End Of Chapter Questions Assignment

END OF CHAPTER
QUESTIONS

Table of Contents
CHAPTER 4....................................................................................................................................5
4.1 Email designed to overcome the reluctance of the clients.....................................................5
4.2 ................................................................................................................................................6
(a) Software applications to calculate a client's financial position..............................................6
(b) Audit Program to evidence that clients received the So Sweet credit guide..........................6
(c) Email to the mentor summarizing broker's efforts on a weekly basis....................................6
(d) Mechanism to ensure the currency of regulatory literature is distributed in a timely fashion
in accordance with organisational policy. ...................................................................................6
(e) Ensuring operational procedure is updated and reflects changes to regulation and
legislation as well as their implications.......................................................................................7
(f) Calculate the cost of implementing triple bottom line principles in an office with no eco
policies.........................................................................................................................................7
(g) Email enquiring if any staff would like to undertake the triple bottom line implementation
process as a business opportunity. ..............................................................................................7
4.3 Situation when a finance broker act as a limited agent of a credit provider..........................8
4.4.................................................................................................................................................8
(a) Developing and cultivating the relationship, in order to market and benefit the organisation
......................................................................................................................................................8
(b) Cooperating with other professionals and third parties to expand and enhance the
reputation of the organisation and to identify new and improved business practices.................8
(c) Following up with referrals to secure the new business relationship.....................................8
(d) Media , Marketing and public relations tools used for the business......................................9
(e) Identifying potential buyer’s motives and approaches related to each...................................9
4.5 Case Study.............................................................................................................................9
CHAPTER 5..................................................................................................................................14
5.1 Documentation of changes in First Home Owners Grants and Stamp Duty Concessions. .14
5.2 Concept of a 100% loan.......................................................................................................14
5.3 Concept of split and blended loans......................................................................................14
5.4 ....................................................................................................................................14_final

(a)Concept of a line of credit loan ............................................................................................14
(b) Concept of Interest-only Loan..............................................................................................15
5.5 Case Study...........................................................................................................................15
CHAPTER 6..................................................................................................................................15
6.1 Stages involved in Loan Application Process......................................................................15
6.2 The 5Cs important in establishing credit-worthiness..........................................................17
6.3 Concept of Loan-to-Value Ratio (LTV)..............................................................................18
6.4 Difference between Pre-approval and Pre-Qualification.....................................................18
CHAPTER 11................................................................................................................................19
11.1 Difference between Contract Law and Common Law......................................................19
11.2 Key elements within Insurance Contracts Act, 1984........................................................20
11.3 Credit Activities defined under the National Consumer Credit Protection Act (NCCPA),
2009............................................................................................................................................20
11.4 Obligations of an ACL Licensee as well as penalties prescribed under National Credit
Act in regards to non-compliance with legislations and obligations.........................................20
11.5 Case Study:.......................................................................................................................21
CHAPTER 12................................................................................................................................22
12.1 The most common risk assessment techniques..................................................................22
12.2 External and Internal Risk Drivers....................................................................................23
12.3 The risk management process and treatment options available to manage risk................23
12.4 Distinctions between Monitoring and review processes in risk management...................24
12.5 Case Study.........................................................................................................................24
CHAPTER 13................................................................................................................................27
13.1 Diversification or Cross-Sell..............................................................................................27
13.2 The industry participants that may help to build a mortgage/finance brokers’ business...27
13.3 Ways in which a Mortgage/Finance Broker develop and nurture professional
relationships...............................................................................................................................27
13.4 Importance of maintain business relationship ...................................................................28
13.5 Case Study.........................................................................................................................29
CHAPTER 14................................................................................................................................32

14.1 Ways to manage interaction between credit risk and business objectives in an
organization................................................................................................................................32
14.2 Lenders deals with debtors in different circumstances......................................................32
14.3 Typical circumstances that lead to personal insolvency situations...................................32
14.4 Ways in which a lender can register security for a loan ...................................................33
CHAPTER 15................................................................................................................................33
15.1 Invoice discounting............................................................................................................33
15.2 The appropriate procedures involved in the implementation process of a complex
business loan structure ..............................................................................................................34
15.3 Various entities who may wish to purchase a vehicle the appropriate finance options as
part of the implementation solution...........................................................................................34
15.4 Documentation needed in each of the steps arranging a novated lease.............................35
15.5 Case Study.........................................................................................................................35
CASE STUDY...............................................................................................................................36
1. Eligibility of clients under First Home Owners Grants or Stamp Duty Exemptions
applicable in Victoria (VIC)......................................................................................................36
2. Documents required by clients to be submitted for the application of a mortgage loan and
their need....................................................................................................................................37
3. Responsibilities as a mortgage broker under the anti-money laundering legislation............37
4. Measures to avoid committing unconscionable, misleading or deceptive conduct...............38
5. Loan recommended to the clients..........................................................................................38
6. Recommending a portability feature within the loan for clients............................................38
7. The loan-to-value ratio and its implications on the lender's decision for granting loan........38
8. Monthly payments of an interest-only loan if the interest rate is 7% per annum..................38
9. The initial monthly repayment for a variable loan if the interest rate was 7% and the loan
term was 25 years.......................................................................................................................39
10. Detailed remuneration arrangement in regards to the services provided.............................39
REFERENCES..............................................................................................................................41

CHAPTER 4
4.1 Email designed to overcome the reluctance of the clients
ABN 00 313 577 213
100 Arthur Street Fitzroy Vic 3065 || [phone] || [e-mail]
11th March 2019
Mr. & Mrs. Basil Butler
6/175 Fitzroy Street,
Fitzroy, Vic 3065
Dear Basil and Daisy
Subject:
In Response to the query of recommended variable interest rate product including offset
account
We thank you for the opportunity for choosing us as your priority lender. As per our last
discussion regarding the suitable loan for your requirements, it was concluded that mortgage
loan with a variable interest rate inclusive of an offset account would be most desirable for you.
Variable home loan may benefit you by enabling lower interest payments in the initial years.
Also, it has low redrawing facility as compared to other loan products. An offset account in the
loan plan will help you link your savings or transactions with home loan account easily. This
option shall help you in providing you a daily 'offset', thus, charging interest on the difference
between the total loan and offset amount.
This would result in saving thousands of dollars paid as interest on the loan taken. Hence,
proving cost-effective instead of being an expensive investment. The common wall between the
two apartments is actually a weight bearing wall. That is why there is a lot of work; we have to
install the iron beams to maintain support structure of the building while taking away sections
of the wall to make the access you need.
Please reconsider the option recommended. We look forward to discussing this in detail with

you.
Kind Regards,
XYZ
4.2
(a) Software applications to calculate a client's financial position
Serviceability calculator has been used to calculate the financial position of Basil
(Eldridge and Crombie, 2013).
(b) Audit Program to evidence that clients received the So Sweet credit guide
Procedures Checklist
Receive client information ✓
Communicate with prospective client ✓
Provide Client with loan application form ✓
Provide Client with So Sweet Guide ✓
(c) Email to the mentor summarizing broker's efforts on a weekly basis
Internal monitoring programme include:
 audit of disclosure documentation
 financial service reforms
 loan documentation audit
 monthly journal audit
 qualification checks
(d) Mechanism to ensure the currency of regulatory literature is distributed in a timely fashion in
accordance with organisational policy.
Organizations create rules for the creation of documents to provide uniformity including
layout, heading styles, spelling, abbreviation, punctuation, capitalization, tone and register.
The Corporations Act in section 286(1) states that a company must keep written financial
records that:

 correctly record and explain its transactions and financial position and performance,
and
 would enable true and fair financial statements to be prepared and audited
Financial records are defined in section 9 of the Corporations Act as including:
 invoices, receipts orders for the payment of money, bills of exchange, cheques,
promissory notes and vouchers
 documents of prime entry
 working papers and other documents
Implementation of these laws as organisational policies will help in the assurance of
distribution of regulatory literature in a timely fashion.
(e) Ensuring operational procedure is updated and reflects changes to regulation and legislation
as well as their implications
(f) Calculate the cost of implementing triple bottom line principles in an office with no eco
policies
Work planning in organizational frameworks is now to incorporate and support triple
bottom line principles. It therefore falls to the financial services industry (and indeed, to all
industries) to identify sustainability issues where they arise and then incorporate principles,
practices and available tools and techniques of sustainability management that are relevant to the
context of the financial services industry. This of course takes some degree of skill and planning
to implement. As there are no eco policies implemented in the office, it is difficult to calculate
the cost for such principles based on dollars. However, most of the businesses use TBL Index
that is based on taxes paid, average hours of training of an employee, water consumption and
amount of waste generated.
(g) Email enquiring if any staff would like to undertake the triple bottom line implementation
process as a business opportunity.
ABN 00 313 577 213
100 Arthur Street Fitzroy Vic 3065 || [phone] || [e-mail]
11th March, 2019
Dear Staff,

Greetings for the day!
This is in regards to the triple bottom-line implementation in the firm. It has come to our
knowledge that a triple-bottom principle would help in enhancing sustainability and
profitability in the organisation. For this purpose, we would like to have some volunteers from
the staff willing to undertake this business opportunity. Please provide us with your details by
14.00 hours by March 8, 2019.
Thank you.
Kind Regards,
XYZ
4.3 Situation when a finance broker act as a limited agent of a credit provider
Cases where agents might be approved to bind the principal in a contract with a third
party and with regards to some types of credit facilities finance broker may act as limited agent.
4.4
(a) Developing and cultivating the relationship, in order to market and benefit the organisation
Networking groups and events is preferred to gather various brokers. It is more reliable as
large amount of brokers can be informed and made available at one place. From personal
network telemarketing mode of communication is selected as they can be given complete details
directly over telephones. Understand buyer motive and explaining them the benefits ensuring
them that they have a call to action to solve their grievances. The usual time-frame for
prospecting may be on a daily, weekly, monthly or quarterly basis.
(b) Cooperating with other professionals and third parties to expand and enhance the reputation
of the organisation and to identify new and improved business practices
To enhance the reputation of the organisation it is important to cooperate with other
professionals and third parties. In order to do so, one can follow-up with referral businesses
using appropriate medium of communication to nurture and develop new as well as
existing relationships (Khanam, 2016). Also, professional networking modes are also
utilized to promote market and enhance goodwill of the organisation. This can be done
through award ceremonies, seminars and conferences as well as sports and special events
or outings.