Loan Application Process
Assessment cover sheet
In order for your assessment to be marked you must complete and upload all tasks and this cover sheet via the AAMC Training Group portal. Your assessment tasks must be uploaded in an electronic format i.e. Word, Excel, PDF or Scan. Please see the step-by-step instructions in your Member Area on how to upload assessments.
Student details
Course name:
Assessment name:
Loan Application Process Assessment
Surname: Given name:
Address: Postcode:
Email:
Phone (work): Phone (home):
Current occupation:
Industry: Length of service in industry:
When you upload your assessment you will be asked to confirm that your assessment submission to AAMC Training is your own work and NOT the result of plagiarism or excessive collaboration, and that all material used from any third party has been identified and referenced appropriately. AAMC Training may conduct independent evaluation checks and contact your supervisor to discuss your assessment.
Checklist of attachments:
0 Task 1 – Role Play/Assessment Skills form
0 Task 3 – Report /Written Test
0 Task 1 – Third Party signoff and supporting documents
0 Task 4 – Report /Written Test
0 Task 2 – Case Study 0 A OR 0 B
0 Task 5 – Short answers
Please indicate style of course undertaken:
0 Face to face Trainer’s name: 0 Correspondence 0 Online
Once your assessment has been successfully uploaded it will be pending review with your nominated course assessor. Your assessor will mark your assessment and you will receive an email advising you if you have been assessed as satisfactory. If you are marked as not yet satisfactory you will be contacted and asked to provide additional information or re-visit the assessment and re-upload your amended case study or written tasks.
Please contact our head office if you need assistance with your assessment:
Office: +61 8 9344 4088 Fax: +61 8 9344 4188 Email: info@aamctraining.edu.au
Written Assessment
The assessment tasks contained herewith; relate to the following units of competency:
• FNSFMB401A Prepare loan application on behalf of finance or mortgage broking clients;
• FNSFMB402A Provide finance and mortgage broking services
• FNSFMB403A Present broking options to client
• FNSINC402A Develop and maintain in-depth knowledge of products and services used by an organisation or sector
• FNSFMB501A Settle applications and loan arrangements in the finance and mortgage broking industry
• FNSCUS501A Develop and nurture relationships with clients, other professionals and third party referrers.
• FNSCRD301A Process applications for credit (this unit only applicable to those completing the Certificate IV in Finance and Mortgage Broking FNS40811 course).
Task 1: You are required to have a third party to observe this role play in a simulated environment. You will need to provide the observer/third party declarer with the role play guidelines and marking/sign-off sheets to ensure they are fully conversant with what is being asked of them.
Task 2: You will notice that there are two options of Case Study within this assessment – the first (A) is more specifically for Mortgage Brokers, the second (B) for brokers in the Plant & Equipment and Motor Vehicle field. Please complete only the stream relevant to you and indicate this on the assessment cover sheet.
Either the Mortgage Finance or Motor Vehicle Equipment Checklist must be submitted with the fully completed assessment. This must encompass all documents from initial contact with the clients until settlement of the loan. Documents must be submitted in a suitable logical order and consist of all relevant NCCP documents.
The documentation required should be consistent for all submissions, however student submissions will vary in regards to outcomes based on the interpretation of the data and “client” responses during the interview process
IMPORTANT NOTE: AAMC Training only wants to see your own work. Please do not upload blank assessment tasks or instructions on how to complete same. When this extra information is uploaded it presents unnecessary work for the assessors and in turn delays our assessment responses.
Task 1: Role Play – Student skills identification
The following role play must be conducted to further determine your skills and knowledge in dealing effectively with clients. The observer must act as your chosen clients and you will be asked to explain certain parts of the application process. You must endeavour to establish rapport with the client (observer). You may also wish to write your answers down and rehearse prior to completing the role play. It is important to be prepared.
1. You may contact AAMC Training to make arrangements to assist with conducting the role play, or
2. You may arrange for an Observer/Third Party Declarer to be your “client”.
Please note that the Observer/Third Party Declarer should only comment on criteria where they have directly witnessed you performing competently during the role play. Therefore you should not expect them to make assumptions about your competence. Do not pressure a third party to sign a supporting statement if she/he has not had the chance to observe your role play.
Submit the competency checklists duly signed by your Observer/Third Party Declarer and their supporting qualifications/resume for the role play you have undertaken.
INFORMATION FOR OBSERVER/THIRD PARTY DECLARER
The candidate is seeking a supporting statement from you as part of the evidence they are compiling in order to complete the requirements for a vocational education qualification. You are to act as the client mentioned in the chosen case study. You will be assessing the candidate based both on their clear explanation of the questions and ability to build rapport with the client. Feedback comments for each point are required.
The Observer/Third Party Declarer must be someone who possesses sound financial services industry (credit activities such as finance/mortgage broking) experience/knowledge in order to provide support to you during the role play. It is also important that the declarer has a good understanding of current industry legislation and procedures relating to:
• Providing finance and/or mortgage broking services in credit activities
• Presenting broking options to clients
• Develop and nurture relationships
The Observer/Declarer may be one of the following and will be required to signify the finance/mortgage broking experience achieved and/or the qualifications held on the Skills Assessment (Role Play) form:
• A holder of a Certificate in Finance and Mortgage Broking or Diploma of Finance and Mortgage Broking Management (you will need to hold an equivalent or higher qualification, depending on which course the candidate is undertaking)
• An Accountant/Financial Planner with credit activity experience
• An Australian Credit Licence holder/ Responsible Manager for an ACLH
• A Business Development Manager with a Bank, Building Society or Credit Union involved in Third Party (Broker) lending.
• A nominated Mentor with the appropriate authorisation from an industry association or ASIC.
The candidate is seeking a Supporting Statement from you as part of the evidence they are compiling in order to complete the requirements for a vocational education qualification. You are to act as the “client” mentioned in the chosen case study. You will be assessing the candidate based both on their clear explanation of the questions and ability to build rapport with the client. Feedback comments for each point are required.
A copy of your qualification/resume is required, along with a short detail of your industry experience.
Skills Assessment Form
Participant’s name:
Performance criteria to be addressed S
NYS Comments (you may use an additional sheet)
1. Introduce yourself to the client and explain the finance and mortgage broking process to the client in a clear and unambiguous way with the background, credentials and role of the broker clarified to build rapport.
Explain the services, values and capacity of the organisation/your business to the client including procedures for complaints handling and resolution (Refer to Credit Guide).
Seek consent from the client that they are happy to proceed with utilising your services.
2. Determine client’s existing financial situation. Ask a couple of random questions from the fact client needs review/fact find.
Explain the purpose and requirement of collecting personal information from the clients to begin determining their personal and financial situation. Ask the client for their consent to collect and use this information (via privacy consent form).
3. Ask the client the following questions:
• Are they capable of reading and understanding the documents presented from all parties involved in the transaction?
Explain why this is important?
• Do they have any other special needs to be considered?
4 Explain to the client why it is important to review all information above to ensure suitable products are presented/recommended (preliminary assessment).
5 Present product/s and features of the product to the client from your selected options in the case study. The assessor must ensure the information is presented clearly and unambiguously with recommendations clearly and comprehensively discussed. Please highlight any strengths, weaknesses, benefits and risks.
Ensure all fees, charges and commissions are clearly explained.
6 The client has raised a concern about the interest rate for the product you have chosen.
How would respond and what alternatives would you offer?
Explain why is important to encourage the client to make an informed choice from the information presented?
7 Please clarify with the client any further concerns and/or issues. Explain/discuss/agree on implementation actions (gain commitment to proceed)
S = Satisfactory NYS = Not Yet Satisfactory. If you deem the student to be Not Yet Satisfactory, please arrange to repeat the assessment. Should you have any concerns please contact AAMC Training +61 8 9344 4088.
An AAMC Training assessor may contact the Third Party Referrer to review and discuss this process.
Additional observer/third party declarer comments:
Did the finance broker act professionally and in accordance with legislative, regulatory and professional codes of practice? 0 Yes
0 No
Did the finance broker establish the client’s needs by using questioning and active listening, apply a good level of communication, negotiation, interpersonal and relationship management skills? 0 Yes
0 No
Did the finance broker present the information clearly, effectively and unambiguously (no use of jargon), with recommendations comprehensively discussed and negotiated? 0 Yes
0 No
Did the broker consider any special needs of the client including cultural, language, race, religion, ethnic origin, socioeconomic status and demographic needs? 0 Yes
0 No
Observer/Third party declarer details
Title 0 Mr 0 Mrs 0 Ms 0 Miss 0 Other:
Name:
Address:
Suburb: Postcode:
Phone (Mobile): Phone (W):
Email:
Relationship to student
SELECT ONE OF THE OPTIONS WHICH REFLECTS YOUR
EXPERIENCE/
QUALIFICATION:
Please provide a copy of your qualification, resume or mentor authorisation as you specified. A holder of a Certificate IV in Finance/Mortgage Broking OR
A holder of a Diploma of Finance and Mortgage Broking Management 0 Certificate attached
An Accountant/Financial Planner with Credit activity experience 0 Resume attached
An Australian Credit Licence Holder and/or a Responsible Manager for an Australian Credit Licence Holder 0 Resume attached
A Business Development Manager with a Bank, Building Society or Credit Union involved in Third Party (Broker) lending (Consumer or Commercial) 0 Resume attached
A nominated Mentor with the appropriate authorization from an industry association or ASIC 0 Mentor authorisation
Observer/declarer feedback Did you feel you were given enough information and supported through the process of undergoing this assessment? 0 Yes 0 No
Did you feel the resources provided were suitable for your workplace? 0 Yes 0 No
Do you think the assessment was relevant to this particular qualification’s training needs? 0 Yes 0 No
The information and comments provided above are true and correct.
Observer/Third party declarer signature ……………………………………………………….
Date ……………………………………….
Task 2: Case Study – Loan application preparation
You will notice that there are two options of Case Study within this assessment – the first (A) is more specifically for Mortgage Brokers, the second (B) for brokers in the Plant & Equipment and Motor Vehicle field. Please complete only the stream relevant to you and indicate this on the assessment cover sheet.
Choosing one of the case studies presented below, prepare a loan file from contact with the clients to preparing the loan application for lodgement with the client’s lender of choice.
In completing this task, you need to demonstrate to your assessor that you are competent in the following areas and able to:
• communicate ideas and information
• collect, analyse and organise information
• plan and organise activities
• work with others in a team
• use mathematical ideas and techniques
• solve problems by providing solutions
• use technology.
To do this you will need to compile a report (Client Needs Review/Fact Find) indicating your thoughts and processes on different aspects of your application. These may include, but are not limited to:
• the choice of loan product for your client and the information about the loan product that you presented to them. Where you located the product information. Remember there is no right/wrong answer to this area, it is always subjective.
• the use of technology to compare the product/fees, find information on the products etc.
• how you would work in a team situation with your co-workers, lenders, real estate agents, mentor etc.
In areas where you do not have copies of actual supporting documentation, insert a page with the name of the document you would include e.g. copy of driver’s licence for the client.
There are a number of templates in the Member’s Area under ‘Useful Resources’ that you could use in your submission.
Remember there is no right or wrong answer as each client you see presents a new challenge and if you can provide solutions for those challenges you will be well regarded and successful in this industry.
Because this course is taken nationally, we ask that you localise addresses and places of employment so that you can have familiarity with the assessment.
You will have to take into account any necessary adjustment of stamp duty concessions for first home buyers. This will have to be considered when discussing and setting out the fees and costs with your clients. You will have to contact your Office of State Revenue to determine the correct amount of benefits to which your clients are entitled.
CASE STUDY ASSESSMENT OPTIONS:
1. If you are in a State or Territory that FHOGs are available to both forms of home purchasing choose either an existing or new home acquisition for your case study (you do not have to complete one of each).
2. If you are in a State or Territory that only offers a FHOG on new and not established homes you will have to choose that option for a case study.
If at some later stage the FHOGs rise or fall, please adjust the applicable purchase prices to cater for those changes as this task forms an important part of the assessment process and must be completed.
Client statement of position
Referred by: Peter Michael Consultant: Ian Harris
Date: 27/10/20XX Source:
Accountant- 3 Smith St, Nth Sydney-
Ph 02 94250000
Applicant 1: Mr/ Mrs/ Ms/ Miss Applicant 2: Mr/ Mrs/ Ms/ Miss
Surname: Smith Surname: Smith
First name: Billy First name: Lisa
Date of birth: 21/10/62 Date of birth: 13/06/67
Address: 1 Joseph Street Address: 1 Joseph Street
Huntingdale NSW 2132 Huntingdale NSW 2132
Phone: 02 93850000 Phone: 02 93850000
Mobile: 0417000000 Mobile: 0418000000
Business: Business: FSR Consulting Pty Ltd
Occupation: Storeman Occupation: Consultant
Business gross profit: Business gross profit: $168,527 (Est. 20XX)
Income-gross-net $82,003 $54,762 Income-gross-net $54,086 $37,381
Current lender:
ANZ
FSR bank detail Westpac 032 000 123456
Estimated market value: $540,000
Mortgage balance:
$100,000
Payment: $933.00 Mthly/Fortnightly/Weekly
Years to run: 4 Interest rate: 7.05%
Asset
values
$ Liabilities amount owing $ Monthly payments
$ Lender
Existing properties:
1. 540,000 100,000 933.00 ANZ
2.
Motor vehicles:
2002 Holden Ute 22,000
Credit card (1) Limit $5000 1,000 150.00 ANZ
(2) Limit $10000 3,000 300.00 Citibank
Overdraft
Personal Loans:
Superannuation: Mr 160,000
Mrs 230,000
Insurances: Mr Mrs
Life: y/n 400,000 300,000 700,000
Trauma: y/n 100,000 50,000
Income prot. 61,502 40,564
Wills: y/n
Power of attorney: y/n
FSR Consulting Pty Ltd
ABN: 91 765 432 100
ACN: 7654321
Detailed Profit and Loss Statement
for the period ended 30 September, 20XX
(unaudited)
30/09/20XX
$ 30/06/20XX
$
Income
Contract receipts 44,078 154,186
Total income 44,078 154,186
Expenses
Accountancy 170 620
Bank fees and charges 6 83
Computer expenses 0 290
Depreciation – M/V 93 350
Entertainment expenses 0 144
Home office expenses 0 99
Hire/rent of plant & equipment 0 769
Insurance 476 1,027
Internet expenses 164 1,230
Motor vehicle expenses 763 3,050
Parking 66 168
Printing, stationery and postage 0 253
Professional library 0 229
Repairs and maintenance 320 0
Replacement sundry equipment 166 142
Salaries and wages 20,000 58,000
Staff training 0 361
Superannuation contributions 1,800 3,870
Telephone 45 81
Travelling expenses 0 7
Total expenses 24,069 70,773
Net Profit 20,009 83,413
FSR Consulting Pty Ltd
ABN: 91 765 432 100
ACN: 7654321
Detailed Balance Sheet
as at 30 September, 20XX
30/09/20XX
$ 30/06/20XX
$
Current assets
Shareholders loans 111,837 89,878
Total current assets 111,837 89,878
Non-current assets
Plant and equipment 2,197 2,197
Less accumulated depreciation (443) (350)
Total non-current assets 1,754 1,847
Intangible assets
Formation expenses 1,142 1,142
Total assets 114,733 92,867
Current liabilities
GST owing 4,271 4,423
PAYG tax payable 7,040 5,031
Total current liabilities 11,311 9,454
Non-current liabilities 0 0
Total liabilities 11,311 9,454
Net assets 103,422 83,413
Shareholders equity – retained profits 103,422 83,413
Fantastic Nissan
ACN: 009 071 444
ABN: 47 009 071 444 TAX INVOICE
To:
Lisa Smith
FSR Consulting Pty Ltd
For delivery to:
Lisa Smith
FSR Consulting Pty Ltd
INVOICE DATE INVOICE/STOCK NO NEW/USED VEHICLE MAKE MODEL REGISTRATION NUMBER
17/10/20XX
1425361
NEW
NISSAN
X-TRAIL T1 AUTOMATIC TBA
ENGINE NUMBER CHASSIS NUMBER
COMPLIANCE DATE COLOUR
CONTACT
ORDER NUMBER
QR25230948
JNITBNT30A0044491
2009
TWILIGHT
CLINT NESBITT Due on receipt
QUANTITY DESCRIPTION AMOUNT
1
Nissan X-Trail
Window Tint
Genuine Tow Bar
Dash Mat
Floor mats
Rear Cargo Tray
Full tank
Pre Delivery $34,718.18
450.00
450.00
Included
Included
110.00
Included
995.00
Sub Total 36,723.18
GST 3,672.32
Stamp Duty 2,379.00
Registration 535.00
Total Price $43,309.50
Total amount payable $43,309.50
Make all cheques payable to Magic Nissan
ABC
ABC Financial Services
ACN: 91 987 987 987
ABN: 04 791 987 987 TAX INVOICE
Date: October 29, 20XX
INVOICE 78
To:
Macquarie Leasing Pty Ltd
GPO Box 5435CC
Melbourne VIC 3001
DESCRIPTION AMOUNT
Upfront broking commission – Chattel Mortgage FSR Consulting Pty Ltd
$ 300.00
Sub Total 300.00
GST 30.00
Total price 330.00
Payments/credits 0
Balance due $ 330.00
Make all cheques payable to ABC Financial Services
Thank you for your business!
AAMC TRAINING DOCUMENT CHECK LIST
CERTIFICATE IV LOAN APPLICATION PROCESS ASSESSMENT
MORTGAGE FINANCE
MUST BE COMPLETED & INCLUDED IN YOUR UPLOADED ASSESSMENT
EVIDENCE ENCLOSED
Y N N/A
1. A fully completed AAMC Training Assessment Cover Sheet 0
0
0
2. A completed Skills Assessment /Role Play declaration 0
0
0
3. Evidence of qualifications and experience of Third Party Declarer/Observer 0
0
0
4. File notes from 1st Contact to Settlement in chronological order 0
0
0
5. Licensed Credit Guide or Authorised Credit Representative Profile 0
0
0
6. Client Needs Review or Fact Find 0
0
0
7. Authority to act and Privacy Consent form 0
0
0
8. Combined Credit Proposal and Quote 0
0
0
9. Lender Product Comparison sheet (at least three options) 0
0
0
10. Preliminary Assessment 0
0
0
11. Costings sheet for Fees and Charges 0
0
0
12. Fully completed Loan Application or Copy of Online lodgement 0
0
0
13. Lender’s loan Document Check List (Normally forms part of loan application) 0
0
0
14. Notes to lender detailing your comments on the clients’ background and requirements and Process Applications for Credit (Mortgage Finance) Refer to Learning Guide Module 2 -Section 7. (TASK 3) 0
0
0
15. A completed serviceability calculator (refer to useful resources) 0
0
0
16. Evidence of Income (Pay slips, Employers Letter, PAYG Summaries) 0
0
0
17. Evidence of an Offer & Acceptance or a Contract of Sale or a Purchase contract 0
0
0
18. Evidence of Council approved plans (House and Land , Off the Plan packages) Plus a Fixed Price Building Contract 0
0
0
19. Evidence of savings/ equity and other loan commitments 0
0
0
20. First Home Owners’ Grant application (These can be downloaded from your Office of State Revenue) 0
0
0
21. Anti Money Laundering/Counter Terrorism Financing ID requirements 0
0
0
22. Settlement Pack: Conditional Approval through to settlement. Refer to Useful Resources (Members’ Area) to download the Settlement Pack which you are required to fill in with the details of your case study clients. 0
0
0
23. A Compliance file Checklist 0
0
0
24. A completed Broker Customer File Checklist 0
0
0
25. TASK 5: You are required to prepare your data-base on contacts made from this transaction by using your internal CRM or a suitable program i.e. Excel. 0
0
0
26. TASK 5: Short Answer Questions 0
0
0
NB: Where evidence is required i.e. payslip/offer & acceptance/financials etc., AAMC Training will accept the evidence being typed on a blank piece of paper rather than supplying copies of the required evidence.
For example: “This represents the payslips for Frederick John Everybody for the periods ending 14th and 28th February 2015.”
A sample of the forms mentioned above can be found in the AAMC Members’ Area under “Useful Resources” (www.aamctraining.edu.au)
AAMC TRAINING DOCUMENT CHECK LIST
CERTIFICATE IV LOAN APPLICATION PROCESS ASSESSMENT
MOTOR VEHICLE & EQUIPMENT
MUST BE COMPLETED & INCLUDED IN YOUR UPLOADED ASSESSMENT
EVIDENCE ENCLOSED
Y N N/A
1. A fully completed AAMC Training Assessment Cover Sheet 0
0
0
2. A completed Skills Assessment /Role Play declaration 0
0
0
3. Evidence of qualifications and experience of Third Party Declarer/Observer 0
0
0
4. File notes from 1st contact to settlement in chronological order 0
0
0
5. Licensed Credit Guide or Authorised Credit Representative Profile 0
0
0
6. Client Needs Review or Fact Find 0
0
0
7. Authority to act and Privacy Consent form 0
0
0
8. Combined Credit Proposal and Quote 0
0
0
9. Lender Product Comparison sheet (at least three options) 0
0
0
10. Preliminary Assessment 0
0
0
11. Costings sheet for Fees and Charges 0
0
0
12. Fully completed Loan Application or Copy of Online lodgement 0
0
0
13. Lender’s loan Document Check List (Normally forms part of loan application) 0
0
0
14. Process Applications for Credit.
15. Refer to Learning Guide Module 2 -Section 7. (TASK 3) 0
0
0
16. A completed serviceability calculator (refer to useful resources) 0
0
0
17. Evidence of Income (Pay slips, Employers Letter, PAYG Summaries) 0
0
0
18. Evidence of last 2 years Financial Statements and Tax Returns with annual variances explanation. If Borrower/s self-employed or company, with income worksheet 0
0
0
19. Evidence of the Offer To Purchase/Suppliers Sales Tax Invoice showing serial numbers etc, to identify title 0
0
0
20. Evidence of Motor Vehicle Registration Papers (Some lenders require this information) 0
0
0
21. Evidence of Trade-in equity, Cash Contribution (Receipt) and other loan commitments 0
0
0
22. Anti Money Laundering/Counter Terrorism Financing ID requirements 0
0
0
23. A Compliance file Checklist 0
0
0
24. A completed Broker Customer File Checklist 0
0
0
25. TASK 5: You are required to prepare your data-base on contacts made from this transaction by using your internal CRM or a suitable program i.e. Excel. 0
0
0
26. TASK 5: Short Answer Questions 0
0
0
NB: Where evidence is required i.e. payslip/offer & acceptance/financials etc., AAMC Training will accept the evidence being typed on a blank piece of paper rather than supplying copies of the required evidence.
For example: “This represents the payslips for Frederick John Everybody for the periods ending 14th and 28th February 2015.”
A sample of the forms mentioned above can be found in the AAMC Members’ Area under “Useful Resources” (www.aamctraining.edu.au)
A sample of the forms mentioned below can be found in the AAMC Members’ Area under “Useful Resources” (www.aamctraining.edu.au)
1. Financial Services Credit Guide/Credit Guide Along with the ACR’s profile this guide is handed to the clients at initial interview and it sets out the services that are offered along with the Privacy Policy of that organisation and the complaints procedure.
2. Authority to Act & Privacy Consent Form The authority to act allows the finance broker to act on behalf of the client when dealing with the lender and other related parties to loan. The privacy consent form allows the finance broker to store and use relevant client information to assist in the loan application process without breaching privacy laws. This will most likely be contained in the credit proposal (mentioned below).
3. Authorised Credit Representative profile This form is which sets out the Authorised Credit Representative’s profile and authority to act on behalf of a credit licence holder and what products the ACR can introduce to under that authority. At initial interview the clients must be handed a copy. This may be an addendum to the Credit Guide.
4. Data Collection – Business or Personal Consumer Client Needs Review/fact Find By using a Client Needs Review/Fact Find you will have all the information required to form an opinion as to what type of loan best suits the clients’ requirements. At the same time you are acting with due diligence in asking the clients questions about their financial security in the event of an unforeseen circumstance that causes financial hardship. You have a legal obligation to yourself and the clients to make them aware of the ramifications of an unexpected illness, accident or even death. By signing a Client Needs Review they can accept your offer of a referral to an insurance professional or alternatively decline your recommendation, thereby you have documentary evidence of your professionalism. You do not have to sell Risk Products but you have complied with the requirements under the Duty of Care by having adopted the above actions.
5. Costing sheet for fees and charges Estimate of total fees and charges payable to the financier in relation to applying for the finance will form part of the credit proposal. However the broker may want to complete a cost analysis to determine savings or equity versus costs associated with the purchase and finance. This is not a requirement of the submission but may rather be a process you may want to adopt for purchases.
6. Interview notes A file copy of your interview notes will go a long way to avoid any adverse opinions from any audit that may be undertaken by any aggregator company or ASIC official. Whilst documents required under NCC such as a fact find/client needs review, preliminary assessment and credit proposal will highlight requirements and recommendations they may cover all conversations/ time lines between the broker and client.
7. Preliminary Assessment Based upon your enquiries as to the financial situation, requirements and objectives of your client you are required to conduct a preliminary assessment to determine whether the proposed credit contract/lease is ‘not unsuitable’ for the client. This must be done prior to suggesting the client applies for, or providing assistance applying for a particular credit contract.
8. Credit Quote and Credit Proposal Documents These forms may be incorporate into the one document.
The Credit Quote outlines the maximum fees and charges payable to the credit representative and licensee for credit assistance. Must be provided before credit assistance is provided.
The Credit Proposal document outlines the fees, charges and commissions relating to the particular credit contract or consumer lease and to whom/by whom they are payable.
9. Statement of Credit/Mortgage Advice
This is the document the client signs giving the Authorised Credit Adviser authority to act on the client’s behalf and also give privacy consent for the personal details to be passed onto the lending institution. It also advises the amount of commission a broker will receive as well as the costs involved in taking out the loan. A copy of this appointment must be given to the client and a copy kept on your file. This document may be a combination of industry known documents as stated above and not required if you have completed credit proposal and credit quote
10. Evidence of income Lenders require documentary evidence of income to support a loan application. Verifying employment may be in the form of two or three consecutively dated payslips plus a PAYG summary that indicates regular overtime or allowances/commissions. A letter or employment contract from the employer will also suffice in the absence of payslips. Other income will require documentary evidence as determined by the lender.
11. Self-employed/ Commercial clients A copy of the last two years individual’s and company tax returns/financial statements along with a serviceability assessment for self-employed individual/partner.
12. Signed statement of assets & liabilities (SOP) This information allows lenders to readily ascertain the financial standing of the applicants.
13. Cash flow forecast When you are arranging funding for the larger type loans, whether it is for plant and equipment or say, a commercial factory unit a Cash Flow Forecast is essential as it will assist the lender in appreciating where the business is headed. But remember it will have no bearing on the lender’s decision-making as it will look only at anecdotal evidence.
14. Serviceability When submitting an application you are to include a Serviceability Assessment sheet which shows the lender you have ensured the clients can afford the loan. You will find these assessment tools form part of the lenders’ online broker toolkit and are relatively simple to use.
When you undertake your accreditation training each lender will provide the facility or you will have access to all the tools through your aggregator.
15. Copy of the Offer and Acceptance (WA) or Contract of Sale Lenders need a copy of the completed O&A or COS to verify the purpose of the loan and for the ordering of valuations, if required. You will be advised of their requirements when you complete the accreditation courses. It is also worth noting that some lenders will only carry out a kerb-side valuation when the LVR is 80% or less.
16. First Home Owners Grant application Whilst the Federal Government provides the funding for these concessions each State and Territory Government administers the schemes. Therefore so your clients can get the maximum benefits available, your task is to research this area of funding thoroughly by visiting the Office of Revenue in the jurisdiction in which you operate.
These forms are to be completed to accompany your case study files.
17. First Home Buyers Stamp Duty Concession application As explained above there are variances in what concessions are available. However notwithstanding the fact that in some areas solicitors/conveyancers or settlement agents handle this aspect of the transaction, we at AAMC believe it is up to the Broker to ensure that there is a smooth settlement transition. This will happen if the Broker provides the clients with the necessary paperwork, has it completed correctly and keeps it on file for presentation to the correct parties when settlement is due to take place.
18. Fully completed loan application Let us first accept that all lenders require the same information, however with the layout of their application forms it just appears in different places. You are not only expected to provide the clients’ full personal details, but you are obliged to be honest and frank about the information you are submitting. As a Broker you are also obliged to inform either the lender or the client of any information of which you become aware that may have a material effect on the transaction. If you do not follow this principle you could well become the subject of legal action from either party.
The application forms are quite simple to complete provided, however, you have gathered all the information to make it a simple task.
There is one area on confusion and that is the completion of the “Declaration of Purpose”. By completing this incorrectly you may jeopardise your clients’ rights under the National Consumer Credit Protection CT 2009.
19. Notes to Lender/ Lenders when assessing a loan rely heavily on information provided. They do not have the privilege of sitting down and interviewing the clients. As you have already learnt, Brokers must provide as much information as possible when submitting a loan application, of any nature, to ensure a fair and reasonable decision can be made by the lender.
Therefore it is in everybody’s interests to highlight valid points in a Cover Sheet. Shown below this table are two options that tell a tale. Please do not just copy these examples and submit – use your initiative and present a cover sheet along similar lines as we have demonstrated.
There will be many and varied reasons why you think an application should be approved so let the lender share your reasons. Don’t make them second guess.
If you follow this path, it will stand you in good stead with the lenders and exhibit a standard of professionalism that unfortunately not enough Brokers take seriously. Half measures or the attitude “Close enough is good enough” does not wash in today’s competitive economic climate. Lenders that receive half-baked applications will put them to one side and get on with the fully detailed ones to acknowledge the correct presentation.
20. Lenders/Broker document checklist All lenders have a checklist to ensure you have submitted the application correctly with all the supporting documentary evidence. Please ensure this is completed.
21. Lenders/Broker document checklist Due to criminal activities and money laundering you have to provide the necessary identifying documents to support the application. Where you are dealing with a client’s existing lender, note on your cover sheet that you haven’t supplied the information because client is known to the lender.
Some lenders carry out their own verification through their branch network.
22. Business Registration/ Constitution and/or Trust Deed Business registration legitimises the authenticity of the applicant.
The Constitution and/or Trust Deed reflect the authority of those able to act for and on behalf of the company.
Task 3: Process Applications for Credit
You are required to demonstrate that you understand the lenders policy and procedures for processing an application for credit i.e. from the point of view of a lenders credit analyst. Once your loan application is ready to be submitted you must provide supporting evidence that you have:
• Checked and verified application details including all information to support the application are in accordance with the lenders credit policy and procedures.
• Your assessment decision to recommend the credit application refers to/is within the lenders policy and procedures.
• Maintaining application records and completing necessary documentation are according to the lenders legislative requirements and lenders organisational policy and procedures.
Overall, to support your understanding of how an application for credit is processed by the lender; you are required to complete research and provide the following information which is also covered in the learning material:
• Detailed notes regarding the lender’s organisational approval policy and procedures for the chosen product in your selected case study. Briefly explain why the loan met the policy guidelines and how you researched the product and the guidelines. Including maximum LVR, serviceability ratio, minimum loan etc. If you are unable to access the lenders information readily the alternative is to access the Lender Mortgage Insurers (i.e. Genworth/QBE) guidelines which are readily available on their web pages. Although the case studies provided did not require LMI it is helpful to understand policy guidelines as many types of lenders and loans require LMI cover.
• Explain the approval guidelines i.e. who can approve/delegation; timeframes etc.
• Ensure you are adherence to relevant legislation with reference to checking and verifying application/client details and maintaining records i.e. how file and records are maintained, how movements/milestones are monitored etc.
Task 4: Completing Customer File
• A lenders cover sheet detailing the background of the applicants, structure of the loan, loan product applied for, serviceability criteria.
• Supporting documents for the loan submission as requested by the lender
Finally as a result of your client interview, completing relevant client documents and loan application for the lender; you are now required to complete the remainder of customer file supporting several of your obligations and responsibilities as a Finance Broker. These important steps being the approval process, documentation, settlement and ongoing relationship management. In areas where you do not have copies of actual supporting documentation, insert a page with the name of the document, an explanation of the document and its purpose. You would include e.g. copy of formal/unconditional approval stating conditions of settlement.
There are a number of templates in the Member’s Area under ‘Useful Resources’ that you could use in your submission.
You are required to submit your customer as determined by the chosen case study. Therefore your file information must contain the following:
1. Adding to your Interview Notes – Customer Contact Sheet/Record
You should have already documenting regular communication pre your loan submission. These interview notes incorporate all the correspondence from initial contact to loan preparation and submission. You are now required to provide interview notes from loan submission to post loan application process; with all parties specifically including:
– Customer
– Bank/s
– Referrer/s
– Government bodies, i.e. Stamp Duty, FHOG/ Revs
– Property Valuators
– Settlement Agent
2. Advice of Loan Approval
Evidence of communication with customer and other relevant parties regarding:
– Communication of formal/unconditional approval to customer i.e. lender letter of offer;
– Letter to client regarding documentation/settlement expectations;
– Communication with Real Estate Agent, Settlement Agent, etc.
3. Document Sign-Up/Settlement Preparation
– Document sign-up checklist and covering letter /communication;
– Correctly signed mortgage documents;
– Insurance details;
– Authority to disburse funds;
– Settlement checklist.
4. Advice of Transaction Completed/Finalised
– Communication of successful settlement;
– Letter/survey to client asking for client satisfaction feedback on services/support provided. You may wish to ask for referral to friends and family.
Broker/Customer File Checklist
The provision of all the information detailed below will ensure prompt issuance of your qualification. Any omissions will cause AAMC Training to seek the missing data which can prove costly to both parties. You must include this checklist in the submission of your assessment.
LENDER DOCUMENT CHECK LIST
MORTGAGE (M) AND/OR
PLANT, EQUIPMENT, VEHICLE FINANCE/COMMERCIAL LENDING (PEVC)
Type Data Enclosed
Y N N/A
M/PEVC Completed in sequence Customer Contact Sheet / Record (file notes) 0
0
0
M/PEVC Letter from broker/lender to client advising both unconditional/formal approval; noting document / settlement expectations 0
0
0
M/PEVC Valuation successfully complete 0
0
0
M/PEVC Loan/letter of offer from lender 0
0
0
M/PEVC Document sign-up checklist 0
0
0
M/PEVC Correctly signed mortgage documents/including transfer of land 0
0
0
M/PEVC Insurance details 0
0
0
M/PEVC Authority to disburse funds 0
0
0
M/PEVC Settlement checklist 0
0
0
M/PEVC Letter of successful settlement from broker 0
0
0
M/PEVC Relevant feedback from client 0
0
0
Other
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Task 5: Create a customer/referrer database
You will now prepare your database on contacts made from this transaction by using your internal customer record system or suitable program, i.e.; Microsoft Excel.
The relationships built in your case study were the clients, referrer, settlement agent and real estate agent.
Please answer the following questions in relation to your database and building/managing your business contacts:
1. Why is important to build a database of clients/referral sources?
2. Why is it important to develop professional relationships?
3. When is it not appropriate to contact a person and why?
4. Why is it important to have effective interpersonal styles and methods when dealing with clients/referrers? Why is it important to consider special needs, culture, race, religion, origin, demographics?
5. Explain why you think it would be important to follow up any business referrers as quickly as possible.
6. What methods could you use in developing new business i.e.; advertising and promotion of your services?
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