Managing director Roger Poulter says his firm looked at its previous 100 loan discharges and found that 84% of them had occurred without the original mortgage broker who introduced the client being aware that the discharges were impending.
And 75% of those discharges involved clients refinancing, also without the broker being aware or involved.
Most of these discharges occurred after about three years or so into the loan.
That might suggest the brokers haven't been doing their jobs properly but Poulter thinks other, more complex factors are at work.
About 80% of all loan applications Pacific, a non-bank lender, receives have already been declined by one of the four major banks, and other non-bank lenders probably have a similar experience, he says.
By and large, Poulter thinks brokers in New Zealand "are still not getting the cream of loans, the top quality borrower," although they've progressed from being seen as a route to the lender of last resort.
Even though Pacific's borrowers had been turned down for a loan by their banks, they probably still have accounts with them.
Poulter thinks that at some point a borrower will ask their bank about, say, finance for a car or a debt consolidation. At that point, the bank will ask where their mortgage is and then propose refinancing the whole package.
In the intervening period since the initial declining of the mortgage, the borrower will have built up a history of repayment and, certainly in the current environment, the property's value will have appreciated considerably, giving the borrower greater equity and the bank a greater level of comfort, he says.
"When the loan history gets more positive, the bank gets more interested."
Pacific decided to take a pre-emptive approach to retaining borrowers - the longer it can keep a loan on its books, the more valuable it becomes.
About a month ago, it sent out a newsletter to all its borrowers suggesting that if they need finance for any other purposes they should contact Pacific first. So far, it has received more than 60 enquiries, 22 of which have reached the loan documentation stage - Pacific's practice is to suggest that borrowers get their brokers to prepare their applications.
"You could assume those were 60 potential clients who might have gone somewhere else," Poulter says.
