Written Assignment
Industry Knowledge and the Lending Process (DIPMB1_AS_v3A1)
Student identification (student to complete)
Please complete the fields shaded grey.
| Student number |
Written assignment overall result (assessor to complete)
| First submission | |
| Resubmission (if applicable) |
Result summary (assessor to complete)
| Section 1: Case study 1 — Philip and Jennifer Brown | First submission | Resubmission (if required) |
| Task 1 — Key terms, gathering and documenting client information | ||
| Task 2 — Assessing the clients’ situation | ||
| Task 3 — Borrowing options | ||
| Task 4 — Reasonable enquiries | ||
| Task 5 — First Home Owners Grant and home buyer assistance schemes | ||
| Task 6 — Professional network and loan settlement process | ||
| Task 7 — Interest rates | ||
| Section 2: Case study 2 — Richard and Pauline Jackson | ||
| Task 8 — Responsible lending obligations | ||
| Task 9 — Self-employed special considerations | ||
| Task 10 — Advising on strategies | ||
| Task 11 — Impact of credit history | ||
| Task 12 — Dispute resolution | ||
| Section 3: Case study 3 — Mary Jane Smith | ||
| Task 13 — Prepare and check a loan application | ||
| Section 4: Working in financial services | ||
| Task 14 — Financial services legislation and industry codes of practice | ||
| Task 15 — Design and produce a document | ||
| Task 16 — Applying principles of professional practice to work in the financial services industry |
Please note: To pass this written assignment, you will need to be assessed as DEMONSTRATED in either your first submission or your resubmission in all tasks above.
Task feedback
Please refer to the assessor’s detailed feedback found at the end of each task so that you know what to do for any tasks you need to resubmit.
Before you begin
Read everything in this document before you start your written assignment for Industry Knowledge and the Lending Process (DIPMB1v3) subject.
About this document
This document is the written assignment — half of the overall Written and Oral Assignment.
This document includes the following parts:
• Instructions for completing and submitting this assignment
• Section 1: Case study 1 — Philip and Jennifer Brown
A case study with a series of short-answer questions:
– Task 1 — Key terms, gathering and documenting client information
– Task 2 — Assessing the clients’ situation
– Task 3 — Borrowing options
– Task 4 — Reasonable enquiries
– Task 5 — First Home Owners Grant and home buyer assistance schemes
– Task 6 —Professional network and loan settlement process
– Task 7 — Interest rates
• Section 2: Case study 2 — Richard and Pauline Jackson
A case study and a series of short-answer questions:
– Task 8 — Responsible lending obligations
– Task 9 — Self-employed special considerations
– Task 10 — Advising on strategies
– Task 11 — Impact of credit history
– Task 12 — Dispute resolution
• Section 3: Case study 3 — Mary Jane Smith
A case study and a series of short-answer questions:
– Task 13 — Prepare and check a loan application
• Section 4: Working in financial services
– Task 14 — Financial services legislation and industry codes of practice
- Task 15 — Design and produce a document
– Task 16 — Applying principles of professional practice to work in the financial services industry
• Appendix 1: Key terms
• Appendix 2: Client information collection tool/Fact finder
• Appendix 3: Loan application.
How to use the study plan
We recommend that you use the study plan for this subject to help you manage your time to complete the written assignment within your enrolment period. Your study plan is in the KapLearn Industry Knowledge and the Lending Process (DIPMB1v3) subject room.
Instructions for completing and submitting the written assignment
Completing the written assignment
Saving your work
Download this document to your desktop, type your answers in the spaces provided and save your work regularly.
• Use the template provided, as other formats will not be accepted for these assignments.
• Name your file as follows: Studentnumber_SubjectCode_Assignment_versionnumber_Submissionnumber
(e.g. 12345678_DIPMB1_AS_v3A1_Submission1).
• Include your student ID on the first page of the assignment.
Before you submit your work, please do a spell check and proofread your work to ensure that everything is clear and unambiguous.
Word count
The word count shown with each question is indicative only. You will not be penalised for exceeding the suggested word count. Please do not include additional information which is outside the scope of the question.
Additional research
When completing the ‘Client information collection tool’ in Appendix 2, assumptions are permitted, although they must not be in conflict with the information provided in the Case study.
Throughout the assignment you will also be required to research additional information from other organisations in the finance industry to find the right products or services to meet your client’s requirements or to calculate any service fees that may be applicable.
Submitting the written assignment
Only Microsoft Office compatible written assignments submitted in the template file will be accepted for marking by Kaplan Professional Education. You need to save and submit this entire document.
Do not remove any sections of the document.
Do not save your completed assignment as a PDF.
The written assignment must be completed before submitting it to Kaplan Professional Education. Incomplete written assignments will be returned to you unmarked. The written assignment must be submitted together with the oral assignment. If you do not submit both completed assignments at the one time it will be returned to you unmarked.
The maximum file size is 20MB for the written and oral assignment. Once you submit your written assignment for marking you will be unable to make any further changes to it.
Once you submit your written assignment for marking you will be unable to make any further changes to it.
You are able to submit both assignments earlier than the deadline if you are confident you have completed all parts and have prepared a quality submission.
Please refer to the Assignment submission/resubmission videos in the Assessment section of KapLearn under your ‘Assignment Enrolment’ for details on how to submit/resubmit your written assignment.
Your Written Assignment and Oral Assignment must be submitted together on or before your due date. Please check KapLearn for the due date.
The written assignment marking process
You have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.
If you reach the end of your initial enrolment period and have been deemed ‘Not yet demonstrated’ in one or more assessment items, then an additional four (4) weeks will be granted, provided you attempted all assessment tasks during the initial enrolment period.
Your assessor will mark your written and oral assignment and return it to you in the Industry Knowledge and the Lending Process (DIPMB1v3) subject room in KapLearn under the ‘Assessment’ tab.
Make a reasonable attempt
You must demonstrate that you have made a reasonable attempt to answer all of the questions in your written assignment. Failure to do so will mean that your assignment will not be accepted for marking; therefore you will not receive the benefit of feedback on your submission.
If you do not meet these requirements, you will be notified. You will then have until your submission deadline to submit your completed written and oral assignment.
How your written assignment is graded
Assignment tasks are used to determine your ‘competence’ in demonstrating the required knowledge and/or skills for each subject. As a result, you will be graded as either Demonstrated or Not yet demonstrated.
Your assessor will follow the below process when marking your assignment:
• Assess your responses to each question, and sub-parts if applicable, and then determine whether you have demonstrated competence in each question.
• Determine if, on a holistic basis, your responses to the questions have demonstrated overall competence.
You must be deemed to be demonstrated in all assessment items in order to be awarded the units of competency in this subject, including:
• all of the exam questions
• the written and oral assignment.
‘Not yet demonstrated’ and resubmissions
Should sections of your assignment be marked as ‘not yet demonstrated’ you will be given an additional opportunity to amend your responses so that you can demonstrate your competency to the required level.
You must address the assessor’s feedback in your amended responses. You only need amend those sections where the assessor has determined you are ‘not yet demonstrated’.
Make changes to your original submission. Use a different text colour for your resubmission. Your assessor will be in a better position to gauge the quality and nature of your changes. Ensure you leave your first assessor’s comments in your assignment, so your second assessor can see the instructions that were originally provided for you. Do not change any comments made by a Kaplan assessor.
Units of competency
This written assignment is your opportunity to demonstrate your competency against these units:
| FNSFMB401 | Prepare loan application on behalf of finance or mortgage broking clients |
| FNSFMB402 | Identify client needs for broking services |
| FNSFMB403 | Present broking options to client |
| FNSFMK505 | Comply with financial services regulation and industry codes of practice |
| FNSINC401 | Apply principles of professional practice to work in the financial services industry |
Note that the written and oral assignment is one of two assessments required to meet the requirements of the units of competency.
We are here to help
If you have any questions about this written assignment you can post your query at the ‘Ask your Tutor’ forum in your subject room. You can expect an answer within 24 hours of your posting from one of our technical advisers or student support staff.
Section 1: Case study 1 — Philip and Jennifer Brown
Background
Philip and Jennifer Brown are a young couple about to buy their first home. They have been married for five years and during that time have rented an apartment while saving for their own home.
Following a personal referral from Glenn Brown, Philip’s brother you have already had a first meeting with Philip and Jennifer to discuss their objectives and needs. They admitted they have little time to do much research of lenders, have limited knowledge of the loan products available and have approached you to guide them through the process as they are confused.
During (and subsequent) to your first meeting, Philip and Jennifer have provided the basic information documents — pay slips, tax returns, bank statements, property details for review/verification. You have now undertaken your preliminary assessment and need to discuss and present to them the proposal covering the options and your recommendations. It is important to get the proposal moving quickly, as the agent has indicated other parties are interested in the property.
They have been looking at properties for the past three months and have found a 10 year old established apartment that has really caught their eye, although they have some concern over the kitchen which requires some minor renovations.
They have not paid a deposit at this stage, but the Real Estate Agent has provided some guidance on additional fees and charges.
Following is a summary of the details of the property they wish to purchase, the couple’s financial and employment details, and the loan features they require.
The property
| Address | Unit 1, 92 Seaside Lane Edgartown (Your state) |
| Purchase price | $490,000 |
| Description | 2 bedroom, 2 bathroom Strata Title apartment |
| Agent details | Stephanie Jones |
| Phone | 8123 1113 |
| Mobile | 0412 880 088 |
The couple
| Current address | Unit 12, 22 Wentworth Lane, Highville, (Your state) |
| Philip and Jennifer have lived there since March 2012 | |
| Home phone | 9123 2121 |
Funds position
| Purchase price | $490,000 |
| Clients’ estimate of costs | $25,000 |
| Total required | $515,000 |
| Loan | $440,000 + LMI |
| Clients’ total contribution (including deposit of $50,000) | $75,000 |
Use fees and charges applicable to your state. If a servicing calculator you are using requires a postcode, select one that would represent a reasonable suburb/location in your city or state.
Assets
| Capital Bank savings account (joint) | $78,000 |
| Capital Bank cheque account (joint) | $1600 |
| Holden Commodore SS 2007 (Philip) | $25,000 |
| Kia Cerato Sport 2015 (Jennifer) | $9000 |
| Superannuation — Capital Bank (Philip) | $28,000 |
| Superannuation — Capital Bank (Jennifer) | $62,000 |
| Household effects (insured value) | $40,000 |
Liabilities
| Capital Bank personal loan (Philip) | $5,600 (repayments $180 p.m.) |
| Capital Bank Visa card (Philip) | $200 (limit $4,000) |
| Capital Bank Visa card (Jennifer) | $1,600 (limit $5,000) |
Payments have always been met on time and any prior loans repaid in terms of contracts. The minimum monthly commitment on each of the credit cards should be calculated at 3% of the credit limit.
Living expenses
Annual expenditure for living expenses — $33,000.
Employment and income
Philip (date of birth 21/2/87)
| Position | Team Leader (full time) |
| Employer | ACE Limited 101 City Rd, Westside (Your state) |
| Phone | 9800 1111 |
| Income (gross) | $58,000 p.a. monthly gross income: $4,833 |
| Employer contact | Dwayne Johnson, HR Manager |
| Length of service | Since October 2005 |
| Driver’s licence | 8855KL |
| philipb@ace.com.au |
Jennifer (date of birth 8/10/88)
| Position | Accountant (full time) |
| Employer | Tech city 804 High Street, City East (Your state) |
| Phone | 9910 2033 |
| Income (gross) | $95,000 p.a. monthly gross income: $7,917 |
| Employer contact | Bruce Wayne, HR Manager |
| Length of service | Since March 2006 |
| Driver’s licence | 17016C |
| jbrown@techcity.com.au |
Solicitor’s details
Jones and Co
22 High Street, City East (Your state)
Phone: 82811382
Email: jonesandco.net.au
The solicitor has quoted a fee of $1,500 for the conveyance.
The loan requirements
• 30 year term
• premium option home loan features
• variable interest rate (for this case use 4.5% p.a.)
• LMI to be capitalised
• proposed settlement date — six weeks from exchange of contracts
• ability to make additional payments from time to time without penalty
• fortnightly repayment option
• redraw facility
• funds access via card.
Note: Loan application fee is waived under Special Offer.
Other information
• They have advised that the Real Estate Agents have indicated they need to make a formal offer within the next 10 days, however they are reluctant to do so until they obtain an approval.
• Jennifer has asked if there are any professional package benefits available because she is an accountant. However, she did confirm she has not maintained her continuing professional development.
• Jennifer previously owned and lived in an apartment with her two older sisters when they attended university but they sold this before she married — they did not make a lot from sale.
• Family plans are five years away.
• They do have plans to take a major overseas trip before family comes along.
• Philip is hoping for a promotion within the next 12 months upon possible retirement of a long-term employee where he works.
- They have also expressed a concern about the possibility of interest rates increasing.
Assignment tasks(student to complete)
Task 1 — Key terms, gathering and documenting client information
1. Complete the ‘Key terms’ (located at the end of the written assignment in Appendix 1).
2. Using the information provided in Case study 1, complete the ‘Client information collection tool’ (located at the end of the written assignment in Appendix 2).
3. You will also need to complete the Genworth Serviceability Calculator to assess the security, debt service and borrowing capacity for Jennifer and Phillip Brown. To do this, follow these steps:
(a) Use the details in Case study 1.
(b) Read the Genworth Calculator Supplementary Material Guide available in the Kaplearn DIPMB1v3 subject room.
(c) Process the loan application using the Genworth Serviceability Calculator accessible here: <https://www.genworth.com.au/lenders/lmi-tools/serviceability-calculator>.
(d) Once you have processed it, download a copy of the PDF and save it to your desktop.
Note: You will need to upload a copy of this pdf with your written and oral assignment submission. This will assist your assessor with providing feedback on your written and oral assignment submission.
Note: Any assumptions you make should be listed and should not be in conflict with the case study information already provided.
Assessor feedback for Task 1 — Key terms, gathering and documenting client information
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 2 — Assessing the clients’ situation
1. Based on the information provided in the case study and any other online tools used, you now need to assess the clients’ loan application paying particular attention that you have met legislative requirements, followed industry codes of practice and met lender credit policy.
Comment on issues such as:
• does it appear to meet legislative requirements (e.g. NCCP)
• maximum borrowing capacity of client
• capacity to meet deposit and total cash contribution for the loan required
• repayment requirements based on the loan required
• what the security will be and if it is appropriate
• do Jennifer and Phillip require Lenders Mortgage Insurance (LMI), and if so, how much will it cost and what are the options to pay the fee
• what loan amount would you recommend, and why
• likelihood that the clients will be able to meet all their financial obligations
• do Jennifer and Philip qualify for concessions on any of the fees and charges
• any other issues that may impact, now or in the future, on the clients’ ability to meet their obligations, including any possible risks.
Provide data to support your comments and conclusions. (750 words)
Note: The assessment of the clients’ needs is a critical prelude to you completing Part 4 of the Oral assignment requirement for this course.
Student response to Task 2: Question 1
| Answer here |
2. (a) Most lenders stress test loan repayments by adding an additional 2–3% on to the loan repayments to make sure a borrower can afford the repayments. If interest rates moved 3% higher, what would Philip and Jennifer’s loan repayments be and do you think they would be able to cope with the extra repayments? (100 words)
Student response to Task 2: Question 2(a)
| Answer here |
(b) Identify appropriate product options you can present to the clients that may remove this interest rate risk? (50 words)
Student response to Task 2: Question 2(b)
| Answer here |
Assessor feedback for Task 2 — Assessing the clients’ situation
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 3 — Borrowing options
Although Philip and Jennifer are looking to borrow at approximately 90% LVR, what other options could you present that would avoid the cost of LMI? (100 words)
Student response to Task 3
| Answer here |
Assessor feedback for Task 3 — Borrowing options
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 4 — Reasonable enquiries
In the course of gathering information about the couple, you are required under the National Consumer Credit Protection Act 2009 to make all ‘reasonable’ enquiries to determine a borrower’s objectives, requirements and financial situation.
Identify at least six (6) ‘reasonable’ enquiries that you would make with the clients in the case study and explain why these enquiries are important in terms of NCCP compliance. (200 words)
Student response to Task 4
| Answer here |
Assessor feedback for Task 4 — Reasonable enquiries
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 5 — First Home Owners Grant and home buyer assistance schemes
Describe the First Home Owner’s Grant or home buyer assistance scheme benefits and stamp duty concessions that are available in your State or Territory, who would be eligible and what would be their benefit? Are Philip and Jennifer eligible for any assistance?
Note: Please identify which State or Territory you are from in your answer. (150 words)
Student response to Task 5
| Answer here |
Assessor feedback for Task 5 — First Home Owners Grant and home buyer assistance schemes
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 6 — Professional network and loan settlement process
1. Name three (3) parties, who are not directly involved in the processing of a loan and what their role is. Explain how you would communicate with them in an efficient and effective manner so that they understand pre-settlement conditions and their involvement required. (100 words)
Student response to Task 6: Question 1
| Answer here |
2. Explain how you would develop and maintain relevant networks with professionals such as those you detailed above or other professionals to ensure you are up to date with the products or services they provide. (100 words)
Student response to Task 6: Question 2
| Answer here |
3. You want to ensure that Philip and Jennifer have all the key insurance protections in place in case something unfortunate was to happen to one of them. What process would you follow during your discussion with the clients to ensure you have a good assessment of their needs? (100 words)
Student response to Task 6: Question 3
| Answer here |
4. Briefly explain why it is important for the broker to remain informed of developments in the lending process despite not being actively involved at every stage. (100 words)
Student response to Task 6: Question 4
| Answer here |
5. Application form and related documents have now been signed and forwarded to the Lender for approval. Philip and Jennifer have agreed that you will keep their Solicitor informed of progress if/when the loan is approved.
Refer to the ‘Example of an Organisation’s Policies and Procedures’ document in toolbox and explain what the service standards and timelines are up to and including the issue of offer letter and mortgage documents. (100 words)
Student response to Task 6: Question 5
| Answer here |
6. Clients have now called to execute loan offer and mortgage documents and are nervous that their Solicitor is very busy and difficult to contact. They want to know who will be responsible for what tasks from this point in the lead up to settlement and immediately following settlement.
Explain to Philip and Jennifer who is responsible for completion of what tasks once the loan documents have been returned to the lender and in the lead up to settlement and once settlement occurs. Focus on the lending organisation and the client’s solicitor/conveyancer roles in this part of the lending process. (150 words)
Student response to Task 6: Question 6
| Answer here |
Assessor feedback for Task 6 — Professional network and loan settlement process
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 7 — Interest rates
1. Conduct your own research and answer the following:
(a) What is the role of the RBA with respect to the movements of interest rates?
(b) Why is it important to have these controls and how do they impact mortgage loans in Australia?
(c) Are banks obliged to follow the RBA cash rate? Explain the reason for your answer.
(200 words)
Student response to Task 7: Question 1(a)–(c)
| Answer here |
2. Philip and Jennifer from Case study 1, have called to discuss whether they should fix the interest rate on their loan after having received several conflicting viewpoints from family and friends.
(a) Explain the process you would use to research and identify the various product options available to meet the needs of Philip and Jennifer.
(b) Explain to Philip and Jennifer two (2) advantages and two (2) disadvantages of fixing a loan over different fixed rate terms.
(150 words)
Student response to Task 7: Question 2(a)–(b)
| Answer here |
3. What other option/s can you suggest if they remain uncertain about whether to fix the rate on their loan? (100 words)
Student response to Task 7: Question 3
| Answer here |
Assessor feedback for Task 7 — Interest rates
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Section 2: Case study 2 — Richard and Pauline Jackson
Background
Richard and Pauline Jackson have a small mowing and gardening business in which they have been working for the last eight years. As it is only the two of them in the business they operate as a partnership.
They have approached you to help restructure their finance, as they are finding the management of their debts a struggle following the loss of one of their major commercial property contracts.
After further questioning, you realise that the situation is more serious than they originally explained; they had missed payments on their mortgage, only pay the minimum on their credit card of 3% each month and the work ute they have on lease is expiring. They have a $15,000 residual payment due and do not have the funds available.
They lost the major contract 12 months ago and fell behind on the mortgage payments soon after. They spoke to their lender (First and Last Bank) and a ‘hardship application’ was approved. The missed payments were corrected by extending the term of their loan. Nothing adverse was recorded on their credit file but they are still struggling with all the monthly commitments.
After reading the case study above and reviewing their funding position below, answer the questions that follow:
Assets
| 46 Walters Road, Ritchfield | $490,000 |
| First and Last Bank savings account (joint) | $1,200 |
| Little Saving Building Society cheque account (joint) | $2,300 |
| Business debtors (unpaid invoices for work) | $6,200 |
| Ford Utility, 3 years old (work vehicle) | $25,000 |
| Holden Commodore, 7 years old (family car) | $15,000 |
| Superannuation — AMB Insurance (Richard) | $46,000 |
| Superannuation — AMB Insurance (Pauline) | $29,000 |
| Household effects (insured value) | $66,000 |
Liabilities
| Lender | Situation | Interest rate | Monthly repayment | Debt |
| First and Last Bank (home loan — joint) | Currently up to date though had three-month extension to contract after hardship application 12 months ago | 5.7% | $1,567.00 | $270,000 |
| Big Bank Visa card (Richard) | Only able to repay 3% per month for last six months | 18.95% | (pays 3% per month) $240.00 | $7,800 (limit $8,000) |
| Little Bank Visa card (Pauline) | Only able to repay 3% per month for last six months Is over limit by $800 | 21.5% | (pays 3% per month) $90.00 | $3,800 (limit $3,000) |
| My Domain Furniture Store | Did not keep to interest free contract and paying debt by instalments | 28.50% | $370.00 | $3,400 |
| Super Car Loan lease | Four-year contract expiring next month and need $15,000 to pay residual | n/a | $850.00 | $15,000 (residual) |
| Total | $3,117.00 | $300,000 |
Assignment tasks (student to complete)
Task 8 — Responsible lending obligations
The National Consumer Credit Protection Act 2009 imposes ‘responsible lending’ obligations on brokers that must be satisfied by all people arranging loan applications. The primary objective under responsible lending guidelines is that the credit facility offered to the borrower is ‘not unsuitable’ for the borrower, meets their requirements and objectives and will not create substantial hardship.
1. Refer to ‘What is substantial hardship?’ available in the toolbox. In your own words how would you define ‘substantial hardship’ (detailed information on this subject is found at RG 209 issued by ASIC)? (150 words)
Student response to Task 8: Question 1
| Answer here |
2. What are the benefits of debt consolidation for Richard and Pauline? (100 words)
Student response to Task 8: Question 2
| Answer here |
3. Richard and Pauline have decided to consolidate their debts into their home loan with two splits, one for the existing home loan and a second split for all other debts.
In the template below provide a new liabilities summary once Richard and Pauline have completed the debt consolidation including their new monthly repayments.
Note: They have chosen to refinance with ‘One State Bank’ who are offering a 4.5% interest rate on a variable, principal and interest loan over 30 years.
Student response to Task 8: Question 3
| Lender | Interest rate | Monthly repayment | Debt |
| Answer here | Answer here | Answer here | Answer here |
| Total |
4. What savings will Richard and Pauline obtain in monthly repayments?
(Remember to show the calculation of how you determined the savings). (100 words)
Student response to Task 8: Question 4
| Answer here |
Assessor feedback for Task 8 — Responsible lending obligations
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 9 — Self-employed special considerations
1. As Richard and Pauline are self-employed, what documents will you need to obtain to verify and assess their income? (150 words)
Student response to Task 9: Question 1
| Answer here |
2. If a Low-doc application is an option for the customer, name three (3) extra documents you will need to obtain and assess. Explain how each of these documents will establish their income. (150 words)
Student response to Task 9: Question 2
| Answer here |
3. Explain how applying for a Low-doc loan could lead the mortgage broker to be accused under NCCP of recommending an ‘unsuitable’ product. (250 words)
Student response to Task 9: Question 3
| Answer here |
Assessor feedback for Task 9 — Self-employed special considerations
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 10 — Advising on strategies
Following the presentation of your proposal, Richard and Pauline say that they would like your advice on strategies that could help them to repay their home loan as quickly as possible.
• List at least three (3) strategies or methods that will help them achieve their aim.
• Explain how each strategy will result in a home loan being repaid more quickly.
Note to students: You may refer to the MoneySmart website for information on this subject and your answer may also include, but not be restricted to, available mobile phone apps used for debt management. (300 words)
Student response to Task 10
| Answer here |
Assessor feedback for Task 10 — Advising on strategies
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 11 — Impact of credit history
Richard tells you that his former wife failed to properly meet their unsecured personal loan debt obligations before they separated. Although he eventually repaid the debt, he is afraid that this incident may count against him when he applies for a loan. There are a few things Richard can do as he is concerned about his credit rating. What information would you provide in the following situations?
1. Provide Richard with the details of two (2) major credit reporting agencies and explain what information may be recorded on his credit file. Information can be sourced from the websites of credit reporting agencies and the Office of the Australian Information Commissioner. (200 words)
Student response to Task 11: Question 1
| Answer here |
2. Richard has decided he would like to obtain a copy of his credit report from either Equifax or illion Data Registries (formerly Dun & Bradstreet). Explain what options are available for the chosen provider, how long it takes to obtain a copy, and the associated costs. (100 words)
Student response to Task 11: Question 2
| Answer here |
3. If there are errors on file, what are the options for Richard to follow in order to have these errors rectified? To assist you with answering this question, refer to the Equifax website. (150 words)
Student response to Task 11: Question 3
| Answer here |
4. What obligation does the Privacy Act impose on the Lender to supply the client, in terms of certain information, if they decline an application due to the content of the credit agency file? (100 words)
Student response to Task 11: Question 4
| Answer here |
5. What alternate options can you suggest to Richard and Pauline in the event that the loan was rejected by the lender you initially proposed due to a credit report? (150 words)
Student response to Task 11: Question 5
| Answer here |
Assessor feedback for Task 11 — Impact of credit history
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 12 — Dispute resolution
1. Due to delays in loan processing, Richard has lodged a complaint with you about the time it’s taking to get an approval on the loan. Although you’ve explained that this is because of delays with the lenders processing system due to staff shortages, you’re concerned the matter may escalate beyond your control.
(a) You are now required to record Richard’s feedback by completing the Customer Complaint Report below.
Student response to Task 12: Question 1a
| Customer Complaint Report | ||||
| Customer name | Answer here | |||
| Title (Mr, Mrs, etc.) | Family Name (surname) | Given names | ||
| Answer here | Answer here | Answer here | ||
| Service being provided to client | ||||
| Answer here | ||||
| Nature of complaint | ||||
| Answer here |
(b) Provide a response to Richard explaining the process going forward and what actions you will take regarding his complaint in the box below.
Student response to Task 12: Question 1b
| Answer here |
(c) Refer to the ‘Example of an Organisations Policies and Procedures’ document in the toolbox. Produce a short report which identifies and recommends ways that you may be able to improve these Policies and Procedures, to keep clients like Richard up to date on the progress of the loan application in the box below:
Student response to Task 12: Question 1c
| Answer here |
2. As a broker it is important to understand the role of the Financial Ombudsman. Explain the function and role of the Australian Financial Complaints Authority (AFCA) in the External Dispute Resolution (EDR) process and the options available to the claimant once a determination is made. (200 words)
Student response to Task 12: Question 2
| Answer here |
3. What could be the maximum financial compensation limit amount payable to a consumer borrower through AFCA for a claim for direct financial loss? (10 words)
Note: This may require some internet research.
Student response to Task 12: Question 3
| Answer here |
Assessor feedback for Task 12 — Dispute resolution
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Section 3: Case study 3 — Mary Jane Smith
Task 13 — Prepare and check a loan application
Mary Jane Smith: Client Background
Mary Jane Smith is a young professional, excelling in her career within the IT industry. She has saved hard and is ready to purchase a property of her own.
Her objective is to pay the loan down quickly and then use the equity in the property to purchase another. She would like to build a small property portfolio over the next eight to 12 years.
You have met with her a few times and exchanged several emails and telephone calls. She has complimented you on a few occasions for the service and guidance you have provided so far.
Mary has been cautious in finding and then negotiating the purchase of this property. It is now time to get an application to a lender. You have gathered appropriate documents and completed all necessary checks. Everything is looking positive to proceed.
1. Using the details in the Example Fact Find for Mary Jane Smith in the Toolbox, prepare a loan application by completing Appendix 3 in this written assignment.
2. Using the following list, select which basic items below will need to be gathered from Mary as the supporting documentation necessary for her loan application:
Personal details
☐ Birth certificate or driver’s license
☐ Passport or Birth certificate
☐ Bank debit card ☐ Medicare card ☐ Utility/Phone bill
☐ Last six months savings account statements
☐ Last three months credit card statements
Proof of income
☐ Three current pay slips
☐ Signed letter from employer on letterhead (must have ABN)
☐ Latest year’spersonal tax return and tax assessment notice
☐ If self-employed — last two-year financial tax return and assessment notices
☐ If self-employed and no financials — three of the following four:
☐ Last 12 months BAS returns
☐ Original signed letter from accountant detailing net income, and how it was ascertained
☐ Last six months business bank statements
☐ Last 12 months ATO tax portal statements from the ATO
☐ For rental properties — copy of last three months lease statements, copy of agreement or letter from real estate agent
Refinance
☐ Last six months loan statement
Property purchase
☐ Copy of contract/offer including title details
Construction
☐ Council approved plans and specifications
☐ Building contract
☐ Quotes for additional work
3. Before submitting Mary’s loan application, you must check her details thoroughly to ensure accuracy. Using the following two items available in the toolbox, check that the personal details and current employment details section of Mary’s Fact Find document and loan application are accurate and identify three (3) errors. Write your answer in the box below.
• example driver’s license
• example pay slip.
Student response to Task 13: Question 3
| Answer here |
4. Refer to the ‘Example of an Organisations Policies and Procedures’ document in the toolbox and provide at least two (2) examples in each question of how Mary’s loan application complies with each of the below:
(a) The organisational credit policy.
Student response to Task 13: Question 4(a)
| Answer here |
(b) Legislative requirements (particularly NCCP).
Student response to Task 13: Question 4(b)
| Answer here |
(c) Industry Code of Practice.
Student response to Task 13: Question 4(c)
| Answer here |
Assessor feedback for Task 13 — Prepare and check a loan application
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Section 4: Working in financial services
Task 14 — Financial services legislation and industry codes of practice
1. Conduct some research and identify two (2) websites that you could use to keep up to date with legislative changes and two (2) websites for changes in Industry codes of practice. (50 words)
Student response to Task 14: Question 1
| Answer here |
2. Describe the key features of:
(a) The National Consumer Credit Protection Act 2009. (150 words)
Student response to Task 14: Question 2(a)
| Answer here |
(b) The Privacy Act.
Student response to Task 14: Question 2(b)
| Answer here |
(c) Code of Practice.
Student response to Task 14 Question 2(c)
| Answer here |
3. How would you communicate any changes in legislation or codes of practice to colleagues? (100 words)
Student response to Task 14: Question 3
| Answer here |
4. An Australian Credit Licencee must maintain statutory records; such as financial records, membership certificates, insurance policies, training and risk assessment registers.
Explain how these could be managed to ensure they are secure and available for easy retrieval when updating is required. (50 words)
Student response to Task 14: Question 4
| Answer here |
Assessor feedback for Task 14 — Financial services legislation and industry codes of practice
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 15 — Design and produce a document
You have recently joined YS Finance, a small broking business. Your employer has asked you to design a personalised ‘CPD Register’ where you will record any training and personal development that you undertake in your role as a mortgage broker.
Using the organisational requirements from the ‘YS Finance Personalised CPD Register checklist’ in the toolbox, you will need to create a CPD Register in a new word document.
Your CPD Register should include a table with the following column headings:
• date
• activity
• duration
• content
• method
• location
• CPD points allocated.
Once you have created your CPD Register, you will need to do the following:
1. Save a copy of the CPD Register to your desktop.
2. Print the document.
3. Take a clear photo of the document and a screen snipping of the document from your screen.
To do this you will need to use the Snipping Tool on your device and a camera.
4. Insert a copy of the photo and the screen snipping into the box below.
Remember to do the following:
• Proofread your CPD Register prior to printing, to ensure there are no spelling errors.
• Adhere to all of the organisational requirements outlined in the ‘YS Finance Personalised CPD Register checklist’.
Student response to Task 15
| Answer here |
Assessor feedback for Task 15 — Design a produce a document
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Task 16 — Applying principles of professional practice to work in the financial services industry
As a mortgage broker, you are required to complete 20 points per annum of Continuous Professional Development (CPD). This task requires you to identify and evaluate appropriate professional development (PD) opportunities available to you in the industry. In this task, you will need to visit the Education and Events page on the Mortgage and Finance Association of Australia (MFAA) website: <https://www.mfaa.com.au/education-events/courses>.
Identify two (2) professional development events that you would like to attend after your studies and complete the table below.
Note: You can list events that are available online.
Student response to Task 16
| Course Name | Describe what the event is about | Why have you selected this event? | How will this event help you to develop professionally in industry? | As a non-member, what is the fee associated with participating in this event? | What is the CPD value? |
| Answer here | Answer here | Answer here | Answer here | Answer here | Answer here |
| Answer here | Answer here | Answer here | Answer here | Answer here | Answer here |
Assessor feedback for Task 16 — Applying principles of professional practice to work in the financial services industry
| (Insert Feedback) | |
| Question(s) that need to be resubmitted (if required) | (List question numbers) |
| First submission | |
| Resubmission (if required) |
Appendix 1: Key terms
1. In your own words, and using the grid below; define and explain loan transaction terminology and definitions of the following:
| Lender and borrower | Answer here |
| Lessor and lessee | Answer here |
| Mortgagee and mortgagor | Answer here |
2. In your own words, and using the grid below; explain what the different documentation required by a lender is:
| Credit check authority signed | Answer here |
| Guarantees | Answer here |
| Loan contract | Answer here |
| Periodical payment authority | Answer here |
| Signed application form | Answer here |
3. In your own words, and using the grid below; describe:
| The negotiation process | Answer here |
Appendix 2: Client information collection tool/Fact finder
Appointment date: Student to insert date
Appointment time: Student to insert time
| Applicant 1 | Applicant 2 | ||
| Surname | Answer here | Answer here | |
| Other names | Answer here | Answer here | |
| Contact details | Address | Answer here | Answer here |
| Phone (W) Phone (H) | Answer here | Answer here | |
| Mobile | Answer here | Answer here | |
| Answer here | Answer here | ||
| Employment | Answer here | Answer here | |
| How long? | Answer here | Answer here | |
| Previous employer (if less than two years) | Answer here | Answer here | |
| How long? | Answer here | Answer here | |
| Employment type (FT/PT/Casual/Self-employed) |
Answer here | Answer here | |
| Gross income (p.a.) | Answer here | Answer here | |
| Number of dependants | Answer here | Answer here | |
| Motor vehicles | Answer here | Answer here | |
| Loan purpose | Answer here | ||
| Purchase price/Valuation | Answer here | ||
| Deposit on property | Answer here | ||
| Loan amount | Answer here | ||
| Borrowing capacity (using Genworth serviceability calculation) | Answer here |
Assets and liabilities
| Assets | Liabilities | |||
| Details | Market value | Details | Monthly payments | Amount owing |
| Owner Occupied Property at: | Answer here | Mortgage with: | Answer here | Answer here |
| Investment Property at: | Answer here | Mortgage with: | Answer here | Answer here |
| Cash at bank (includes fixed deposits) |
Answer here | Car leasing | Answer here | Answer here |
| Other cash (includes offset accounts) |
Answer here | Personal loans 1. 2. | Answer here | Answer here |
| Deposit paid on property (only if paid) | Answer here | Overdraft | Answer here | Answer here |
| Motor vehicles: 1. 2. | Answer here | Other loans: 1. 2. | Answer here | Answer here |
| Personal effects | Answer here | Credit card limit: Answer here | Answer here | Answer here |
| Business value (if self-employed) | Answer here | Credit card limit: Answer here | Answer here | Answer here |
| Shares and investments | Answer here | Other: | Answer here | Answer here |
| Superannuation | Answer here | Other: | Answer here | Answer here |
| Other assets (give details) | Answer here | Other: | Answer here | Answer here |
| Total assets | Answer here | Total liabilities | Answer here | Answer here |
Surplus/deficiency: (Total assets less Total liabilities) $Answer here
| CURRENT MONTHLY LIVING EXPENSES (Provide a breakdown of the total amount listed in the case study — use your discretion) | |
| Food/housekeeping | |
| Insurance (e.g. motor vehicles, home contents/ building, medical, life/income protection) | |
| Utilities (e.g. rates, gas, electricity, transport) | |
| Transport (e.g. public transport, petrol, registration, repairs) | |
| Education (e.g. school, college, university) | |
| Dependents support (e.g. childcare, child maintenance) | |
| Entertainment (include online subscriptions, e.g. Netflix/Stan) | |
| Other (detail below): | |
| MONTHLY LIVING EXPENSES | Answer here |
Needs analysis
| 1 | Name of your current lender? | Answer here | |
| 2 | What type of mortgage loan do you have? | Answer here | |
| 3 | Why did you choose this particular loan and lender? | Answer here | |
| 4 | What is the interest rate? | Answer here | |
| 5 | What are your payments? | Amount | Answer here |
| 6 | Frequency | Answer here | |
| 7 | Do you know the fees and charges? | Answer here | |
| 8 | What is your proposed purpose for the loan you are applying for? | Answer here | |
| 9 | Branch access available with current lender | Answer here | |
| 10 | Internet banking available with current lender | Answer here | |
| 11 | Phone banking available with current lender | Answer here | |
| 12 | Lenders not to be considered | Answer here | |
| 13 | Type of loan sought | Answer here | |
| 14 | Preferred Interest rate range | Answer here | |
| 15 | Payment frequency | Answer here | |
| 16 | Redraw | Answer here | |
| 17 | Offset | Answer here | |
| 18 | Salary crediting | Answer here | |
| 19 | Low fees and charges | Answer here |
Notes
NB: Providing substantive notes here is a compulsory part of your assessment.
| Answer here |
Anticipated fees and charges
| Anticipated purchase price | Answer here |
| Deposit on property | Answer here |
| Loan amount | Answer here |
| LVR | Answer here |
| Purchase costs | |
| Stamp duty on transfer (include transfer fee) | Answer here |
| Solicitor/conveyancer (estimate) | Answer here |
| Rates and land taxes (estimate) | Answer here |
| Pest inspection (estimate) | Answer here |
| Building Inspection (estimate) | Answer here |
| Borrowing costs | |
| Application/establishment fee | Answer here |
| Valuation fee | Answer here |
| Security admin fee | Answer here |
| LMI | Answer here |
| Registration of mortgage | Answer here |
| Release of mortgage | Answer here |
| Search fees | Answer here |
| Other | Answer here |
| Total purchase and borrowing costs | Answer here |
Funds to complete
| PURCHASE AND LOAN COSTS: | AVAILABLE FUNDS: | ||
| Purchase price: | Answer here | Deposit if paid | Answer here |
| Lender application/valuation fees: | Answer here | Cash savings: | Answer here |
| Transfer stamp duty/transfer fee | Answer here | Sale proceeds: | Answer here |
| Government registration fees | Answer here | Gift: | Answer here |
| Solicitors fees: | Answer here | FHOG: | Answer here |
| Other | Answer here | Other: | Answer here |
| Lenders Mortgage Insurance Added to Loan Yes / No | Answer here | Other: | Answer here |
| TOTAL COSTS (A): | Answer here | TOTAL OWN FUNDS (D): | Answer here |
| LOAN AMOUNT REQUESTED (B): | Answer here | OWN FUNDS REQUIRED (A–B) = C: | Answer here |
| OWN FUNDS REQUIRED (A–B) = C | Answer here | SURPLUS/SHORTFALL (D–C) | Answer here |
Loan interview diary
Name(s) of client(s) present at interview
| Answer here |
Date of interview
| Answer here |
Location of interview
| Answer here |
Indicate all clients who were interviewed in person
| Answer here |
Do all of the clients appear to clearly understand English? Y/N
If not, have the services of an interpreter been recommended? Y/N
Do all of the clients clearly benefit from taking out this loan? Y/N
If not, what inquiries have been made to ascertain the level of benefit to each party of the loan?
| Answer here |
Are any clients acting as though they are under duress or other disability? Y/N
Are any clients acting as though they are unsure of anything about the loan? Y/N
Are any of the clients acting as though they are unable to comprehend their obligations? Y/N
Are there any guarantors? Y/N
If yes is answered to any of the above questions, have the clients been advised to seek
the services of a lawyer or financial adviser? Y/N
Provide details of other pertinent information obtained during the loan interview which may be of interest or of any unusual circumstances you may wish to record.
| Answer here |
Appendix 3: Loan application
Cover sheet
| Applicant name | Answer here |
| Broker name | Answer here |
| Contact phone/Mobile | Answer here |
| Email address | Answer here |
Solicitor/conveyancer details
| Name | Answer here |
| Address | Answer here |
| Contact phone/Mobile | Answer here |
| Email address | Answer here |
Loan summary
| Loan amount | Answer here |
| Loan term | Answer here |
| Variable or Fixed rate | Answer here |
| Principal and Interest or Interest only | Answer here |
Broker notes and recommendation
| Answer here |
Loan application details
| Applicant 1 | Applicant 2 | ||
| Personal details | |||
| Surname | Answer here | ||
| Other names | Answer here | ||
| Date of Birth | Answer here | ||
| Marital Status | Answer here | ||
| Number of Dependents | Answer here | ||
| Contact details | Current address | Answer here | |
| Time at address | Answer here | ||
| Phone (W) Phone (H) | Answer here | ||
| Mobile | Answer here | ||
| Answer here | |||
| Previous Address (if less than 2 years) | Answer here | ||
| Current employment details | |||
| Employer and contact details | Answer here | ||
| Job Title | Answer here | ||
| Employment type (FT/PT/Casual/Self-employed) |
Answer here | ||
| How long? | Answer here | ||
| Previous employer (if less than two years) | Answer here | ||
| How long? | Answer here | ||
| Employment type (FT/PT/Casual/Self-employed) |
Answer here | ||
| Income details | |||
| Gross salary per annum | Answer here | ||
| Monthly net salary | Answer here | ||
| Social security | Answer here | ||
| Pension | Answer here | ||
| Other — specify | Answer here |
Loan details
Loan product 1
| Product name | Answer here | Loan amount | Answer here |
| Loan term (years) | Answer here | Interest | Answer here |
| Loan purpose | Answer here | ||
| Options required |
Security details
Security property 1
| Address of property | Answer here | ||
| Estimated value/purchase price | Answer here | ||
| Property type | Answer here | Number of bedrooms | Answer here |
| LVR | Answer here | Approx. floor area (if known) | Answer here |
Assets and liabilities
Savings, term deposits and other accounts
| Name of institution | Account type | Owner | Current balance |
| Answer here | Answer here | Applicant 1: % Applicant 2: % | Answer here |
Investments including superannuation, life insurance, shares, trusts
| Name of institution | Investment type | Owner | Current balance |
| Answer here | Answer here | Applicant 1: % Applicant 2: % | Answer here |
Motor vehicles
| Make and model | Year built | Owner | Market value |
| Answer here | Answer here | Applicant 1: % Applicant 2: % | Answer here |
Other assets including personal effects, cash, boats, tools of trade etc.
| Personal effects and household items (furniture, electrical goods, clothing, jewellery, etc.) |
Applicant 1: % Applicant 2: % | Answer here |
| Others | Applicant 1: % Applicant 2: % | Answer here |
| Total assets | Answer here |
Liabilities
Credit cards
| Name of Lender | Borrower | Interest rate | Limit | Balance |
| Answer here | Applicant 1: % Applicant 2: % | % | Answer here | Answer here |
| Answer here | Applicant 1: % Applicant 2: % | % | Answer here | Answer here |
Other loans
| Lender and loan type | Borrower | Loan repayment | Limit | Balance |
| Applicant 1: % Applicant 2: % | $ | $ | $ | |
| Total liabilities | Answer here | |||
| Surplus/deficiency | Answer here |
The post Industry Knowledge and the Lending Process appeared first on My Assignment Online.