Brokers originated about $50 billion in new home loans during the September quarter last year. The upfront commissions on that would have been about $300 million based on the range of upfront commissions between 0.6 per cent and 0.65 per cent.

The September quarter lending would have locked in another $50 million in annual trailing commissions. These will last for the life of each loan.

Total trailing commissions in the industry are probably running at about $300 million a year assuming mortgage brokers have probably written about a third of all owner-occupied mortgages.

Although commissions are disclosed to home loan borrowers at the time of sale it is not clear whether or not the final recommendations given to consumers are in their interests.

It is that uncertainty which prompted the Financial System Inquiry to recommend an inquiry into mortgage broker remuneration structures. That recommendation was accepted by the government, which ordered ASIC to conduct its review.

Assistant Treasurer Kelly O'Dwyer has given ASIC until the end of the year to review the industry's remuneration structures and that suggests action some time next year.

A ban on commissions in mortgage broking would be in keeping with the actions taken by the government in financial planning and, to a lesser extent, in life insurance.

The obvious alternative would be a fee-for-service system but when that was applied in New Zealand it virtually wiped out the mortgage broking industry.

Mortgage brokers have worked hard in recent years to lift professional standards, particularly through the Mortgage and Finance Association of Australia. But its standards continue to lag those being imposed on other sectors including financial planners.

ASIC's review of remuneration structures kicked off officially this week with the release of a document outlining the final scope of the regulator's inquiries. Letters will go out to lending institutions, mortgage aggregators, mortgage brokers and other online businesses.

The review, which is being led by ASIC's senior executive leader in credit, Michael Saadat, does not extend to the gathering of information about fraud in the mortgage broking industry.

Fraud has reared its ugly head over the last five years but ASIC has decided to gather information about that as part of a separate project, which is only happening because of the additional funding in the recent federal budget.

One area that will get attention as part of the review is in relation to the contentious issue of default rates on loans written by mortgage brokers. Data published by the Australian Prudential Regulation Authority has found that default rates are higher on loans written by mortgage brokers.

ASIC will gather its own data on loan performance over the past five years to inform its own decisions.

The review of mortgage broker remuneration structures looks like being one of the largest "big data" projects undertaken by the regulator because it involves dissecting commission income across a range of channels.

ASIC's early market soundings have uncovered widespread anecdotal reports about the payment of "non-monetary benefits" which includes cruises and other holidays for brokers who meet certain sales targets.

ASIC is concerned that these sorts of benefits could influence the sales practices in the industry. There is unlikely to be a law banning the practice but it is hard to see them survive if the industry is serious about presenting itself as an ethical role model in financial services.

The review will "predominantly focus on the remuneration arrangements of lender, aggregator, broker and referrer and introducer staff associated with the sale of residential mortgage products".

Vertical integration in the mortgage broking industry will also be under ASIC's scrutiny. This will obviously focus on the mortgage broker businesses fully or partly owned by Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp.