New Mortgage Choice CEO wields the axe

Broker Mortgage Choice announced yesterday that it had cut its head office headcount by seven per cent.

The company's new chief executive, Michael Russell, has been reviewing the business since he came on board earlier this year. In addition to staff cuts he has restructured some departments.

The latest reduction follows a 12 per cent reduction in headcount last year.

Mortgage Choice has been hit by lower settlement volumes and commissions. It reported a net profit of $8.3 million for the six months to December, 22 per cent down on the previous corresponding period.

Settlements were $4.1 billion in the half, down 21 per cent from settlements of $5.2 billion in the six months to December 2007.

Origination commission was $25.6 million, down from $34.8 million in the previous corresponding period. Trailing commission was up from $39.9 to $43.3 million over the same period.

The company said the full impact of commission changes was yet to be felt. Some lenders have stepped their changes and have yet to complete the process.

By contrast Australian Finance Group, another large aggregator with brokers as affiliates rather than franchisees, yesterday reported demand for new loans (based on April sales data) that were the second highest reported by the group, and exceeded only by AFG's March new business levels.