Reference no: EM132475814

Course - FNS50315 Diploma of Finance and Mortgage Broking Management, AAMC Training Group, Australia

FNSFMB402 Identify Client Needs for Broking Services - Loan Application Process Assessment

Task 1: Case Study - Loan application preparation

You will notice that there are two options of Case Study within this assessment - the first (A) is more specifically for Mortgage Brokers, the second (B) for brokers in the Plant &Equipment and Motor Vehicle field. Please complete only the stream relevant to you and indicate this on the assessment cover sheet.

Choosing one of the case studies presented below, prepare a loan file from contact with the clients to preparing the loan application for lodgement with the client's lender of choice.

In completing this task, you need to demonstrate to your assessor that you are competent in the following areas and able to:

- communicate ideas and information

- collect, analyse and organise information

- plan and organise activities

- work with others in a team

- use mathematical ideas and techniques

- solve problems by providing solutions

- use technology.

To do this you will need to compile a report (Client Needs Review/Fact Find) indicating your thoughts and processes on different aspects of your application. These may include, but are not limited to:

- the choice of loan product for your client and the information about the loan product that you presented to them. Where you located the product information. Remember there is no right/wrong answer to this area, it is always subjective.

- the use of technology to compare the product/fees, find information on the products etc.

- how you would work in a team situation with your co-workers, lenders, real estate agents, mentor etc.

In areas where you do not have copies of actual supporting documentation, insert a page with the name of the document you would include e.g. copy of driver's licence for the client.

There are a number of templates in the Member's Area under 'Useful Resources' that you could use in your submission.

Remember there is no right or wrong answer as each client you see presents a new challenge and if you can provide solutions for those challenges you will be well regarded and successful in this industry.

Because this course is taken nationally, we ask that you localise addresses and places of employment so that you can have familiarity with the assessment.

You will have to take into account any necessary adjustment of stamp duty concessions for first home buyers. This will have to be considered when discussing and setting out the fees and costs with your clients. You will have to contact your Office of State Revenue to determine the correct amount of benefits to which your clients are entitled.

Case study A - Residential mortgage

Case study B - Asset Finance Motor Vehicles

Task 2: Report/Written Test - Process Applications for Credit (Mortgage Loans Only)

You are required to demonstrate that you understand the lenders policy and procedures for processing an application for credit i.e. from the point of view of a lenders credit analyst. Once your loan application is ready to be submitted you must provide supporting evidence that you have:

Checked and verified application details including all information to support the application are in accordance with the lenders credit policy and procedures.

Your assessment decision to recommend the credit application refers to/is within the lenders policy and procedures.

Maintaining application records and completing necessary documentation are according to the lenders legislative requirements and lenders organisational policy and procedures.

Overall, to support your understanding of how an application for credit is processed by the lender; you are required to complete research and provide the following information which is also covered in the learning material:

Detailed notes regarding the lender's organisational approval policy and procedures for the chosen product in your selected case study. Briefly explain why the loan met the policy guidelines and how you researched the product and the guidelines. Including maximum LVR, serviceability ratio, minimum loan etc. If you are unable to access the lenders information readily the alternative is to access the Lender Mortgage Insurers (i.e. Genworth/QBE) guidelines which are readily available on their web pages. Although the case studies provided did not require LMI it is helpful to understand policy guidelines as many types of lenders and loans require LMI cover.

Explain the approval guidelines i.e. who can approve/delegation; timeframes etc.

Ensure you are adherence to relevant legislation with reference to checking and verifying application/client details and maintaining records i.e. how file and records are maintained, how movements/milestones are monitored etc.

Task 3: Report/Written Test - Completing Customer File

You are to submit a fully completed loan application form as well as:

A lenders cover sheet detailing the background of the applicants, structure of the loan, loan product applied for, serviceability criteria.

Supporting documents for the loan submission as requested by the lender

Finally as a result of your client interview, completing relevant client documents and loan application for the lender; you are now required to complete the remainder of customer file supporting several of your obligations and responsibilities as a Finance Broker. These important steps being the approval process, documentation, settlement and ongoing relationship management. In areas where you do not have copies of actual supporting documentation, insert a page with the name of the document, an explanation of the document and its purpose. You would include e.g. copy of formal/unconditional approval stating conditions of settlement.

There are a number of templates in the Member's Area under 'Useful Resources' that you could use in your submission.

You are required to submit your customer as determined by the chosen case study. Therefore your file information must contain the following:

1. Adding to your Interview Notes - Customer Contact Sheet/Record

You should have already documenting regular communication pre your loan submission. These interview notes incorporate all the correspondence from initial contact to loan preparation and submission. You are now required to provide interview notes from loan submission to post loan application process; with all parties specifically including:

- Customer

- Bank/s

- Referrer/s

- Government bodies, i.e. Stamp Duty, FHOG/ Revs

- Property Valuators

- Settlement Agent

2. Advice of Loan Approval

Evidence of communication with customer and other relevant parties regarding:

- Communication of formal/unconditional approval to customer i.e. lender letter of offer;

- Letter to client regarding documentation/settlement expectations;

- Communication with Real Estate Agent, Settlement Agent, etc.

3. Document Sign-Up/Settlement Preparation

- Document sign-up checklist and covering letter /communication;

- Correctly signed mortgage documents;

- Insurance details;

- Authority to disburse funds;

- Settlement checklist.

4. Advice of Transaction Completed/Finalised

- Communication of successful settlement;

- Letter/survey to client asking for client satisfaction feedback on services/support provided. You may wish to ask for referral to friends and family.

Task 4: A (Activity) and B (Short Answers)

Create a customer/referrer database

A. The relationships built in Task 1 Case Study were the clients, referrer, settlement agent and real estate agent.

Prepare a database on contacts made from this task by using your internal customer record system or suitable program, i.e. Microsoft Excel spreadsheet. You are required to submit the Excel file (or PDF/screenshot if other software is used), showing your database layout.

B. Additionally, answer the following questions in relation to your database and building/managing your business contacts:

1. Why is important to build a database of clients/referral sources?

2. Why is it important to develop professional relationships?

3. When is it not appropriate to contact a person and why?

4. Why is it important to have effective interpersonal styles and methods when dealing with clients/referrers? Why is it important to consider special needs, culture, race, religion, origin, demographics?

5. Explain why you think it would be important to follow up any business referrers as quickly as possible.

6. What methods could you use in developing new business i.e.; advertising and promotion of your services?

FNSFMB502 Identify and Develop Complex Broking Options for Client - Complex Lending Assessment

CASE STUDY Overview

In order to achieve competence, you will need to demonstrate a clear understanding of complex loan scenarios, proving you are competent at Diploma level. This case study will determine your understanding of the complexities of various loan scenarios and the outcome for your clients.

The requirements for this case study is to prepare a submission for assessment in two parts.

Submission Part 1 - Fully completed set of NCCP Act Compliance documents including related interview and diary notes.

Submission Part 2 - Fully completed loan submission to the lender/s of your clients' choice. Please also note at this stage we have options for you to choose given the industry area you are currently servicing e.g. Investment property loan, Commercial/Business Loan, Self-Managed Superfund Loan or a Plant and Equipment loan. You make the choice but all required documents (no matter what industry you select) must be enclosed.

Please ensure the following documents and processes are included in your client and loan submissions in the following order:

Submission Part 1 -

A completed Client Needs Review/Fact Find form which has allowed you to review and research your client's information.

A client signed Privacy Consent form to exchange personal information with other third parties. Because of the variances in the make-up of a number of the compliance forms used by the industry, this authority may already be included in the Credit Guide or other such compliance documents. At the end of the day, they all have the same meaning and intent.

A completed Statement of Credit Advice or a Credit Quote or a Credit Proposal Disclosure Document which you have presented to your clients' with the recommendation of a lender. Your recommendation will in all probability provide the solution the clients are seeking. It should be in the appropriate format that the clients will easily understand. This document also serves as your authority to proceed with the lodgement of the loan application.

Complete Preliminary Assessment Checklist

Completed Credit Quote

Provide a completed Compliance Checklist

You must be satisfied that you have outlined the process that is required for the client to obtain appropriate finance and the risks (potential and real) of which your client should be aware.

Submission Part 2 -

A completed AAMC Training Assessment Cover Sheet in which you acknowledge the submission is all your own work.

A fully completed loan application which will contain all documentary financial evidence to support the application such as:

Financial Statements, Tax Returns, Trust deeds etc.

Cash Flow Forecasts

Offer and Acceptance or Contract of Sale for any purchase of real estate/ Invoice or Offer to Purchase from a supplier for Plant and Equipment

Evidence of any other debt your clients may have which allows a serviceability to be completed with all available facts.

A Serviceability Assessment to show clients can afford the loan requested.

Notes to the lender addressing the points as listed in line with the course notes titled lenders submission lender notes, for example: Applicants' details including history and needs, Purpose of loan, Brief details and value of security, Brief details of loan make-up and Loan amount requirement.

A SWOT analysis - refer to appendices for template of this document, you should also refer the results of your analysis in your notes to the lender.

A Financial Ratio Analysis - A minimum of one or more if appropriate to be completed and the results mitigated/supported in your notes to the lender

Reasons for major variations in the 2 years financial statements included in this assessment.

Evidence requirements -

In order to be deemed competent, you will need to evidence the ability to:

Develop detailed broking options designed to maximise the client's outcomes and reach client objectives which incorporate elements from research and which address complex needs and issues

Identify and describe key assumptions upon which the plan is based

Provide a detailed analysis of research strategies and findings

Test and make appropriate checks on a proposed plan for its integrity and compliance

Assess the impacts of taxation, social security, economic and other government policies on client investment and financial requirements taking care not to provide financial advice unless licensed to do so

Interpret and comply with industry regulations and codes of practice

Identify the roles of associated financial advisers and work effectively with them

Identify and document the situations where the client/s should be referred to an associated financial advisor for professional advice

Assess broking options, financial markets and investment characteristics

Use appropriate sales and marketing methodologies and provide justification and research evidence

Gain client feedback on and/or agreement to the plan

Prepare materials and personnel to effectively implement complex loan structures

Establish appropriate audit trails and effectively document records, diary notes and data

Demonstrate that effective and appropriate follow up and feedback systems are in place to track progress of the loan application and to keep client/s informed

Knowledge requirements -

To be deemed competent you must be able to demonstrate a comprehensive knowledge of:

Acts and regulations affecting the financial industry

Legislation impacting on financial services, including environmental, corporations and consumer legislation and State and Territory legislation, charges and taxes

Relevant codes of practice

NCCP Act disclosure requirements

The role of mortgage/finance brokers

Products available in the financial services industry

Sources of information on financing such as lenders, government departments, accountants, solicitors and financial planners

Methods of presenting financial data

Credit assessment

Risk Assessment

Valuation practices and methodology.

Attachment:- Finance and Mortgage Broking Management Assignment Files.rar