files.transtutors.com€¦ · Web viewTo assist prospective consumer borrowers in understanding exactly how much they are paying for their loan, the National Credit Code requires

Certificate IV in Finance and Mortgage BrokingAssessment Task

FNS40815

Your details:

Name: Sabin ThapaliyaAddress: 7/1 Robert Street, Artarmon, NSW 2064Phone: 0468755418Company name R2M Business GroupEmail: [email protected]

Your assessment taskYou are required to keep a copy of your assessment task for a period of 12 months. Submit your assessment to our Education Team via [email protected]

Plagiarism Statement

All assessments must be your own work and not a result of plagiarism or collaboration with other students or workmates.

AssessmentThe pass mark is 70% for each element. If you do not achieve this, you will receive feedback via your email address and be asked to resubmit your assessment for a second marking. Assignments will not be returned to you as they need to be retained for by us for verification and audit purposes.

Task Assessments TargetMark

Pass Mark

ActualMark

1 Identify and Interpret Compliance Requirements 27 182 Deliver and Monitor a Service to Customers 39 273 Contribute to OHS Hazard Identification & Risk Assessment 41 284 Manage Personal Work Priorities and Professional Development 24 165 Develop and Nurture Relationships with Clients, Other

Professionals and Third Party Referrers17 11

6 Promoting the Effective Use of Credit 15 107 Prepare a Loan Application on Behalf of Mortgage Broking

Clients64 44

8 Steps Taken by the Credit Provider 23 16

Total 250 170

Assessor’s Initials: ____________________

Assessment Date: ____________________

Copyright Mentor Education Group Pty Ltd Page 1 of 47document.docx

mailto:[email protected]

Introduction

Objective The objective of this Assessment Task is to demonstrate that you have the skills and knowledge required to conduct a client relationship and comply with statutory, industry and organization compliance requirements.

Elements to be assessed

To achieve this objective, you will need to demonstrate your ability to:

The assessment tasks in this assessment will allow you to demonstrate your knowledge and skills in relation to these elements.

Assessment process

Start by:1. Reading the Assessment Task.2. Type your answers to the assessment tasks into this template document

(hand-written answers are not accepted)3. Submit your completed document by uploading it on the ‘Ready for

Assessment’ area of www.CPDplus.com Don’t forget to keep a copy and retain it for 12 months.

Need help? If you have any questions or would like to request a digital copy of this assessment task, please email the Mentor Support Team at [email protected]

Statement of Completion

Upon successful completion of this assessment you will be awarded the Statement of Completion for FNS40811 Certificate 4 in Finance and Mortgage Broking.


mailto:[email protected]

http://www.CPDplus.com/

Task 1: Identify and Interpret Compliance Requirements

1. Identify compliance requirements

Mortgage brokers face important compliance requirements, the foremost among them being the reasonable lending provisions of the NCCP Act. The penalties for non-compliance include loss of license (for businesses) and removal from the industry (for individuals). If fraud is involved there may also be the criminal penalties of fines and / or imprisonment.

Compliance requirements are not static. It is therefore important to stay up to date with them.

Mortgage brokers also need to keep up-to-date with the actions of the regulatory authorities such as APRA and the Reserve Bank. Their actions may not amount to direct regulation, but through their effects on interest rates and bank lending these authorities can have a very direct impact on the business mortgage brokers are able to do.

(a) A key requirement of the responsible lending obligations is the ‘unsuitability test.’ What must a mortgage do to comply with the unsuitability test?

No Mark

1. Make reasonable enquiries about the borrower’s requirements and objectives /1

2. Make reasonable enquiries about the borrower’s financial situation /1

3. Take reasonable steps to verify that financial situation /1

(b) List the sorts of items a client’s requirements and objectives could include (as indicated by ASIC).

MarkThe amount of credit needed, or the maximum amount sought.

The timeframe for which it is required.

The purpose and benefit sought and whether the consumer seeks particular product features or flexibility, and understands the costs of these features and any additional risks.

/2

(c) Leading credit providers and other financial organisations have code of ethics, sometime called codes of conduct. Select one of them and summarise it by itemising its main principles.

Mark

FALSE AND MISLEADING CONDUCT – Misleading and deceptive conduct and false and misleading representations by corporations in trade or commerce are prohibited under the Australian Consumer Law (ACL). A court may impose monetary penalties, grant injunctions to prevent the prohibited conduct continuing or being repeated or to require that some action be taken such as cancellation of contracts and an award of damages. The offence also overlaps with fraud under criminal law, so fines and jail sentences may also be imposed.

/4


Sub-total /9Continued

(d) In point form, list the key information that the NCCP Act requires to be contained in a Credit Guide.

MarkThe credit guide must be in writing and include:

The licensee’s name, contact details and Australian credit licence number.

Details on any fees and charges payable by the consumer.

Details of any commissions likely to be received from the lender.

The names of the licensee’s six main lenders.

Details regarding complaint handling, including contact details of internal and external dispute resolution processes.

Information about the licensee’s obligation to provide a written copy of an unsuitability assessment upon request. Presenting a credit guide may seem a formal requirement, but it represents an opportunity to present the business to the client and describe what it can do in a positive manner. It also represents an opportunity to describe other features of the business, such as the range of services provided and the complaints handling procedures that the firm is required to have available.

/3

(e) It is important to keep up to date with compliance requirements so that the required changes can be made to organization procedures and product offerings. Suggest three sources that you can use.

Mark

1) Professional associations such as The Mortgage and Finance Association of Australia (MFAA) and The Finance Brokers Association of Australia (FBAA) inform their members of changes to requirements before they happen.

2) The professional associations’ code of practice can also be used as a sound guidance to compliance requirements.

3) larger mortgage broking organisations usually have compliance officers who assist practitioners to meet compliance standards.

/3

(f) Explain the requirement for Australian Credit Licensees to keep a training register.


MarkASIC requires a business’s compliance measures to be documented although it acknowledges that the level of documentation will vary from detailed policy and procedures manuals in larger organisations to checklists in smaller organisations. 27 -Once a compliance system has been established, it is implemented and maintained. Training has an important function in this process, but it is not enough on its own. Compliance and ethical behaviour must become a dominant value of the business

/2

(g) Explain APRA’s current attitude towards bank lending for investment properties.Mark

Australian Prudential Regulation Authority (APRA) introduced restrictions that have impacted lending for investment purposes. The banks have responded to the APRA changes by changing serviceability requirements on investor loans; making it more difficult for investors to gain finance. Borrowing capacity has been downsized, interest rates have risen and the repayments on existing debt are assessed at a much higher rate.

/2

Sub-total / 10Continued

Task 1: Identify and Interpret Compliance Requirements Continued

1.2 Interpret, analyse and prioritise identified

Some of the compliance requirements are difficult to meet. Unfortunately, also there have been some ‘rogue’ mortgage brokers who have failed to comply – to the disadvantage of their clients.

The finance planning industry has been plagued by non-compliance in the largest planning groups, with the image of the industry being substantially tarnished as a


compliance requirements

result. It may not suffer greatly because of the absence of an alternative source of financial advice.

This is not so with mortgage brokers. They are just establishing their reputation and consumers always have alternative of going to the lenders directly.

(a) Select three tasks you perform on a regular basis that are subject to compliance requirements.

No Mark1. Find a lender /12. Complete the loan application /13. Submit the loan application to the bank or other loan provider, and wait for them to

approve it /1

(b) Identify the compliance requirements that are relevant to the three tasks selected, indicating the name of the relevant legislation, regulation or code of conduct.

No1. ASIC /1

2. Australian Consumer Law /1

3. The National Consumer Credit Protection Act 2009 /1

(c) How does your organisation monitor your compliance?

MarkCarrying out audits and monitoring on compliance areas and procedures is both an essential business function and an ASIC regulatory requirement. The only way to ensure that processes work is to audit them and assess the results, carrying out gap analysis and reviews on a frequent and rolling basis.

/2


Total /27


Task 2: Deliver and Monitor a Service to Customers

2. Identify customer needs

The relationship with a client is generally described as beginning with the establishment of empathy. In other words, it is first necessary for a mortgage broker to establish that he / she is truly interested in the client and the client’s needs. It is only after that that the mortgage broker has established the right to interview a client.

(a) Use the internet or any other source to find a definition of empathy.Mark

The ability to share someone else's feelings or experiences by imagining what it would be like to be in that person's situation.

/1

(b) List three open-ended questions that assist in developing empathy with a client? How do such questions indicate empathy?

No. MarkWhat makes you think it may be time for a change?

So, what’s going on?

How’s business?

/2

Open Questions provide information about needs and wants, and this is information that any mortgage broker must have.

/1

(c) List and explain the steps involved in an ‘active listening approach’.

MarkASK QUESTIONS – Find out about needs and wants of the client. /1

GO BACK – Restate what the client has said about his or her needs to be sure the relevant details have been heard and understood and to encourage the speaker to proceed further. The client’s thoughts and feelings can then be used as a lead-in to further questions.

/1

SUMMARISE – to make sure both sides agree on the facts. /1

(d) How is client service commonly monitored in your organisation? What are the two possible outcomes?

No. Mark1. Capture all of your customer feedback channels. Apply the same quality standard

that is used for calls to text-based interactions like email and chat.Listen to your customers by monitoring interactions.

/1

2. 1) By monitoring quality across multiple channels, organisations can learn from our /2


customer interactions, leading to better decision making, service and processes. The monitoring, measuring and managing of performance and service quality must remain a priority, but the “voice of the customer” analytics, across multiple channels, is just as important.

2) By adopting the view that quality monitoring is a strategic process rather than a tactical one, organisations will begin to see an improvement of our customers experience and our customers therefore becoming our strongest champions.

Sub-total /10

Continued

Task 2: Deliver and Monitor a Service to Customers Continued

2.1 Deliver a service to customers

In a survey on the reasons for referrals conducted by David Maister, only 10% were due to the quality of technical work. The remaining 90% of referrals were due to the quality of service.

This indicates that the key to maintaining client relationships and gaining referrals is the provision of outstanding service. This has been described by Maister as ‘over-servicing’.

(a) Describe three ways in which a mortgage broking organisation can attempt to ‘overservice’ clients?

No. Mark1. Ask clients for more, more often. When there is ‘scope creep’, project costs need to

be renegotiated./1

2. Invest in your business tools and automation – job management solutions, benchmarks and a dashboard, which will allow you to track and monitor results. Remember you can’t manage what you can’t measure! You ultimately need live, up-to-the-minute data to manage time and stop over-servicing in its tracks.

/1

3. If an opportunity has potential for showcasing your work – invest time to enter industry awards; and also client industry recognised events.

/1

(b) How would you keep a client informed about the progress of an application as it passed through a creditor provider’s hands? What approximate timing might be involved?

No. Mark1. At this stage, for the first time after submission of the application to the lender, the

mortgage broker is once again involved. This is because the mortgage broker is responsible for ensuring that the product being offered by the lender is consistent with the requirements of the client. This follows from the fact that mortgage brokers have primary contact with the client and as such are responsible for breaches of the responsible lending provisions of the NCCP Act. Brokers should also be

/2


prepared to take borrowers through the contract to ensure that they understand their obligations, particularly relating to repayments and the conditions that apply in the event of late repayment. Special conditions such as redraw facilities should also be explained, and the borrower should be left with an understanding of all fees that apply

2. The time lapse between interviewing the client and forwarding the credit application to the credit provider, along with the advice to the client, should not be longer than two days. It is important that the information should be passed on to the credit provider in a timely manner. The key word is promptly, as soon as practicable after completion of the preliminary assessment – on the same day if possible.

/2

(c) Describe how you might attempt to resolve conflicts with clients.Mark

Recognise the situation that is developing and immediately change the pattern by developing a non-aggressive approach. Then change the situation from an adversarial struggle to a situation in which both sides can win. This is commonly referred to as a “win win” situation.

/2

(d) How do you can prepare clients for the hiccups that can happen while their credit application is being processed

MarkProvide the borrower with interim updates, if practicable- Do not ask the borrower to provide unnecessary information, particularly information that is not strictly relevant or which the lender already has in its possession

/2


(e) The chapter on Operating a Mortgage Broking Business contains an example suggesting that a mortgage broker acting in the best interests of clients should act as a Protector rather than an Expert. What are the implications for this in regard to (i) advice given to clients and (ii) recommending the most suitable loan products?.

No. Mark1. New products are introduced from time to time, and features of existing products

may change. Mortgage brokers need to be alert to any information regarding change from product providers, with information being disseminated through such means as team meetings and seminars

/2


2. Brokers should also be prepared to discuss the different products with theirs clients and point out their different features so that an informed choice can be made.

/2

(f) How could you prepare yourself to deal with client concerns?Mark

Sometimes it exists in the form of concerns about the broker or reistance to product terms such as the interest rate. At other times it takes the form of a more formal complain. Either way, there is reistance that needs to be overcome as best as possible. Once the need for a win win situation is recognised and a more normal conversational tone and speech pattern have been adopted, if that is required, the challenge is to make the win win outcome happen.

/2

(g) Give examples of the following legal breaches: breach of the duty of care, false and misleading conduct, unconscionable conduct & conflict of interest without disclosure.

No. Mark1. A broker owing a customer a duty if their negligence results in them tripping over a

piece of carpet. Likewise, they owe a customer a duty of care if advice that is negligently provided causes them financial harm.

/1

2. A situation there may also be more fraudulent activity such as providing a false occupation and forging documentation.(false and misleading conduct)

/1

3. The Business not giving the applicant enough time to, read an agreement, ask questions or seek advice; and not disclosing or explaining the key terms of a contract. (unconscionable conduct)

/1

4. Conflict of interest is where a mortgage broker recommends a specific financial product because it allows them to obtain a larger commission, even though the product is unsuitable for their client.

/1

(h) Once a desirable market segment has been identified, a mortgage broking business can put its mind o developing suitable marketing strategies. List examples of different strategies that might be used.

MarkBy working with ideal clients, brokers are more likely to have the level of concern that is an essential quality of professionalism. They are also more likely to develop the communication with clients that leads to “engagement” – that is, a longer-term relationship that comes from personal connection.- Look at your own ethnic and social background, the types of people you grew up with and the types of people you went to school with. Considerations such as this should lead you to the types of people you prefer to deal with. Likewise, it may be that you are the sort of professional that they prefer to deal with.

/2



(i) What steps can be taken to keep up to date with product changes and ensure that this knowledge is properly disseminated?

MarkSubscribe to online news letters such as Mortgage Choice, ING Direct,

Brokernews.com.au etc-All up to date news on product changes can be e-mailed to all staff then presented at meetings.

/2

(j) What are the procedures for dealing with client complaints in your organisation?

MarkListen to the complaint. Accept ownership of the problem. -Be understanding. Remember, the person is complaining about your business, not about you personally. -Record the complaint. -Make sure you have all the facts. -Discuss options for fixing the problem. -Keep your promises. -Be quick.-Follow up.

/2

(k) What normal protocols should for protecting the confidentiality of client files?

MarkAs all client information is confidential, all client records will be stored in a secure environment at all times. Only authorised staff will have controlled access to client information/records. Client records are the property of the organisation, but clients may have supervised access to their own records following written a request, either by mail or electronically, and authorisation by the general manager, independent living services.

/2

Sub-total /6 Total /39


Task 3: Contribute to OHS Hazard Identification & Risk Assessment

3. Contribute to workplace hazard identification

Occupational health and safety hazards are often considered only in terms of physical injury, perhaps the result of working with heavy machinery, working in an excessively noisy environment, or slipping or falling. Just as relevant, however, is work-related stress. This describes the physical, mental and emotional reactions of workers who perceive that their work demands exceed their abilities and/or their resources (such as time, help/support) to do the work.

For the questions that follow, please read ‘Overview of Work-related Stress’ from the NSW Government. It may be found at: http://www.safework.nsw.gov.au/__data/assets/pdf_file/0008/99233/overview-work-related-stress-6071.pdf

Other ‘Tip Sheets’ from the same website may also be useful.

(a) How would you define workplace stress?Mark

Struggling to keep up or cope with Demands of the jobs within the workplace.-Employees indicate that they are unable to have a say about the way they do their work (lacking control).-Employees indicate that they are subject to unacceptable behaviors at work especially bullying.-Employees indicate that the organization engages them frequently when undergoing an organizational change. /4

(b) Suggest at least two ways in which work-related stress may affect client relationships.Mark

Conflict may increase and the quality of relationships may decline -client satisfaction may be reduced.

/2

(c) Suggest at least four approaches you can take to reduce workplace stress? (Hint: you may find suggested ways if you key ‘handling workplace stress’ into a search engine).

MarkDon’t apply undue pressure-No good comes from making demands or setting deadlines which can’t be met. When setting a goal ensure it is measurable, achievable, and time-bound.-Notice-Keep an eye on your colleague’s mental health. Has there been a change in their behavior or are they complaining more often than usual?-Be honest-Stop and think. What could be the contributing factor to your stress and where did it all begin? Is there a certain job that you need more help with or do you need to spend more time outside?-Be supportive-Keep an eye on your colleagues and be mindful of their workloads. Sometimes just asking a co-worker if they need help will make them feel better and more supported by the team.

/4


http://www.safework.nsw.gov.au/__data/assets/pdf_file/0008/99233/overview-work-related-stress-6071.pdf

http://www.safework.nsw.gov.au/__data/assets/pdf_file/0008/99233/overview-work-related-stress-6071.pdf

Sub-total /10 Continued

Task 3: Contribute to OHS Hazard Identification & Risk Assessment Continued

3.1 Gather information about workplace hazards

In assisting in the control of work-related hazards, you will need to be access suitable information.

Please read ‘Glossary of Job Demands and Job Resources’ from the QUT/ANU People at Work project. It may be found here:http://web.archive.org/web/20150227212940/http://www.peopleatworkproject.com.au/LiteratureRetrieve.aspx?ID=174670

(a) Explain the distinction between ‘job demands’ and ‘job resources’ risk factors.Mark

Job Demands can be classified as “work pressures” that have negative implications for the Psychological Well-Being of employees. These Job Demands can include specific task factors and interpersonal factors.Job Resources can be classified as “protective factors” that have positive implications for the Psychological Well-Being of employees. The availability of Job Resources also can act to reduce the level of strain experienced by employees by assisting them to cope with Job Demands that are not easily remedied.In the occupational stress literature, high levels of Job Demands and low levels of Job Resources have been a focus of a significant amount of research, with the view these have a detrimental effect on psychological health in the workplace.

JOB DEMANDS

High levels of these Psychosocial Risk Factors are shown to be detrimental to Psychological Well-Being

Role Overload: Role Overload occurs when an individual feel pressured by excessive workloads, difficult deadlines, and a general inability to fulfil organisational expectations in the time available.Role Ambiguity: Unclear or constantly changing specifications regarding expectations and duties defining an individual’s job also constitutes role ambiguity.

Role Conflict: Role Conflict reflects the degree to which employees are expected to perform two or more mutually exclusive tasks simultaneously and has been described as incompatible demands and expectations placed on an employee, by different groups or persons with whom an individual must interact.

Cognitive Demand: Cognitive Demand is not always a strong predictor of employee strain in isolation, but often works in combination with other job demands to heighten employee strain.Emotional Demand:Group Task Conflict: Such conflict may involve differences in views about policies

4/4


http://web.archive.org/web/20150227212940/http://www.peopleatworkproject.com.au/LiteratureRetrieve.aspx?ID=174670

http://web.archive.org/web/20150227212940/http://www.peopleatworkproject.com.au/LiteratureRetrieve.aspx?ID=174670

and procedures, disputes regarding allocation and distribution of resources, or disagreements in judgements and interpretation of facts.

Group Relationship Conflict: Group Relationship Conflict refers to interpersonal disagreements and frictions with one’s colleagues arising fromdifferences in personal style, values, and norms.

JOB RESOURCES

Low levels of these Psychosocial Risk Factors are shown to be detrimental to Psychological Well-Being

Job Control: It reflects an employee’s capacity to manage his or her activities at work, including choice of work tasks, methods of work, work pacing, work scheduling, control over resources, and control over the physical environment.Supervisor Support: Supervisor Support consists of both ‘instrumental’ support and ‘emotional’ support.Co-Worker Support: Co-Worker Support can be instrumental or emotional in nature.Praise and Recognition: Praise and recognition from supervisors can be in the form of encouragement, compliments, and other gestures of appreciation.Procedural Justice: One type of organisational justice is Procedural Justice and refers to employees’ perceptions of the fairness of the formal policies, procedures, and processes used to arrive at decisions and achieve end-goals and other outcomes.Change Consultation: Change Consultation refers to the degree to which employees are provided with information about organisational changes and provided the opportunity to participate in decisions that may affect their work.

(b) Identify two ‘job demands’ risk factors that are relevant to your workplace and describe what detrimental effect they might have.

No. Mark1. Role Ambiguity:

Role Ambiguity is defined as the lack of clarity or uncertainty with respect to job responsibilities, or the perceived lack of important job-related information. Unclear or constantly changing specifications regarding expectations and duties definingan individual’s job also constitutes role ambiguity.

/ 2

2. Group Task Conflict :Group Task Conflict refers to disagreements with one’s colleagues regarding the work to be undertaken. Such conflict mayinvolve differences in views about policies and procedures, disputes regarding allocation and distribution of resources, ordisagreements in judgements and interpretation of facts.

/ 2


Sub-total /8 Continued


3.2 Contribute to OHS risk assessment

Once risks have been identified, they should be controlled. A way of doing this is to use “job resources” available in the organization.

Once again, please refer to the ‘Glossary of Job Demands and Job Resources’ that was referred to earlier.

Apart from OHS issues, there are other significant risks that have to be dealt with at all levels in an organisation.

(a) List the job demand factors you have identified previously and for each one select one or more job resources that might be used to mitigate these risks.

No. Mark1. Role Overload:

Role Ambiguity:Role Conflict:Cognitive Demand:Group Task Conflict:

/ 1

2. Role Ambiguity – Supervisor SupportCognitive Demand -Praise and Recognition

/ 1

(b) Select one of the job resources listed and suggest how you could apply it in your work situation.

Mark.Job Control Job Control is the degree to which an employee has the discretion to approach their work in a manner of their choosing. It reflects an employee’s capacity to manage his or her activities at work, including choice of work tasks, methods of work, work pacing, work scheduling, control over resources, and control over the physical environment.

/ 1

(c) Select a significant risk issue, other than OHS issues, that has an impact on the way you perform your duties and explain how it is managed.

MarkOccupational StressOccupational stress is recognised as a major challenge to employee health and the overall health of an organisation. The stress process describes the physical, psychological, attitudinal, and behavioural reactions of employees who perceive that their work demands exceed their abilities and/or their resources to do their job.


If occupational stress becomes excessive and long-lasting it can lead to a range of consequences. For example, occupational stress is associated with poorer physical health (e.g., cardiovascular problems), and impaired psychological functioning as evidenced by increased anxiety, depression, and burnout. Occupational stress also has been shown to influence employee attitudes (e.g., job satisfaction and organisational commitment) andemployee behaviours (e.g., absenteeism, turnover, and reduced job performance). Thus, apart from legislative requirements, it makes good business sense to prevent or minimise the risks to psychological health because work environments that contain these risks can incur significant human and financial costs.Occupational Stress FrameworkThe People at Work Project has developed a framework of psychosocial hazards in the workplace which is based on a number of well-known models of occupational stress. The Psychosocial Risk Factors in the framework can be grouped into two categories, Job Demands and Job Resources.

/3




3.3 Environmental risks

The risks that should be considered in management decision-making include environmental risks.

This is giving rise to a new way for businesses to report to stakeholders that goes beyond traditional financial reporting. It is called “triple bottom line” reporting.

(a) List the three criteria of triple bottom line reporting. What is the likely effect of this form of reporting on management decision-making at all levels.

No. Mark1. Social (people): The examples listed below are a small snippet of potential

variables:

Unemployment rate

Female labor force participation rate

Median household income

Relative poverty

Percentage of population with a post-secondary degree or certificate

Average commute time

Violent crimes per capita

Health-adjusted life expectancy

Environmental (planet): Specific examples include:

Sulfur dioxide concentration

Concentration of nitrogen oxides

Selected priority pollutants

Excessive nutrients

Electricity consumption

Fossil fuel consumption

Solid waste management

Hazardous waste management

Change in land use/land cover

Financial (profit): Specific examples include:

/ 2


Personal income

Cost of underemployment

Establishment churn

Establishment sizes

Job growth

Employment distribution by sector

Percentage of firms in each sector

Revenue by sector contributing to gross state product

2. Social (people): Social variables refer to social dimensions of a community or region and could include measurements of education, equity and access to social resources, health and well-being, quality of life, and social capital.

Environmental (planet): Environmental variables should represent measurements of natural resources and reflect potential influences on its viability. It could incorporate air and water quality, energy consumption, natural resources, solid and toxic waste, and land use/land cover. Ideally, having long-range trends available for each of the environmental variables would help organizations identify the impacts a project or policy would have on the area.

Financial (profit): Economic variables ought to be variables that deal with the bottom line and the flow of money. It could look at income or expenditures, taxes, business climate factors, employment, and business diversity factors.

/ 2

(b) Select the annual report of a leading financial organization such as a major bank and, after identifying the organization, summarise what it says about its environmental impact (suggested maximum length of 50 words).

MarkAnnual Report of NAB : Environmental ImpactAs a lender, the group may incur environmental liabilities in circumstances where it takes possession of borrower’s assets and those assets have associated environmental risks. The group has developed and implemented credit policies to ensure that this risk is minimized and managed appropriately. The can be as a global provider of financial products and services play a key role in financing green growth and contribute to the environmental sustainability of the communities in which it operates.

/ 2

(c) Briefly indicate the environmental protection assistance that your business organization is able to receive from your State or Territory environment protection agency.

MarkLenders, for example, consider the environmental impact of their lending and have lists of activities they will not support through their lending activities. They also consider the

/ 2


environmental impact of their suppliers and seek to operate green offices.

Businesses are not on their own in environmental sustainability issues. In particular, an important source of information and assistance is provided by environmental protection agencies in all states and territories: The NSW Environment Protection Authority The Victorian Environment Protection Authority The Queensland Department of Environment and Heritage Protection The Tasmanian Environment Protection Authority The Western Australian Environment Protection Authority The Northern Territory Environment Protection Authority




3.4 Effective team management

Risk assessment also requires effective team management and participation and the right sorts of questions being asked.

(a) Describe the benefits of team meetings.

MarkGreat for Building Supportive relationships-Allows attendees to lift their head out of day-to-day operations-Creates space for giving each other feedback-Learning and improve opportunity

/ 2

(b) Consider your own role in team meetings and describe the approach you and other members should take to information sharing.

MarkTeam Meeting play a vital role in leadership – myself uses team meetings to rally the troops, clarify the mission, and everybody’s part in it. Leadership is difficult if a leader doesn’t engage with followers.

members can use meetings to offer feedback to each other, as long as it is pitched at the right level. Team meetings shouldn’t be used to provide feedback that is critical, but rather should be done in one-on-one meetings.

/ 2

.

(c) Give examples of the types of risks that should be considered in all team meetings.

Mark

Time Away From Specified Tasks:

the time spent in a team meeting will usually mean time spent away from normal day-to-day responsibilities. This can cause employees to fall behind in their normal routine.

Disagreements:

One of the largest disadvantages to holding a team meeting is the potential for disagreements and arguments (especially when two co-workers have shown a predisposition for this problem in the past). In many cases, employees see others' ideas a critique of their own work, and turn conversations into arguments. According to BusinessListening.com, these problems can be overcome with the use of an internal or external facilitator—someone whose sole concern will be to help keep meetings moving efficiently.

/ 2


(d) Explain why leadership is important in risk management.

No. Mark1. Fundamentally, I believe they do three simple things well. First, they ask the right

questions./1

2. Second, the best leaders consult with a mix of people, with different perspectives, backgrounds and knowledge to predict, assess and manage risk.

/1

3. Third, the most effective leaders during the global financial meltdown were people of good character. They had integrity, courage and compassion. They were careful, prudent and aware of their limitations.

/1

4. Good leaders welcome different opinions and points of views. Because of this, they are aware of potential risks and have the ability to make more informed and inevitably wiser decisions.

/1

Sub-total /10ContinuedTotal /41


Task 4: Manage Personal Work Priorities and Professional Development


4. Set and meet own work priorities

One of the challenges we face in a workplace situation is time management. Management theory on the subject began with the Pareto Principle, suggested that only about 20% of the things we do produce 80% of the results we achieve. The challenge than becomes to set time aside for the 20% that matters.

The theory was taken further with Stephen Covey’s Time management matrix.

(a) Describe Covey’s Quadrant 2.Mark

Not Urgent – Important. These are the things that matter in the long-term but will yield no tangible benefits this week or even this year. They are things we know we need to get to but probably will push off. It is having a lunch with an important contact or client. This is relationship building.

/2

(b) List three of your work activities that should belong in Covey’s Quadrant 2. Mark

Write personal mission statements – Set goals – Engage in professional development.

Everyone’s goals and dreams are different. A lot of times we associate things that have a sense of urgency as important, but that is not the case. Your goals and dreams are not running away; they will be right where they are now and there is no urgency to achieving them within a specified timeline. Anything that benefits you in the long run could be considered in quadrant two.

/3

(c) Suggest ways that you might utilize to ensure that proper time is spent on Quadrant 2 activities so that stress is avoided.

MarkExercise-

Having a lunch with an important contact or client:

/2

(d) Digital diaries are now available as both computer and mobile phone apps. Describe the place of digital diaries in managing personal work priorities.

MarkDigital diaries offer many advantages over paper, including:Your address book and phone are integrated, so calling people and recognizing callers is easyYou can (and definitely should) take advantage of the cheap and easy cloud-based back-ups now available, so that losing your diary doesn’t mean losing all your info.Many events (including Facebook and Eventbrite) give you the option of downloading the event to your digital diary.You can share calendars online with others if you want to.Regularly occurring information (birthdays, anniversaries, exercise sessions) can be input once as recurring entries, saving you time.

/2

(e) Describe the importance of setting goals in terms of personal well-being.

Mark


Never underestimate the importance of goals. Rhonda Addams, a small business planning consultant, has two rules that sum up the essence of goal setting: . You can’t reach a goal you haven’t set . If you want something, you also have to “do” something”. Setting goals also increases our feeling of wellbeing

/2


(f) What does Stephen Corvey recommend for “re-creation” (a Quadrant 2 activitiy),

MarkThese are the things that matter in the long-term but will yield no tangible benefits this week or even this year. They are things we know we need to get to but probably will push off. This is the quadrant where you want to invest most of your time. Tasks in quadrant two are in direct alignment of your goals and things you want to achieve in the long-run. Eg; Exercise

/2

(g) What are the common characteristics of work goals?

MarkSpecific, results-focussed, measurable, realistically attainable, relevant, and have a

timeframe for accomplishment.

/2



Task 4: Manage Personal Work Priorities and Professional Development Continued

4.1. Develop and maintain professional competence

One of the outcomes of spending more time on Covey’s Quadrant 2 is that we have more time for professional development. Desirable professional development includes a range of activities begin with reading the morning press to undertaking a degree course at university. Increasingly these days, it may also involve doing a course through the internet.

Setting professional development goals is part of the goal setting we should undertake in are working life. If we have personal goals we are more likely to make things happen. Also, research suggests that goal setting relieves stress and increases physical wellbeing.

Goal setting of this type is a Covey Quadrant 2 activity. As such it is something we have to deliberately set time aside for. This may be easier over time because that way it becomes more of a habit.

Ideas for professional development do not come out of a vacuum. You should be prepared to seek advice from colleagues and other mortgage brokers.

(a) List three activities you might consider undertaking to increase your competency (in addition to formal professional development training) to comply with ethical, legal and procedural requirements.

No. Mark1. Join a professional association and receive its eNewsletters, which are sometimes

provided on a daily basis. Amongst other things, this is a good way of keeping up with changes in legislative and regulatory requirements.

/1

2. Reading relevant publications, trade newspapers, magazines, and newsletters is another way to learn about industry and becoming aware of business opportunities.

/1

3. Read or listen to financial news. Mortgage brokers, for example, need to know what is happening to interest rates and what their main competitors – the banks – are doing. If brokers are properly in tune with their industry they will pick up relevant information in the daily newspaper or TV news.

1


(b) Describe how you can obtain ideas for professional development from (i) feedback and (ii) competency standards.

No. Mark1. Identify the skills, abilities and behaviours you need to perform your role to the

required level. You should also identify any additional skills, abilities and behaviours you need to be promoted or selected to undertake a higher level role to which you aspire.

/1

2. Evaluate your present skills, abilities and behaviours. Identify any areas that need improvement or where competency has not been reached.

/1

(c) Where do you see yourself in three years time? List three skills or competencies you will need to arrive there. Against each skill or competency nominated, suggest how you will attain it.

No.Mark

1. I will complete a Diploma in Financial Services (Mortgage Management) and hold an Australian Credit Licence (ACL).

/1

2. Firstly, I need to get my Certificate IV in Finance and Mortgage Broking.Secondly, I will start to assist my manager and work in mortgage broking team to gain some experience.Thirdly, I will complete a Diploma in Financial Services (Mortgage Management) and join MFAAFinally, I need to hold an Australian Credit Licence (ACL) and go out on my own.

/1

(d) Suggest ways in which mortgage brokers may network to assist other mortgage brokers.

MarkOrganise a broker forum of 4 to 8 like-minded brokers in your area that meets monthly to

talk about their business challenges and experiences- Publish your experiences, tips and advice in a blog/article. I’d very much welcome contribution to my site (blog) but equally I know the broker industry magazines would love to receive some content too.

/2

Sub-total / 9Total /24


Task 5: Develop and Nurture Relationships with Clients, Other Professionals and Third Party Referrers

5 Develop professional business relationships

David Maistre has defined professionalism as an ‘‘… an unqualified dedication to excellence in serving clients and their needs.’ This has important implications for how client relationships are established and maintained.

Mortgage brokers are also able to develop and benefit from relationships with other brokers because their main competition is not with each other. Rather, it is the banks and other financial institutions.

Networking within the industry is therefore important.

Meeting other mortgage brokers requires much the same techniques as meeting clients, other professionals and third party referrers. The relationship depends on the development of rapport and the ability to contribute to the relationship in key knowledge areas.

(a) What needs to be demonstrated at the outset in a client relationship? When is appropriate to demonstrate competence?

No. Mark1. Assess your needs. The broker will assess your financial situation and determine

your borrowing capacity as well as the type of mortgage product that will suit your long-term goals. A broker should evaluate your serviceability potential by

1/


presenting you with different calculations across different scenarios.Recommend mortgage products. After assessing your financial and personal situation, a broker will recommend suitable home loan products that complement your goals.Negotiate on your behalf. The broker will draw upon a panel of lenders and industry networks to find you the best deal with a competitive rate and attractive features.Provide support. As the loan process can be a complex proposition, the broker will offer you support and answer any questions that you may have about the process.Organise the paperwork. It’s the broker’s responsibility to ensure that they have all the required information to organise and lodge the paperwork on your behalf.

2. Spending time to understand the client, as well as his or her needs and its environment, is an essential first step in laying a good foundation for a client relationship. Depending on, at the initial stages this may include having several meetings with the client and other appropriate people within the business, as well as doing background research.

1/

(b) Imagine that you are explaining the function of mortgage broking to a client. What words would you use?

MarkThe functions of a mortgage broker may be summarised as: - find a lender;- complete the loan application; - submit the loan application to the bank or other loan provider, and wait for them to approve it. If a commission or other benefit will or may be paid by or to a Member for, or inconnection with, provision of Credit to a customer, the Member must alwaysdisclose to the Customer that fact and:a. the name of the person by whom the commission or other benefit is payable;andb. the name of the person to whom the commission or other benefit is payable;andc. the amount of the commission or other benefit, if ascertainable; andPage 6 of 11d. if the amount of the commission or other benefit is not ascertainable, the basisof or formula for such commission or other benefit;but this disclosure requirement does not apply to:e. the amount payable in connection with a credit related insurance contract; orf. the commission or other benefits paid to employees of the Member.Commissions and other benefits need not be disclosed by Managers or Servicers wherethe Customer is provided with the Manager’s or Servicer’s own Credit product.

/2

(c) Explain the importance of a code of ethics in the relationship between a professional and clients.

Mark


Comply with all applicable laws;Maintain appropriate and relevant training standards;Hold adequate professional indemnity insurance;Arrange appropriate finance for customers;Act promptly and properly in relation to the management of financeapplications;Disclose commissions and other benefits received (brokers only);Maintain IDR and membership of EDR schemes; andConsider hardship applications submitted by customers in a timely andappropriately detailed manner.

/2


(d) Drawing on your own experience or the experience of a more experienced colleague or manager, describe a situation where a need was identified to use language and concepts appropriate to cultural differences. How was the need met?

No.1. The ‘rules’ relating to non-verbal communication are generally understood within a

certain culture but vary from culture to culture and from generation to generation. These rules are particularly relevant in the areas of touching and the use of personal space. Take the time to understand these for the different cultures you are working with.

1/

2. Avoid inappropriate or gratuitous references to a person’s culture, etc. For example, ‘The new person who will be starting work next week is a woman by the name of Sandhya Uprety. She’s Anglo-Indian.’

If it is not necessary to identify a person’s cultural identity, simply use the term ‘Australian’. By mentioning people’s ethnic group, race, culture or religion, we are communicating that they are ‘different’—from the ‘norm’. If it is necessary to identify a person’s cultural identity, use terms such as ‘New Zealand-born’ or ‘Arabic-speaking’

1/



Task 5: Develop and Nurture Relationships with Clients, Other Professionals and Third Party Referrers Continued

5.1 Build and maintain business networks and relationships

For a relationship with a client to continue, they need an assurance of continuing mutual benefit. The continuing mutual benefit is also important in relationships with other professionals, including relationships with ‘outsiders’ such as accountants, real estate agents and other professionals.

(a) List two others type of professional your organization uses to develop client relationships and indicate in each case how it is able to provide them with a benefit in the relationship.

No.1. It can be hard to admit that we are not a source of all knowledge and advice,

but that is something professionals such

1. Acountants

2. Lawyers

/1

2. They let clients know when they have to research a matter, and when required they refer clients to professionals who have greater expertise. That is something that mortgage brokers need to learn to do if they are going to be proper professionals. It is also a matter of acting in the best interest of clients, which is what the duty of care is about.

/1

(b) Surveys indicated that two-way dialogue, or ‘conversation’ is of overriding importance in developing client relationships, relationships with colleagues and also other professional relationships. List four characteristics of this process.

No. Mark1. By directly engaging with customers, you can establish a real connection with them

—a two-way conversation that./1

2. Allows you to improve customer satisfaction. /1

3. Provides a platform for prospective customers to get to know your business. /1

4. Lets customers know they're being heard /1

(c) Other professionals that a mortgage broker might forms co.ntacts with are referred to in marketing literature as ‘Centres of Influence’ (COI). Why does David Maistre place them in his ‘second tier’ in order of effectiveness. What activities in David Maistre’s first tier does your organization engage in.

No. Mark1. A point to remember is that clients who are truly satisfied are likely to be eager to

provide referrals because this is a way of benefiting social contacts and family. Asking then to provide referrals does more than prompt them. It provides them with permission to go ahead.

/1

2. By working with ideal clients, brokers are more likely to have the level of concern that is an essential quality of professionalism. They are also more likely to develop

/1


the communication with clients that leads to “engagement” – that is, a longer-term relationship that comes from personal connection. The “picture” of the ideal client then becomes the basis of a marketing plan designed to attract and capture more of the same clients.


(d) List four occupations and professionals that may become Centres of Influence.for your organisation.

MarkThere are a number of associated professionals involved in the lending process.

1. Solicitors and Conveyancers:

2. Valuers

3. Land Titles Offices

4. Credit Reporting Agencies

/1

Sub-total / 1

Total /17


Task 6: Promoting the Effective Use of Credit

Read the following scenario then answer the questions that follow.

Roslyn qualified as a schoolteacher some years ago, but failed to take up a teaching position after graduating because she became a single mother. Fortunately, she has been able to live with her widowed mother, but now that her daughter has reached school she is taking up a position as a schoolteacher some suburbs away.

Because of the distance of her new school from her parent’s home she will need to buy a car. After careful consideration, she has chosen a small hatchback that has an on-road cost of $15,800.

She will be working full time with a starting salary of $50,000.

She knows little about finance and has come to you for advice. She would prefer to finance the full cost of the car because she has little in savings.

Task 6.1.(i) Suggest two financing options that Roslyn might consider.

(ii) Explain the main features of each.

(iii)Choose one of these options and explain your choice. Are there any disadvantages that need to be considered?

No. Mark1. Secured personal loan and commercial hire purchase /1

2. Secured personal loan often are sought for the purchase of motor vehicles, with the motor vehicle being used to secure the loan. The interest rate for secured loans are usually lower.Unsecured personal loan is often used for debt consolidation, holidays and to fund personal needs such as furniture and white goods. These loans are unsecured because there may be little or no tangible property over which the lender can take charge.

Commercial hire purchase is a form of commercial finance used to finance items which depreciate quickly, such as motor vehicle. It will only be over the medium –term, up to a maximum of five years and the borrower has the absolute right to purchase the item financed at the end the CHP term.

/2

3. In this case, I suggest Roslyn to apply for secured personal loan. Firstly, secured personal loan can provide her the lump sum amount after approval which is satisfy her need. Secondly, the interest rates for secured loans are usually lower. By Taking out a secured loan, If Natalie fail to make a payment on secured assets, credit provider can repossess the asset and sell asset to recover money. If the asset is sold for less value she will have to pay the creditor difference.

/2

Sub-total /5


Continued


Task 6: Promoting the Effective Use of Credit Continued

Task 6.2. Write a letter to Roslyn letting her know about your preferred, explain how she will make payments and giving your reasons for choosing it as the option more clearly meeting her needs. You should take care to proofread your letter.

MarkDear Roslyn,I have indicated that Westpac Car loan is the best product for her. Although, there are different loan available but this one is best suited to her. The fees are as follows:- $250 establishment fees- $10 monthly fees- 9.99 interest P.a. with 11.34 comparison rateAs per NCC borrowers provide a comparison rate which includes the interest charges and other fees. This rate is used to compare against the products of different banks. Fees and charges do not include government fees and expenses.There are hundreds of products from which you can choose. It is hard to understand the complex structure of fees in these products so NCC requires all credit providers to state comparison rate which helps consumers to compare different products.

To assist prospective consumer borrowers in understanding exactly how much they are paying for their loan, the National Credit Code requires that credit providers supply a comparison rate when they advertise the interest rates of their loan products. The comparison rate is determined using a standard formula which takes into consideration factors including amount of loan, interest rate, term of loan, frequency of repayments and fees and charges connected with the loan. For example, a bank might advertise its home loan interest rate as 5.5%. However, when fees and charges are added, the real rate might 6.75% Roslyn needs to compare the comparison rates but only interest rates to determine the reals cost of loans offered by different credit providers.

The comparison rate can change perspective of two loan interest rates. For example, Loan A and Loan B ‘s interest rates are 6%. The fees and charges of Loan A is 0.5% comparing to Loan B which is 0.1% As a result, the comparison rate of Loan A is 6.5% which is higher than the comparison rate of Loan B 6.1%. Loan B is the cheaper of two.

/4

Task 6.3.Roslyn is concerned that the lender will apply for a credit report. Explain:

(i) The procedure and cost involved in obtaining a copy of her credit file.

(ii) The right of a lender to access credit report information.

No.

Mark

1. At present, there are three main credit reporting agencies operating in the Australian market. These are Veda Advantage, Dun and Bradstreet and the Tasmanian Collection Service.

According to Veda’s website, the credit report can be ordered online with

/2


following fee options.

- Free File

- Veda

- Starter

- Veda

- Access

- Veda

- ID

- Veda

- Plan

What'sIncluded?

- - - - -

Order now Buy now Buy now Buy now Buy now

FREE $79.95 / YR $89.95 / YR $104.95 / YR

$119.95 / YR

Learn More Learn More Learn More Learn

MoreLearn More

Credit Report1 1 per year 1 per year 2 per year 2 per year 4 per year

VedaScore2 - - 1 per year Monthly 2 per year Monthly

Credit Alerts - - - - - - -

Score Tracker - - - - - - - -

Identity Watch - - - - - - - -

Identity Guard Insurance - - - - - -

Up to $15,000

Up to $15,000

Online Membership - - - - - -

- Resolution Centre - - - - -

Knowledge Area - - - - - -

- FREE $79.95 / YR $89.95 / YR $104.95 / YR

$119.95 / YR


http://www.veda.com.au/yourcreditandidentit









- - - - -

2. The information held by credit report agencies such as Veda advantage has significant implications for applicants. A poor credit history can result in the refusal of credit. All consumers, especially those with minimal financial experience, should made aware of the potential future consequences of defaulting on credit obligations. The Federal Government has now committed to include responsible lending obligations as part of the new licensing regime for consumer credit providers. This should require lenders to: - Only lend to a borrower who has a capacity to service the loan repayments, and do so without substantial hardship; and - Provide credit products that are suitable for the borrower’s circumstances

/2

Task 6.4.

Further information

Roslyn mentions that her mother’s washing machine has broken, and she urgently needs a replacement washing machine. The cost is less than a thousand dollars and she plans to use her credit card for the purchase. She tells you that she will make the minimum required repayment per month until she pays the machine off.

Draft a letter to Roslyn providing advice about her plan. Mark/2

Sub-total /10Total /15


Task 7: Prepare a loan application on behalf of mortgage broking clients

Case Study — Evaluating and processing a loan application

Read the following case study then answer the questions that follow.

Ross and Melissa Cooper are a young couple who have been married for five years, during which they have been renting an apartment while saving to buy an apartment of their own. They do not have any children at this stage.

After some months searching, they have found a small two-bedroom apartment that suits their needs. The purchase cost of the property is $480,000, and they have provided a deposit of $60,000. You are recommending a standard variable loan.

Ross has been working at Gaines Consulting Pty Ltd. for 12 years and has a salary of $80,000. Melissa has been working at Jackson Equipment Hire Pty Ltd for 8 years and has a salary of $70,000. Neither has had previous employment, apart from casual work when they were younger.

The full details of Ross and Melinda that you have collected are as follows:

Applicant 1 Applicant 2

Loan purpose Purchase home (owner occupied)

Amount and type of loan sought $480,00, standard variable rate

Deposit $60,000

Address Unit 2, 27 High St.,Mackville, NSW. 2080

Unit 2, 27 High St.,Mackville, NSW. 2080

Status Renting Renting

Years there 5 years 5 years

Contact details Phone (W) Phone (H)

02 9200 1111 (w) 02 9400 9900 (h)

02 9310 2000(w)02 9400 9900 (h)

Mobile 0400 100 156 0418 960 000

Email [email protected] [email protected]

Number of dependants Nil Nil

Employment Gaines Consulting Pty. Ltd Jackson Equipment Hire Pty Ltd

How long? 12 years 8 years

Gross income ( p.a.) $80,000 p.a. $70,000 p.a.

Credit history Personal loan to purchase a car — since repaid.Personal credit card with Central Bank with a limit of $3,000. Current balance: $300

Personal credit card with Northern with a limit of $2,000. Current balance: $300Store card with Wilson’s Department Store. Current balance: S250


Note: All credit cards are repaid in full when due.

Note: All credit cards are repaid in full when due.

ASSETS AND LIABILITIES

Assets Liabilities

Details Market value Details Monthly payments

Amount owing

Cash at bank $15,000 Credit card limit: $2,000

$3,000 $300

Deposit paid on property

$60,000 Credit card limit: $3,000

$2,000 $300

Motor vehicles:1.2.

$15,000$7,000

Other:

Personal effects $30,000

Business value Nil

Total assets $127,000 Total liabilities $600

Surplus/deficiency: $126,400

OTHER DETAILS:They are seeking a loan term of 25 years. Other requirements are:

proposed settlement date — 6 weeks time

ability to make additional payments from time to time without penalty

monthly repayments

redraw facility.

The applicants will have no other financial commitments other than their monthly mortgage commitments, rates and utility costs and strata fees.

The current variable home loan rate is 6% pa.

Note: For the purposes of this assignment, any first home purchase assistance should be ignored.

OTHER INFORMATIONAPRA is concerned that interest rates may rise and because of this it is requiring all lenders to “stress test” all housing loans at a borrowing rate of 7% p.a.


Task 7.1.Apart from requiring the presentation of a Credit Guide, the NCCP Act says nothing about what a mortgage broker should say about him/herself at the beginning of a client interview. In the space below, make a few brief points about what you would say about yourself and your firm at this stage. Remember that at the outside the client is primarily looking for assurance that the broker is concerned about them and their interests.

Mark/2

Task 7.2.List in point form the important information a Credit Guide conveys to the credit applicant.

Mark /3

Task 7.3.Under the Anti-money Laundering and Counter-terrorism Financing Act 2006 (AML/CTF Act), mortgage brokers are required to establish the identity of their clients. To do this they must cite original copies of at least three primary documents and one secondary document. List three primary documents and one secondary document below.

Mark/3



Task 7.4.Mortgage brokers should present adequate information to clients to enable them to make a choice between loans. This involves conducting research to determine suitable loans and presenting clients with a choice among, say, three loans that are considered to be suitable for the client’s requirements. The characteristics of the three selected loans are then presented to clients in a way that allows a comparison to be made. The presentation may be made a piece of paper, or other means such as a Powerpoint overhead.

You are now required to use the internet or other sources to choose three loans that you believe will meet the requirements of Ross and Melissa. The relevant details should be placed in the spaces provided.

MarkCredit Provider /6

Product Name

Interest Rate Type (%)Comparison Rate (%)Minimum Loan Amount ($)Maximum Loan Amount ($)Minimum Loan Term Maximum Loan TermMaximum LVR (%)Maximum Insured LVR (%)Mortgage Offset Account (Yes/No)Loan Redraw Facility (Y/N)Split Loan Facility (Y/N)Fixed Interest Option (Y/N)

Task 7.5 (a)Explain significant features of the loan products that you have chosen in words that the client would understand. Your answer should be restricted to features relevant to the clients.

Mark/2



Task 7.5 (b)Credit providers always have other fees and charges beyond their stated interest rates. Select one of the loans you have set out in Task 7.4 as the one preferred by Ross and Melinda, and explain any additional fees and charges in a manner that your clients can understand.

Mark/2

Task 7.6It is important to verify the information that you obtain from clients, particularly information that relates to income. List the documents that you should ask for and then examine to verify the incomes of Ross and Melissa.

Mark/3

Task 7.7In dealing with clients, it is important to explain technical concepts in ‘plain English’ so that they understand them. In the first two spaces below, explain the terms ‘LVR’ and ‘insured’ LVR’ in terms that that your clients will understand. Then, in the third space, explain how Lender’s Mortgage Insurance is normally paid, once again expressing yourself in a way that the clients are likely to understand.No. Mark1. /1

2. /1

3. /1

Task 7.8Mortgage brokers assist their clients to complete their preferred lender’s credit application form, as well as applications for the First Home Buyer’s Grant and (where applicable) stamp duty exemption. Examples of these forms are set out over the following pages and you are required to complete them on behalf of Ross and Melissa. Remember that each form must be signed by the client, so facsimile signatures must be attached,

MarkThe forms for the following pages can be found at: http://www.pwloans.com.au/ANZ%20full%20application.pdfhttp://www.osr.nsw.gov.au/sites/default/files/file_manager/ofh001.pdf (application form only) http://www.osr.nsw.gov.au/sites/default/files/file_manager/oda066.pdf ((application form only)

/15

Sub-total /23


http://www.osr.nsw.gov.au/sites/default/files/file_manager/oda066.pdf

http://www.osr.nsw.gov.au/sites/default/files/file_manager/ofh001.pdf

http://www.pwloans.com.au/ANZ%20full%20application.pdf

http://www.pwloans.com.au/ANZ%20full%20application.pdf

ContinuedTask 7: Prepare a Loan Application on Behalf of Mortgage Broking Clients Continued

Task 7.9.It is important to keep clients informed about the steps involved in the credit approval process. Indicate how your organization keeps your client informed as the loan application proceeds. What are the likely normal time intervals for each step that you explain to your clients. No. Mark1. /2

Task 7.10Assess the loan application of Ross and Melissa Cooper against the five C’s.

a) CharacterHow would you assess the applicants’ character?

Mark/2

b) Capacity(i) What will the applicants’ monthly payment be, given the current variable lending rate of

6% p.a.? (Hint: visit a website such as: http://www.yourmortgage.com.au/calculators/ ).

(ii) Using the ‘income percentage method’, assess the applicants’ capacity to repay the loan (25 words)

No. Mark1. /1

2. /1

Sub-total / 6Continued


http://www.yourmortgage.com.au/calculators/

Task 7: Prepare a Loan Application on Behalf of Mortgage Broking Clients Continued

c) Capital(i) How would you verify the equity the applicants intend to contribute to the purchase?

(ii) What should you be careful about regarding this contribution? (50 words)

No. Mark1. /1

2. /1

d) Collateral(i) Assuming the valuation placed on the property is $480,000, calculate the loan to valuation

ratio (LVR).

(ii)Given the LVR that you have calculated, what steps might the bank take to protect its position? (25 words)

No. Mark1. /1

2. /1

e) ConditionsUsing the information that has been presented, identify any ‘conditions’ that might impact on this loan application. How should they be handled?

Mark/2

Task 7.11What is your organization’s policy about notifying applicants of the outcome of their application?

Mark/2



Task 7.12The credit application that is forwarded to the credit provider is accompanied by supporting documentation used to verify the information concerning the financial position of the client. List four types of document that are likely to be forwarded. In the case of Ross and Melissa Cooper.No. Mark

1. /12. /13 /14. /15. /16. /1

Task 7.13What should be the rules regarding access to client files?

Mark/2

Task 7.14There are times that you might suggest to clients that they should have a fixed interest loan for a period. Explain why you would do this.

Mark/1

Task 7.15List the information you should include on a client file.

Mark/2

Sub-total /11ContinuedTotal /79


Task 8: Steps Taken by the Credit Provider8 Build and maintain business networks and relationships

As indicated, the process of interviewing a client, carrying out a preliminary assessment, and forwarding a credit application to a credit provider should take no longer than two days. The credit provider’s task, however, is more involved and takes longer because there are more matters to consider than the final assessment, which is normally carried out soon after the credit application has been received from the mortgage broker.

These matters include having the security valued and negotiating any additional support, checking all details, preparing an offer letter, preparing security documentation, having the loan documentation signed, attending settlement, registering the mortgage and having the mortgage documents stamped.

The offer letter is in fact the loan contract the mortgage broker becomes involved once again – to check that the requirements of the loan purpose are met and to ensure that the client understands all terms and conditions.

Task 8.1.The final assessment of the credit application is carried out by an officer of the credit provider, or at a higher level if that officer’s authority is exceeded. What is that officer’s responsibility in terms of the NCCP Act.

Mark/2

Task 8.2.Give examples of the information that the mortgage broker may be asked to obtain at the time of the final assessment.

Mark/2

Task 8.3.Sometimes additional support, such as a third party guarantee is required in housing loans. Indicate when such support may be required and the matters about which the credit provider should seek to be satisfied. How is the required evidence about those matters normally obtained?No. Mark1. /1

2. /1

3. /1



Task 8.4.Distinguish between the credit provider’s final assessment and the credit review carried out by the credit provider?

Mark/3

Task 8.5.List five of the checks the credit provider would normally perform before preparing an offer letter.No. Mark1. /1

2. /1

3. /1

4 /1

/1

Task 8.6.Why do mortgage brokers become involved once again when the offer letter is forwarded to the client? What legal responsibility under the NCCP Act leads to this involvement? No. Mark1. /2

2. /2

Task 8.7.List four other matters relating to the offer letter that the mortgage broker should check.No.1.

2.

3.

4. /1


Task 8.8.Copyright Mentor Education Group Pty Ltd Page 46 of 47document.docx

Imagine that you are the client’s solicitor writing to the client. In words that the client is likely to understand explain: what happens at settlement; how funds are normally disbursed following settlement; and how the title document is registered.No. Mark1. /1

2. /1

3. /1

Sub-total /3Total /23


Documents

files.transtutors.com€¦ · Web viewTo assist prospective consumer borrowers in understanding exactly how much they are paying for their loan, the National Credit Code requires