Loading
Loading...

Complete Lending Solutions Est 2002

Get in touch | 0427 257 257

The great divide

The Australian Securities and Investment Commission released their updated RG209 guidelines for all credit licensees (banks, mortgage brokers, finance companies, etc).

This is the most astonishing example ASIC gave on how a lender can meet their Responsible Lending Obligations of the National Consumer Credit Protection Act 2009 (Commonwealth).

Moksha is a barrister earning more than $1,000,000 a year. She holds deposit and trading accounts with ABC Bank as well as credit products including a credit card, line of credit, overdraft facility and a home loan. ABC Bank has allocated a private banker to manage its relationship with Moksha which includes periodic reviews of Moksha’s facilities and discussions with Moksha about her banking, investment and credit needs.


Moksha decides to purchase a new home and contacts her private banker. As the private banker has access to significant amounts of information about Moksha’s financial situation, inquiries and verification are largely limited to confirming Moksha’s credit facilities with other institutions.

 

While the rich and wealthy get an easy home loan application process that may result in "sign here, get a loan" the rest are put through the mincer.

 

As ASIC states "As a credit licensee, you must decide how you will meet the responsible lending obligations".

The onus still remains on each credit licensee to minimise the risk of non-compliance.

 

It would have been beneficial to non-wealthy consumers to change lenders and get much lower interest rates and avoid the loyalty tax if the incoming lender only had to check home loan account conduct before approving the loan.

Dec 11th, 2019
Here we go again – if you are ripped off …

  Refinance. Only if it was as simple as anyone that wants to grep a media headline tells us to – yes you guest it – refinance.   The biggest hurdle is … wait for it … affordability, i.e. are you able to pass the lenders’ post Royal Commission scrut...

Loyalty Tax

  Now that we had three Reserve Bank interest rates cuts in June, July and October 2019 and banks have not passed in full the Reserve Bank cuts, the topic of the "Loyalty Tax" has surfaced.   Withhold some of the Reserve Bank rate cuts for existing loyal customers but of...

Best Interest Duty

The Morrison Liberal government’s proposed Consumer Credit Protection Amendment (Mortgage Brokers) Bill 2019 contains a new best interests duty obligation on mortgage brokers but not on lenders.   The application of this test would require mortgage brokers to ensure their conduct me...

Need Some Assistance?

  ‘Need some assistance? Speak to a Mortgage Broker’ the ad boasted.   But the best part of the ad was 'Access 3,000+ loans from over 20 lenders.'   A simple arithmetic calculation equates to an average of 150 loans per lender.   Now this...

Whinging Mortgage Brokers

Recently, there has been a lot of extra whinging from numerous mortgage brokers that the time and effort required to prepare a loan application has increased, and wait for it, wait … it is eating into their profitability.   They sight noticeable differences in the way home loans ar...

Did they not think that APRA has the last say?

On Thursday, 20 June 2019 Westpac made a bold move to reduce their serviceability assessment rate from 7.25% to 6.50% for first home buyers. APRA set a floor of 7.00% in December 2004. Late Thursday night, Westpac made an abrupt about-face back flip after incurring the prudential regulator&#39...

Responsible Lending – ASIC, Westpac and The Federal Court

The Federal Court of Australia, New South Wales | NSD293/2017 | Australian Securities & Investment Commission v Westpac Banking Corporation ACN 007 457 141.   In an opening submission on Monday, 6 May 2019 barrister for ASIC, Jeremy Clarke, SC, alleged that Westpac breached responsibl...

Oh, by the way … this is what you will not find on our website!

Experts That we are experts, specialist and have 150 years combined experience, that we partner with our clients, continually exceed expectations, we are customer focused, or our lender panel has over 35 lenders that offer more than 2,500 products.   Biggest Financial Commitment We...