The government has announced it will support all of the 76 recommendations made in the final report from the Banking Royal Commission, suggesting that there is likely to be significant changes to home loans, mortgage brokers and compliance bodies in the financial sector by the end of the year. In relation to the property industry, Commissioner Hayne heavily criticized the lending practices of banks with home loans, particularly their reliance on the inaccurate household expenditure benchmark (HEM). While various banks have pledged to reduce their use of the HEM, home loan applicants may find their regular discretionary expenses playing a greater role in home loan applications from now on, potentially making it harder to get a loan. Mortgage brokers were also a key focus of the report, with Hayne recommending that the current commission based system be replaced with an upfront fee paid by home loan applicants, as well as an obligation for brokers to act in their clients best interests.

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