Reference no: EM132399874

Section 1: Case study 1 - Philip and Jennifer Brown

Task 1 -Key terms,gathering and documenting client information

1. Complete the ‘Key terms' (located at the end of the written assignment inAppendix 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 CIVMBv5 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.

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 paythe 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)

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)
(b) Identify appropriate product options you can present to the clients that may remove this interest rate risk?(50 words)

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)

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 andexplain why these enquiries are important in terms of NCCP compliance. (200 words)

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)

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)

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)

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)

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)

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'sPolicies 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)

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)

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)

3. What other option/s can you suggest if they remain uncertain about whether to fix the rate on their loan?(100 words)

Section 2: Case study 2 - Richard and Pauline Jackson

Task 8 - Establishing level of financial knowledge

1. What communication skills wouldyou use to establish rapport and build a relationship with clients.(150 words)
2. Refer to the ‘Example of an organisation's policies and procedures' document found in the toolbox and outline what service standards you should meet to provide a high level of service to clients. Include timelines for returning client enquiries etc. in your response. (150 words)
3. List two (2) questions that you would use to effectively communicate with the clients to confirm Richard and Pauline's understanding and knowledge about credit and finance.
List a further two (2) questions that you would ask to identify or confirm their current financial position, including establishing their requirements and objectives with the refinance?
Advise where you would record the client's responses. (150 words)

Task 9 - 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)

2. What are the benefits of debt consolidation for Richard and Pauline? (100 words)

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. They will not be including the landscaping supplies business expense as they pay this in full each month and will clear the outstanding $500 from business account.

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.

4. What savings will Richard and Pauline obtain in monthly repayments?
(Remember to show the calculation of how you determined the savings). (100 words)

Task 10 - 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)

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)

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)

Task 11 - 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.

Task 12 - 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)

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)

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)

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)

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 creditreport?(150 words)

Task 13 - 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.

(b) Provide a response to Richard explaining the process going forward and what actions you will take regarding his complaint in the box below.

(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 improvethese Policies and Procedures, to keep clients like Richard up to date on the progress of the loan application in the box below:

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)

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)

Task 14 - Effective access to files

The loan application is finally approved. Loan offers have been produced by the lender, as have numerous documents that the client needs to access and review. The lender has requested these documents be forwarded as soon as they are available. Richard and Pauline are away at the moment and their email provider has a size limit on the data that can be sent via email. Name a service provider that could assist in solving this problem and explain how the service could assist with solving this problem.(70 words)

Section 3: Case study 3- Mary Jane Smith

Task 15 -Prepareand check a loan application

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:
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
• examplepay slip.

4. Referto the ‘Example of an OrganisationsPolicies 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 organisationalcredit policy.
(b) Legislative requirements (particularly NCCP).
(c) Industry Code of Practice.

Section 4: Working in financial services

Task 16- 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)
2. Describe the key features of:
(a) The National Consumer Credit Protection Act 2009.(150 words)
(b) The Privacy Act.
(c) Code of Practice.
3. How would you communicate any changes in legislation or codes of practice to colleagues?(100 words)

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)

Task 17 -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'.

Task 18 -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)

Task 19 - Develop and maintain in-depth knowledge of products and services used by an organisation
1. There are three (3) main types of products used in finance and mortgage broking:variable rate home loans, fixed interest rate home loans and a line of credit.
Using the table below, define each product, its strengths, its weaknesses and how it is promoted. You should list at least two (2) strengths and two (2) weaknesses for each product.
2. This exercise requires you to compare refinancing options for a home loan to report on the benefits and disadvantages of selecting a particular refinancing option.

3. You now need to examine the current rate, comparison rate and monthly repayment applicable to refinancing a home loan by comparing home loans.
Enter the following details to compare:
Loan amount: $350,000
Loan purpose: Refinance
Type: Variable rate loan
State: NSW
Using the Sort feature on the website, fill in the table below for the product with:

4. Answer the following questions about home loan products.
(a) As a mortgage broker, how would you keep informed about updates to the various home loan product options in your organisation or elsewhere?
(b) Describe one (1) emerging trend in variable rate home loans.

Attachment:- Finance and Mortgage Broking.rar