and consumer appetites to support his product design process, increase conversion rates by understanding leak areas, and identify brokers with profiles aligned with the RWF appetite.

YBR added that there are opportunities to increase the funding available, including additional warehouses and the issuance of mortgage-backed securities in the public securitization markets.

YBR Group Reports Loss of NPAT

In FY 21, RWF – which YBR called its own “home loan factory” – said its loan portfolio stood at $ 152 million while settlements stood at $ 170 million. , with 236 brokers adopting the facility.

The YBR Group reported an overall loss in net income after tax (NPAT) of $ 460,000, due to a loss of $ 5.2 million on the net present value of the future trail (non-cash item), impacted by a combination of market factors and lower margins on new regulations.

In FY21, YBR Group’s loan settlements totaled $ 13.4 billion (up 16.3% from FY20), while its loonie portfolio stood at $ 51.7 billion (up 2.9% from FY20).

Earnings before interest, taxes, depreciation and amortization (EBITDA) (cash) excluding profit on disposal of businesses and impairment of joint ventures increased by 94% compared to FY20 to reach 6.1 million of dollars.

As of September 30, 2021, the Vow Financial network had 1,321 brokers, which reported settlements of $ 11.8 billion in FY21 and $ 43.1 billion in the underlying loan portfolio as of June 2021 .

YBR had 108 brokers in its network as of September 30, 2021, and $ 1.6 billion of settlements in FY21 and $ 7.6 billion of underlying loan portfolio as of June 2021.

The Group’s Resi division reported $ 301 million in settlements in FY21 (including RWF), $ 1.3 billion in loan portfolio in June 2021 (including RWF) and a warehouse of $ 250 million. dollars (in addition to other wholesale funding lines).

[Related: Yellow Brick Road announces rebrand]

YBR Home Loans Signals Digital Pivot and Broker Expansion

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Last updated: October 22, 2021

Posted: 25 October 2021

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Malavika Santhebennur

Malavika Santhebennur

Malavika Santhebennur is the Mortgage Securities Editor at Momentum Media.

Prior to joining the team in 2019, Malavika held positions at Money Management and Benchmark Media. She has been writing about financial services for six years.


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