One should understand the business they are investing in before...

One should understand the business they are investing in before parting with their hard earned.

MOC is a 'broker' so they are nothing like RAMS who underwrote many of the loans they provided. MOC receive commissions for arranging mortgages and the problems that MOC have had recently relate to the various announcements by the banks (WES & CBA in particular) about reducing commission rates to brokers. Therefore, MOC's share price has fallen on the 'perception' that they will be receiving less comm from the banks, and therefore reduced income.

The banks are loving this 'squeeze' on the brokers as they know that many mortgage shoppers are coming to them directly now, due to their ability to offer cheaper loans as a result of the credit crunch.

One must remember that MOC don't just sell mortgages offered by the banks - there are other providers who have not reduced broker comms.

I think the MOC model is OK. I have faith. If you think about the current market and rising interest rates, people should be shopping around to save a few bucks.

Interestingly, whilst they have disclosed the reductions in comm by the banks, MOC have not, to my knowledge, issued a profit downgrade. It will be interesting to see how they shape up this year.

I bought a few more today @ .95 to average down.

Cheers,
Mac