Identify and Interpret Compliance Requirements

This assessment task focuses on identifying and interpreting compliance requirements in mortgage broking. It covers topics such as the unsuitability test, credit guide, code of ethics, and APRA's attitude towards bank lending for investment properties.

Certificate IV in Finance and Mortgage Broking
Assessment Task
FNS40815
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Assessment
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marking. Assignments will not be returned to you as they need to be retained for by us for
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Task Assessments Total
Mark
Pass
Mark
Actual
Mark
1 Identify and Interpret Compliance Requirements 27 19
2 Deliver and Monitor a Service to Customers 39 27
3 Contribute to OHS Hazard Identification & Risk Assessment 41 29
4 Manage Personal Work Priorities and Professional
Development
24 17
5 Develop and Nurture Relationships with Clients, Other
Professionals and Third Party Referrers
17 12
6 Promoting the Effective Use of Credit 15 10
7 Prepare a Loan Application on Behalf of Mortgage Broking
Clients
64 45
8 Steps Taken by the Credit Provider 23 16
Total 250 175
Assessor’s Initials: ____________________
Assessment Date: ____________________

Introduction
Objective The objective of this Assessment Task is to
demonstrate that you have the skills and knowle
required to conduct a client relationship and com
with statutory, industry and organization complia
requirements.
Elements to be assessed To achieve this objective, you will need to demo
your ability to:
The assessment tasks in this assessment will a
to demonstrate your knowledge and skills in re
these elements.
Assessment process Start by:
1. Reading the Assessment Task.
2. Type your answers to the assessment ta
this template document (hand-written answers
accepted)
3. Submit your completed document by up
it on the ‘Ready for Assessment’ a
www.CPDplus.com
Don’t forget to keep a copy and retain it for 12 month
Need help? If you have any questions or would like to request a
copy of this assessment task, please email the Ment
Support Team at
Statement of Completion Upon successful completion of this assessment
will be awarded the Statement of Completion for
FNS40811 Certificate 4 in Finance and Mortgag
Broking.

Task 1: Identify and Interpret Compliance Requirements
1. Identify
compliance
requirement
s
Mortgage brokers face important compliance requirements, the
foremost among them being the reasonable lending provisions of the
NCCP Act. The penalties for non-compliance include loss of license (for
businesses) and removal from the industry (for individuals). If fraud is
involved there may also be the criminal penalties of fines and / or
imprisonment.
Compliance requirements are not static. It is therefore important to stay
up to date with them.
Mortgage brokers also need to keep up-to-date with the actions of the
regulatory authorities such as APRA and the Reserve Bank. Their
actions may not amount to direct regulation, but through their effects on
interest rates and bank lending these authorities can have a very direct
impact on the business mortgage brokers are able to do.
(a) A key requirement of the responsible lending obligations is the ‘unsuitability test.’ What
must a mortgage broker do to comply with the unsuitability test?
No Mark
1. Conduct reasonable and appropriate enquiries regarding borrower’s key
requirements, necessities and targets
/1
2. Conduct reasonable and appropriate enquiries regarding borrower’s current
financial positions
/1
3. Perform reasonable and appropriate measures to verify and examine
financial position
/1
(b) List the sorts of items a client’s requirements and objectives could include (as indicated by ASIC).
Mark
 Required amount of loan, or highest sum amount wanted.
 Specific duration or time-frame for which loan is acquired.
 The intent and advantage sought and that the customer requires specific
product characteristics or versatility, and recognises the expenses of these
characteristics and any added risks.
/2
(c) Leading credit providers and other financial organisations have code of ethics, sometime called codes of
conduct. Select one of them and summarise it by itemising its main principles.
Mark
False And Mislead Conduct–The Australian Consumer Law (ACL) restricts
false or fraudulent conduct and fraudulent claims by companies in business or
trade. Tribunal can enforce monetary punishments, issue court orders to avoid
continuing or repeating the forbidden conduct, or order that certain actions be
/4

undertaken such as cancelling agreements and granting damages. Offense
also coincides with criminal code violations and penalties and prison
sentences can be levied as well.
Sub-total /9
Continued
(d) In point form, list the key information that the NCCP Act requires to be contained in a Credit Guide.
Mark
A credit guide required to be in written form and must specify:
 Name of the licensee, his contacts information along with Australian-
credit licence no.
 Details about fees-payable as well as charges-payable by client.
 Details about commissions which is receivable from the moneylender.
 Names of 6 prime licensees.
 Information regarding the processing of complaints, along with contact
information regarding internally and externally dispute settlement
procedures.
 Details regarding the current obligations of the applicant to provide, after
request, written copy of unsuitable evaluation.
 Presenting credit guidelines should seem like a formal requirements but
it is a way to introduce business to the consumer and explain what it can
do in a positive way. however it also provides an occasion to explain
certain company characteristics like the variety of services offered and
the processes for addressing grievances that the organisation is
expected to have.
/3
(e) It is important to keep up to date with compliance requirements so that the required changes can be made
to organization procedures and product offerings. Suggest three sources that you can use.
Mark
1) First one is Professional associations bodies like Finance Brokers
Association of Australia (FBAA) and Mortgage and Finance Association
of Australia (MFAA), as well as communicate its members of alteration in
any requirement prior to happen.
/3

2) Secondly codes of these professional associations regarding practice
may be utilised as effective guide line for compliance's requirements.
3) Lastly, bigger mortgage-broking entities normally employ compliance
officers as they aid practitioners to comply with relevant standards.
(f) Explain the requirement for Australian Credit Licensees to keep a training register.
Mark
ASIC entails a corporation to document conformance policies, while it
recognizes that verification levels will differ from comprehensive policy and
processes handbooks in bigger organizations to check-lists in smaller entities. It
is enforced and sustained once a conformance structure has been formed.
Throughout this phase, training does have an essential function but it's not
sufficient in its own. Compliance and moral behaviors must become a prevailing
organizational value.
/2
(g) Explain APRA’s current attitude towards bank lending for investment properties.
Mark
The Australian Prudential Regulation Authority (APRA) has instituted restrictions
which have affected investment and borrowing. The banks adapted to
amendments in APRA by adjusting serviceability conditions on investor
mortgages; rendering it harder for the investors to access finance. Lending
ability has also been limited, lending rates have increased and mortgage
payments are levied at an even greater rate on outstanding debt.
/2
Sub-total /
10
Continued

Task 1: Identify and Interpret Compliance Requirements Continued
1.2
Interpret
, analyse
and
prioritis
e
identifie
d
complia
nce
require
ments
Some of the compliance requirements are difficult to meet. Unfortunately,
also there have been some ‘rogue’ mortgage brokers who have failed to
comply – to the disadvantage of their clients.
The finance planning industry has been plagued by non-compliance in the
largest planning groups, with the image of the industry being substantially
tarnished as a result. It may not suffer greatly because of the absence of an
alternative source of financial advice.
This is not so with mortgage brokers. They are just establishing their
reputation and consumers always have alternative of going to the lenders
directly.
(a) Select three tasks you perform on a regular basis that are subject to compliance
requirements.
No Mark
1. Search/Find out lender /1
2. Completion of loan application effectively /1
3. Send the loan request application to banking institution or other lender, and
waiting until it is accepted by them.
/1
(b) Identify the compliance requirements that are relevant to the three tasks selected,
indicating the name of the relevant legislation, regulation or code of conduct.
No
1. The National Consumer Credit Protection Act 2009 /1
2. ASIC /1
3. Australian Consumer Law /1
(c) How does your organisation monitor your compliance?
Mark
Enacting audits and control of enforcement areas and practices is both integral
business feature and requirement of ASIC regulations. Only other way of ensuring
systems work would be to inspect it and evaluate the findings, performing periodic
and ongoing analyzes and assessments of discrepancies.
/2

Sub-total /8
Total /27
Task 2: Deliver and Monitor a Service to Customers
2.
Identify
custome
r needs
The relationship with a client is generally described as beginning with the
establishment of empathy. In other words, it is first necessary for a
mortgage broker to establish that he / she is truly interested in the client and
the client’s needs. It is only after that that the mortgage broker has
established the right to interview a client.
(a) Use the internet or any other source to find a definition of empathy.
Mark
The capacity to communicate the emotions or perceptions of another by thinking
how it would be in the scenario of that individual.
/1
(b) List three open-ended questions that assist in developing empathy with a client? How
do such questions indicate empathy?
No. Mark
 What is going on?
 How is the business?
 What makes you believe it's perhaps time for something new?
/2
The open ended question offers information regards to need, want of an
individual and every mortgage broker should have this information. Herein,
underneath some open ended questions are mentioned which are as
follows:
/1
(c) List and explain the steps involved in an ‘active listening approach’.
Mark
In the aspect of active listening approach, different steps are included and some of
them are mentioned underneath:
 Ask questions- In this step, need and want of clients are find out so
/1

that accordingly next steps can be taken out.
 Go back- Restate what the customer stated about his or her desires
to be sure that the pertinent details were heard and understood, and
allow the presenter to continue. The views and emotions of the
customer could then be used as a reference to further queries.
/1
 Summarise- In the end make assure that both parties are agreed on
terms and conditions.
/1
(d) How is client service commonly monitored in your organisation? What are the two
possible outcomes?
No. Mark
1. Institutions will benefit from customer interactions by tracking consistency
through multiple channels, resulting in better decisions, operation, and
procedures. Tracking, assessing and controlling efficiency and level of
service must remain a target, but automation of "client's voice" throughout
multiple channels is just as critical.
/1
2. Through taking the view that value control is a systemic mechanism instead
of a tactical one, companies will begin to see user experience enhanced and
thus consumers are greatest champions.
/2
Sub-total /10
Continued
Task 2: Deliver and Monitor a Service to Customers Continued
2.1 Deliver
a service to
customers
In a survey on the reasons for referrals conducted by David Maister, only
10% were due to the quality of technical work. The remaining 90% of
referrals were due to the quality of service.
This indicates that the key to maintaining client relationships and gaining
referrals is the provision of outstanding service. This has been described by
Maister as ‘over-servicing’.
(a) Describe three ways in which a mortgage broking organisation can attempt to
‘overservice’ clients?
No. Mark
1. Investment in company and automation- The task tracking systems, metrics /1

and a dashboard that allows to control and track performance. Note that
companies can't control what can't even measure! In the end, you have to
have living, up-to - the-minute information to manage your time and stop
under-servicing in your tracks
2. If there is an opportunity to show your work – spend time to join
competitions from the sector; and also recognized activities from the
consumer sector.
/1
3. Demand more frequently, from customers. If there is a ' path creep ' it is
important to negotiate the cost of the project
/1
(b) How would you keep a client informed about the progress of an application as it passed through a
creditor provider’s hands? What approximate timing might be involved?
No. Mark
1. At such a stage the mortgage broker is again engaged for the very first time
after submitting the proposal to the lender. Because the mortgage broker is
committed to assuring that the service the lender is selling complies with the
customer's specifications. This stems from the assumption that mortgage
brokers have direct interaction with the borrower and as such are liable for
violations of the NCCP Act's prudent borrowing requirements. Brokers must
also be ready to take borrowers via the agreement to make sure they know
their responsibilities, especially with regard to interest payments and the
conditions applicable in the incident of delayed payment. Special
circumstances such as redrawing facilities must also be clarified and a
comprehension of all fees must be left to the borrower.
/2
2. The duration of period between evaluating the applicant and sending the
loan application to the credit processor, along with the customer's guidance,
should be not more than two days. It is essential that the data is forwarded
timely to the loan provider. The key word is subsequently, as soon as
possible after the preliminary evaluation has been done-on the same day if
possible.
/2
(c) Describe how you might attempt to resolve conflicts with clients.
Mark

Identify the tragic incident, and adjust the trend instantly by developing an un-
aggressive approach. Then improve the situation from an oppositional fight to a
win - win situation for both parties. This is generally termed a win - win scenario.
/2
(d) How do you can prepare clients for the hiccups that can happen while their credit application is being processed
Mark
Provide immediate notifications to the applicant where Possible- Do not ask the
borrower to provide useless information, in type of information that is not
necessarily relevant or that the lender still has in his custody.
/2
Sub-total /11
Continued
(e) The chapter on Operating a Mortgage Broking Business contains an example suggesting that a
mortgage broker acting in the best interests of clients should act as a Protector rather than an
Expert. What are the implications for this in regard to (i) advice given to clients and (ii)
recommending the most suitable loan products?.
No. Mark
1. Products are sometimes launched, and features of current products can
change. Hypothecary dealers have to be notified to any information
concerning product providers’ shifts, with information being circulated by
means such as staff meetings and workshops.
/2
2. Brokers must also be ready to discuss with their customers the different
items and find out their different characteristics so they can make an
informed decision
/2
(f) How could you prepare yourself to deal with client concerns?
Mark
Sometimes it comes in the form of broker fears or aversion to commodity terms like
interest rates. Some things just take the forms of a grievance which is more
structured. Either way, there is obstacle that must be resolved to the absolute best
degree. When the need of a win scenario has been understood and a much more
/2

normal speaking tone and speech style has been embraced, the challenge is
making the win - win result occur if that is possible.
(g) Give examples of the following legal breaches: breach of the duty of care, false and
misleading conduct, unconscionable conduct & conflict of interest without disclosure.
No. Mark
1. A broker who owes a consumer a responsibility if their incompetence leads
them to fall over a piece of a carpet. They often owe a client a duty of care if
the carelessly given guidance causes financial damage to them.
/1
2. There may also be more unusual activity, such as giving a false job and
trying to forge documents.
/1
3. The Company does not give the client adequate time to read a contract, ask
any questions or seek advice; and does not reveal or clarify the main
contract terms
/1
4. Conflicts of interest is where a mortgage broker suggests a specific
business product because it helps them to get a bigger fee, even if the
service is inappropriate for their clients.
/1
(h) Once a desirable market segment has been identified, a mortgage broking business can put its mind o
developing suitable marketing strategies. List examples of different strategies that might be used.
Mark
The brokers are more prone to get the level of concern which is an essential
characteristic of competence when operating with appropriate customers. They are
also more prone to developing consumer contact that contributes to "interaction"–
that is, a deep-term relationship that emerges from personal contacts.
/2
Sub-total /12
Continued
(i) What steps can be taken to keep up to date with product changes and ensure that this knowledge is
properly disseminated?
Mark
Register to electronic publications like Mortgage Choice, ING Direct,
Brokernews.com.au etc. All up-to-date product updates announcements may be
sent to all staff via e-mail and then discussed at conferences.
/2

(j) What are the procedures for dealing with client complaints in your organisation?
Mark
Listen to grievance. Accept possession of the issue. -Entertainment. Note, the
person complains about your company, not you specifically. -Register your claim. -
Sure you've got all the truth. -Discuss troubleshooting solutions. -Hold on with your
words. -Be quick. - Next
/2
(k) What normal protocols should for protecting the confidentiality of client files?
Mark
As all customer information is proprietary, all company documents will always be
kept in a safe environment. Only approved staff will have limited access to data /
records about clients. Client records are the property of the company, but after a
written request, clients may have controlled access to their own documents, either
by mail or online, and the authorization of assisted care facilities by the managing
director
/2
Sub-total /6
Total /39
Task 3: Contribute to OHS Hazard Identification & Risk Assessment
3.
Contribute
to workplace
hazard
identificatio
n
Occupational health and safety hazards are often considered only in terms
of physical injury, perhaps the result of working with heavy machinery,
working in an excessively noisy environment, or slipping or falling. Just as
relevant, however, is work-related stress. This describes the physical,
mental and emotional reactions of workers who perceive that their
work demands exceed their abilities and/or their resources (such as
time, help/support) to do the work.
For the questions that follow, please read ‘Overview of Work-related
Stress’ from the NSW Government. It may be found at:
http://www.safework.nsw.gov.au/__data/assets/pdf_file/0008/99233/
SW08367-1117-395314.pdf

Other ‘Tip Sheets’ from the same website may also be useful.
(a) How would you define workplace stress?
Mark
Workers/employees suggest that they can't say how they are doing their work
(lacking control).-Employees complain that their working activities in particular are
unethical, bullying .- Employees acknowledge that the corporation often involves
them in a behavioral shift. The corporation also suggests that the workers are
subjected to in-acceptable behaviors. /4
(b) Suggest at least two ways in which work-related stress may affect client relationships.
Mark
Growing or increasing conflicts/disputes, and customer satisfaction can decrease
the consistency of relationships.
/2
(c) Suggest at least four approaches you can take to reduce workplace stress? (Hint: you may find suggested
ways if you key ‘handling workplace stress’ into a search engine).
Mark
 Don't apply unnecessary pressure: there is no benefit if requests are made
or targets can not be met. Make sure that it is realistic, reasonable and time
apparently-bound when simply setting an intended target.
 Notice: Take a look at mental health of co-worker. has indeed their attitude
changed or complaint more commonly than normal?
 Be honest: Just stop and start thinking about what can contributing variables
in mental stress and from where it had started? Also is there any job which
require more assistance with or require to pass more timing outside?
 Be supportive: Keeping eyes on co-workers/colleagues and consider their
working pressure. Oftentimes just asking a colleague in circumstances they
want assistance can reduce their mental pressure and feel them batter.
/4
Sub-total /10
Continued
Task 3: Contribute to OHS Hazard Identification & Risk
Assessment Continued

3.1 Gather
information
about
workplace
hazards
In assisting in the control of work-related hazards, you will need to be
access suitable information.
Please read ‘Glossary of Job Demands and Job Resources’ from the
QUT/ANU People at Work project. It may be found here:
http://web.archive.org/web/20150227212940/http://
www.peopleatworkproject.com.au/LiteratureRetrieve.aspx?ID=174670
(a) Explain the distinction between ‘job demands’ and ‘job resources’ risk factors.
Mark
Job demands: These may be categorized as "job/work pressures" which have
negative consequences for employee psychology. Specific job qualifications and
behavioral considerations may include such job requests.
Job Resources: These can be categorized as "protective factors" with positive
consequences for workers ' psychological well-being. The accessibility of work
opportunities can also help reduce the pressure faced by workers by helping them
cope comfortably with job requests. High standards in employment and low
employment levels has been an emphasis of considerable researches in the field
of occupational stress-literature, as they have an impact on psychological well-
being in work environment.
JOB DEMANDS: These following psycho-social risk variables are particularly
destructive to psychological well-beings, as follows:
 Role Overload: vital role Overload arises when a person feels pressured to
fulfill his organizational standards in a given time, due to unreasonable
workload, challenging periods and absolute inability.
 Role Ambiguity: Unclear or ever changing requirements concerning
expectations and tasks which define a person's job are also ambiguous.
 Role Conflict: Task Conflict represents the extent to which 2 or more
mutually contradictory roles are supposed to be carried out concurrently by
personnel and has already been defined by various groups or individuals
whom a worker has to communicate as in-consisting demands and
aspirations.
 Cognitive Demand: Cognitive demand isn't always a solid determinant of
worker strain in seclusion, but sometimes works to increase employee
burden in mixture with other working demands.
 Group Task Conflict: Such conflicts may include disparities in opinions on
initiatives, methods, allotment and resource dissemination conflicts, or
distinctions in decisions and fact-to-fact interpretation.
 Group Relationship Conflict: These relates to inter-personal conflicts and
tension with one's coworkers resulting from discrepancies in individual style,
beliefs, and standards.
JOB RESOURCES
It has been shown that low levels of such psychosocial risk variables are harmful
for Psychological Well-being:
Job Control: This represents the potential of employee to coordinate their
work operations, including work role selection, work strategies, work timing,
work management, resource monitoring, and physical atmosphere regulate.
/4

Supervisor Support: This requires help both ' instrumental ' as well as '
emotional ' support.
Co-Worker Support: These can be of both types instrumental as well as
emotional.
Praise and Recognition: Supervisor support and gratitude may be in the
context of motivation, appreciations, and other expressions of gratitude.
Procedural Justice: Another type of corporate fairness is procedural justice,
relating to the expectations of workers about the legitimacy of the structured
rules, procedures and mechanisms used to make decisions and attain ultimate
goals as well as other results.
Change Consultation: This applies to how input on organizational
adjustments is being given to the workers and how they are able to engage in
decisions that could impact their job.
(b) Identify two ‘job demands’ risk factors that are relevant to your workplace and describe
what detrimental effect they might have.
No. Mark
1. Role Ambiguity: Role Ambiguity relates to lack of clarity, insecurity or
supposed lack of crucial job-related information regarding job responsibility.
The ambiguous aspect often lies in the undefined or continually changing
specifics of an individual's perceptions and obligations.
/ 2
2. Group Task Conflict: It applies to discrepancies in work to be done with
one's fellow Members. Such disagreement can include differences of opinion
on strategies and practices, conflicts over the assignment and allocation of
resources, or discrepancies over decisions and fact-finding.
/ 2
Sub-total /8
Continued
Task 3: Contribute to OHS Hazard Identification & Risk
Assessment Continued

3.2
Contribute to
OHS risk
assessment
Once risks have been identified, they should be controlled. A way of doing
this is to use “job resources” available in the organization.
Once again, please refer to the ‘Glossary of Job Demands and Job
Resources’ that was referred to earlier.
Apart from OHS issues, there are other significant risks that have to be dealt
with at all levels in an organisation.
(a) List the job demand factors you have identified previously and for each one select one
or more job resources that might be used to mitigate these risks.
No. Mark
1. Role Overload:
Role Conflict:
Group Task Conflict:
Role Ambiguity:
Cognitive Demand:
/ 1
2. Cognitive Demand: Praise and Recognition
Role Ambiguity: Supervisor Support
/ 1
(b) Select one of the job resources listed and suggest how you could apply it in your work situation.
Mark
.Job Control:
It defines extent that an employee/worker is entitled to conduct his work in a way
he or she prefers. This represents the potential of a worker to coordinate its work
operations, including selection of employees, working practices, pace-setting, work
planning, resource management and physical environmental control.
/ 1
(c) Select a significant risk issue, other than OHS issues, that has an impact on the way you perform your
duties and explain how it is managed.
Mark
Occupational Stress
Work stress is recognized as a key problem to an organization's health and well-
being as a whole. The stress cycle defines workers ' physiological, emotional,
behavioral and interpersonal responses that understand that their expectations for
work surpass their skills and/or resources. Increased and long-term job stress can
cause a number of repercussions. Of instance, job stress is related to bad physical
fitness (e.g. cardiovascular) and emotional deterioration, as demonstrated by
heightened anxiety, fatigue and exhaustion. Employee stress (e.g. job satisfaction
or organizational engagement) and employee behavior (e.g. absenteeism, turnover
or reduced employment performance) were also affected by occupation stress.
/3

Therefore, it is important to avoid or mitigate psychological health hazards apart
from regulation, since work environments that include such threats will carry
considerable financial and environmental costs.
Occupational Stress Framework
The Individuals at Working Project has evolved a work environment psycho-social
danger structure that is focused on a percentage of well-known work pressure
models. The psychological and social risk variables can be divided into 2 groups,
namely Work Requirements and Job Services.
Sub-total /5
Continued

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

3.3
Environment
al risks
The risks that should be considered in management decision-making
include environmental risks.
This is giving rise to a new way for businesses to report to stakeholders that
goes beyond traditional financial reporting. It is called “triple bottom line”
reporting.
(a) List the three criteria of triple bottom line reporting. What is the likely effect of this form
of reporting on management decision-making at all levels.
No. Mark
1. Social (people): Following listed are potential variables:
Average commute-time
Female lobar force-participation rate
Health-adjusted life expectancy
Median household-income
Percentage(%) of population with a post-secondary degree or certificate
Relative poverty
Unemployment rate(%)
Violent crimes per-capital
Environmental (planet): Specific illustration involves:
Change in land usage/land covering
Concentration of nitrogen-oxides
Electricity consumption
Excessive nutrients
Fossil-fuel consumption
Dangerous waste management
Chosen priority pollutants
Solidified waste management
Sulphur-dioxide concentration
Financial (profit): Specific illustration considers:
Cost of under-employment
/ 2

Employment distribution by sector-wise
Revenues by sectors-contributing to gross state product
Establishment churn
Establishment sizes
Job growth(%)
Percentage(%) of firms in each sector
Personal income
2. Social (people): Social variables may include measures of employment,
equality and exposure to social services, safety and welfare, living standards
and social capital, which apply to social parameters of a culture and country.
Environmental (planet): Environmental factors should describe natural
resource measures and represent possible effects on their feasibility. air
quality and water, energy usage, renewable resources, toxins and hazardous
waste including land use / land covering can be included. In order to hopefully
allow companies to recognize effects of project or policy in this field with the
patterns in the long-term for environmental variables.
Financial (profit): Economic factors should have been the bottom-line as
well as money flow factors. They may discuss revenue or expenditures,
taxation, factors relating to the business environment, employment and
diverse companies.
/ 2
(b) Select the annual report of a leading financial organization such as a major bank and, after identifying the
organization, summarise what it says about its environmental impact (suggested maximum length of 50
words).
Mark
Annual Report of NAB : Environmental Impact
As a creditor, in conditions where the creditors have investments and these
resources have affiliated environmental impacts, a group can entail environmental
obligations for the borrower. To order to ensure that this risk is adequately
minimised and controlled, the Corporation has formulated and enforced lending
policies. This can perform a significant role in supporting green development and
contributing to the sustainable development of the societies in which it works as
the worldwide financial products and services supplier.
/ 2
(c) Briefly indicate the environmental protection assistance that your business organization is able to receive
from your State or Territory environment protection agency.
Mark
Creditors, for instance, take into account the environmental effect of their
mortgages, and that they will not promote their borrowing operations with a list of
/ 2

things. They also take into account their vendors ' environmental effect and aim to
run green branches. In environmental management problems, organizations are
not alone. Environmental protection authorities in all Countries and territories have
a significant origin of data and support in particular, as follows:
The Western Australian Environment Protection Authority
The Tasmanian Environment Protection Authority
The Queensland Department of Environment and Heritage Protection
The Northern Territory Environment Protection Authority
The Victorian Environment Protection Authority
The NSW Environment Protection Authority
Sub-total /8
Continued

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

3.4 Effective
team
management
Risk assessment also requires effective team management and participation
and the right sorts of questions being asked.
(a) Describe the benefits of team meetings.
Mark
Supporting relationships are good to develop — Allow participants to raise their
minds from day-to-day activities-creating room for each other to gain input and to
increase potentials.
/ 2
(b) Consider your own role in team meetings and describe the approach you and other members should take to
information sharing.
Mark
Team Meeting plays a crucial role in management – one can use team meetings to
organize troops, explain the mission, and everyone plays their position. Leadership
is complex if an individual leader does not communicate. Members can make use
of their sessions to support each other with feedbacks. Group meetings should not
be utilized to provide constructive feedback, however should rather take place at
individual meetings.
/ 2
(c) Give examples of the types of risks that should be considered in all team meetings.
Mark
Disagreements: The possibility for disputes and disagreements (particularly if two
colleagues have also shown susceptibility to this issue) is one of the major drawbacks to
having team meeting. In many instances, workers interpret the thoughts of others in a
critical manner and convert discussions into arguments.
Time Away From Specified Tasks: The spending time at team meetings is usually
medium time spent away from the normal daily tasks. This may cause workers in their
regular routine to drop-back or fall behind.
/ 2
(d) Explain why leadership is important in risk management.
No. Mark
1. Basically, three easy things are going really well. They're asking right questions first. /1
2. Secondly, best leaders work with a combination of individuals with diverse experiences, skills and
viewpoints to predict, analyze and handle risks.
/1

3. Third, citizens of good behavior is most powerful leaders during global financial crash. They were
whole, brave and compassionate. You have been cautious, patient and mindful of your limitations.
/1
4. Great leaders accept diverse opinions and viewpoints. This makes them mindful of possible risks as
well as are able to take decisions that are more educated and ultimately stronger.
/1
Sub-total /10
Total /41

Task 4: Manage Personal Work Priorities and Professional
Development
4. Set
and meet
own work
priorities
One of the challenges we face in a workplace situation is time
management. Management theory on the subject began with the Pareto
Principle, suggested that only about 20% of the things we do produce 80%
of the results we achieve. The challenge than becomes to set time aside for
the 20% that matters.
The theory was taken further with Stephen Covey’s Time management
matrix.
(a) Describe Covey’s Quadrant 2.
Mark
Not urgent, important, these are the things that are important in the long run and
this week or even this week will yield no significant benefits. There are stuff we
know we have to get to but they're definitely going to push further. Has a lunch with
a big partner or customer? This is about building relationships
/2
(b) List three of your work activities that should belong in Covey’s Quadrant 2.
Mark
The goals and aspirations of each are special. Most times we equate items as
critical as having a sense of pressure, but this is not the situation. Your aspirations
and dreams don't run away; they're going to be right where they are now and
there's no need to reach everything within a defined timeframe. Anything that will
long-term help you can be called in dimension two
/3
(c) Suggest ways that you might utilize to ensure that proper time is spent on Quadrant 2 activities so that
stress is avoided.
Mark
Having lunch with client- This is a crucial way to minimise the level of stress in
which brokers can have lunch with customer that may lead to trust between both
parties.
/2
(d) Digital diaries are now available as both computer and mobile phone apps. Describe the place of digital
diaries in managing personal work priorities.
Mark
Online journals offer many benefits over article including: integration of the
contacts list and phone, making it easy to call other people and recognize callers. It
should (and should definitely) take full advantage of the now accessible cheap and
simple web-based backup so missing journal doesn't mean giving up all of
knowledge.
/2
(e) Describe the importance of setting goals in terms of personal well-being.

Mark
Never compromise targets in any way. Rhonda Addams, a specialist on small
company planning, has 2 rules which summarize the nature of the target setting:
One cannot reach a target that have not set. If individuals want anything then need
to "do" it, too. Setting expectations also improves our sense of happiness.
/2
Sub-total /11
Continued
(f) What does Stephen Corvey recommend for “re-creation” (a Quadrant 2 activitiy),
Mark
These are the things that are important in the longer term and this week or even
this year will produce no advantages. There is stuff that are known and need to get
to but they're definitely going to push further. This is the concentric circle where
individual really just want to spend. Tasks in quadrant two are associated explicitly
with objectives and the things that want to do over the long term.
/2
(g) What are the common characteristics of work goals?
Mark
The work goal has different types of characteristics such as specific, measurable,
simple, easy to achieve, time frame etc.
/2
Sub-total /4
Continued

Task 4: Manage Personal Work Priorities and Professional
Development Continued
4.1. Develop
and
maintain
professional
competence
One of the outcomes of spending more time on Covey’s Quadrant 2 is that
we have more time for professional development. Desirable professional
development includes a range of activities begin with reading the morning
press to undertaking a degree course at university. Increasingly these
days, it may also involve doing a course through the internet.
Setting professional development goals is part of the goal setting we
should undertake in are working life. If we have personal goals we are
more likely to make things happen. Also, research suggests that goal
setting relieves stress and increases physical wellbeing.
Goal setting of this type is a Covey Quadrant 2 activity. As such it is
something we have to deliberately set time aside for. This may be easier
over time because that way it becomes more of a habit.
Ideas for professional development do not come out of a vacuum. You
should be prepared to seek advice from colleagues and other mortgage
brokers.
(a) List three activities you might consider undertaking to increase your competency (in
addition to formal professional development training) to comply with ethical, legal and
procedural requirements.
No. Mark
1. Join a professional body and get newsletters that are given often regular.
This is a great way, inter alia, to keep abreast of policy or regulatory
changes.
/1
2. Another way of learning about the business and become aware of
investment opportunities is to read related articles, business journals,
journals and newspaper.
/1
3. Write economic news or listen to them. For starters, mortgage brokers will
know what is going on at interest rates and what their major competitors –
/1

the banks – are doing. If brokers are in appropriate compliance with their
business, they are told in the local newspaper or Network news.
(b) Describe how you can obtain ideas for professional development from (i) feedback and
(ii) competency standards.
No. Mark
1. Identify the strengths, knowledge and conduct that need to play at the level
which like. Individual should decide if they need to encourage or choose
specific skills, abilities and behaviours, to take on a higher tier role.
/1
2. Assess your current competencies, abilities and actions /1
(c) Where do you see yourself in three years time? List three skills or competencies you
will need to arrive there. Against each skill or competency nominated, suggest how you
will attain it.
Mark
1. First, in finance and loan broking I need to receive my Certificate IV.
Secondly.
/1
2. I must support my boss to acquire more experience and work in the loan
broking department.
/1
(d) Suggest ways in which mortgage brokers may network to assist other mortgage brokers.
Mark
Organize a broker's group of 4 to 8 such as-minded brokers in your field that
operates every month to discuss their market problems and perspectives. I would
like to contribute so much to my homepage (blog), but I also know that journals in
the broker sector will be grateful to receive content as well.
/2
Sub-total / 9
Total /24

Task 5: Develop and Nurture Relationships with Clients, Other
Professionals and Third Party Referrers
5 Develop
professional
business
relationships
David Maistre has defined professionalism as an ‘‘… an unqualified
dedication to excellence in serving clients and their needs.’ This has
important implications for how client relationships are established and
maintained.
Mortgage brokers are also able to develop and benefit from relationships
with other brokers because their main competition is not with each other.
Rather, it is the banks and other financial institutions.
Networking within the industry is therefore important.
Meeting other mortgage brokers requires much the same techniques as
meeting clients, other professionals and third party referrers. The
relationship depends on the development of rapport and the ability to

contribute to the relationship in key knowledge areas.
(a) What needs to be demonstrated at the outset in a client relationship? When is
appropriate to demonstrate competence?
No. Mark
1. Assess your needs- The broker examines the financial status and defines
the potential for lending and the form of mortgage product which is suitable
for long-term objectives. A broker can assess the potential for operability
through different analyses through situations.
Recommend mortgage products- A broker will suggest suitable home loan
items that accentuate your goals after evaluating your financial and social
situation.
Negotiate on your behalf- Individuals can find the best offer on a competitive
price and appealing functionality by using the broker's collection of loans
and business networking’s.
/1
2. Taking time to learn the client, its expectations and its climate is an
important first step towards establishing a good client relationship. In the
initial phases, multiple meetings will take place with the customer and other
relevant people in the organization and also perform research.
/1
(b) Imagine that you are explaining the function of mortgage broking to a client. What
words would you use?
Mark
The key functions of a mortgage broker can be categorised as:
 Find out a lender.
 Completion of application of loan.
 Submission of loan application to bank and wait for approval.
If commission will be paid to member, then the member should disclose to
customer that fact and:
 Name of person (commission is payable)
 Name of person (commission is receivable)
 Amount of commission
 Amount payable in regards with insurance contract.
/2

(c) Explain the importance of a code of ethics in the relationship between a professional
and clients.
Mark
 Ensure compliance with the law appropriate;
 maintain and appropriate training requirements;
 maintain adequate competent compensation insurance;
 organize adequate consumer funding;
 act immediately and effectively on financial app management;
/2
Sub-total /6
Continued
(d) Drawing on your own experience or the experience of a more experienced colleague or
manager, describe a situation where a need was identified to use language and
concepts appropriate to cultural differences. How was the need met?
No.
1. The' rules' for non-verbal communication are usually understood within a
specific culture but differ within society, culture and age. The laws about
touching and using private space are particularly important. Make an effort
to understand the cultural differences with which you work.
/1
2. Avoid inadequate or free links to the society of an individual, etc. ' A woman
named Sandhya Uprety, for instance, is the new person who starts work
next week. She is an Indian-English.
/1
Sub-total /2
Continued

Task 5: Develop and Nurture Relationships with Clients, Other
Professionals and Third Party Referrers Continued
5.1 Build and
maintain
business
networks and
relationships
For a relationship with a client to continue, they need an assurance of
continuing mutual benefit. The continuing mutual benefit is also important
in relationships with other professionals, including relationships with
‘outsiders’ such as accountants, real estate agents and other
professionals.
(a) List two others type of professional your organization uses to develop client
relationships and indicate in each case how it is able to provide them with a benefit in
the relationship.
No.
1. It can also be difficult to recognize that we are not a cause of all
understanding and guidance. Though, that professionals like:
 Accountants
 Lawyer
/1
2. They let customers know if they have to look at a subject and, when
necessary, give customers a higher competence. It is something
mortgage lenders will learn to do when they are to be competent. It is a
matter about acting in the interests of consumers, and this is the duty of
treatment.
/1
(b) Surveys indicated that two-way dialogue, or ‘conversation’ is of overriding importance in
developing client relationships, relationships with colleagues and also other professional
relationships. List four characteristics of this process.
No. Mark
1. Through, directly engaging with clients can create a better connection. /1
2. Allows to enhance level of customer satisfaction. /1
3. Offers a framework for customers to know about business /1
4. Let’s consumers know that they are being perceived /1
(c) Other professionals that a mortgage broker might forms contacts with are referred
to in marketing literature as ‘Centres of Influence’ (COI). Why does David Maistre place
them in his ‘second tier’ in order of effectiveness. What activities in David Maistre’s first tier
does your organization engage in.
No. Mark
1. One thing that must be noted is that customers who are really satisfied
would always want to give references as this is a way to profit social
relationships and families. Requesting references then is doing more
than promptly. This gives them the right to continue.
/1

2. By their interacting with perfect clients, brokers tend to have the concern
which is a critical technical performance. You are also more prone to
developing relationships with customers leading to "interaction"–that is, a
long-term, close relationship. The "tale" of the ideal consumer then forms
the foundation for a marketing strategy that attracts and catches even
more customers.
/1
Sub-total /8
Continued
(d) List four occupations and professionals that may become Centres of Influence.for your organisation.
Mark
Solicitors
Conveyancers
Agency of credit report
Land office
/1
Sub-total / 1
Total /17

Task 6: Promoting the Effective Use of Credit
Read the following scenario then answer the questions that follow.
Roslyn qualified as a schoolteacher some years ago, but failed to take up a teaching
position after graduating because she became a single mother. Fortunately, she has been
able to live with her widowed mother, but now that her daughter has reached school she is
taking up a position as a schoolteacher some suburbs away.
Because of the distance of her new school from her parent’s home she will need to buy a
car. After careful consideration, she has chosen a small hatchback that has an on-road
cost of $15,800.
She will be working full time with a starting salary of $50,000.
She knows little about finance and has come to you for advice. She would prefer to finance
the full cost of the car because she has little in savings.
Task 6.1.
(i) Suggest two financing options that Roslyn might consider.
(ii) Explain the main features of each.
(iii) Choose one of these options and explain your choice. Are there any disadvantages that need
to be considered?
No. Mark
1. Personal loan and hire purchasing /1
2. The purchasing of cars is typically done by secured personal loans, with
both the auto-mobile can be used to obtain the loan. By general, the rate of
interest on personal loans is lower.
Commercial rental transactions are a form of trade financing for rapidly
depreciating products, such as motor cars. The lender will be able to
acquire the item funded in the last term of the CHP for a duration of five
years only in the medium to long term.
/2
3. I recommend in this situation that Roslyn apply for a bank loan covered.
Firstly, the tax deduction after permission can be supplied by a protected
bank loan. Additionally, insured loans generally have lower rates. If Natalie
doesn't pay on the protected property, a loan creditor will recapture the
property by taking out a personal loan to sell the property for cash
recovery. If the commodity is purchased for less, the lender disparity will be
paid.
/2

Sub-total /5
Continued

Task 6: Promoting the Effective Use of Credit Continued
Task 6.2.
Write a letter to Roslyn letting her know about your preferred, explain how she will make payments
and giving your reasons for choosing it as the option more clearly meeting her needs. You
should take care to proofread your letter.
Mark
Dear Roslyn,
I said the Westpac Car loan is the best service for her. Even though distinct
loans are accessible, this is best for her. The following are the charges:
 $ 250 (Establishment fee)
 $10 (Month basis)
 9.9% rate of interest with 11.34% comparison rate
According to the NCC lenders, a comparable rate covers interest and other
costs. This rate is being used to test different banks ' goods. Fees and taxes
shall not include municipal fines and expenditures.
You can choose between thousands of items. The dynamic pricing system in
these products is hard to understand, so NCC needs all payment suppliers to
have an official rate of reference to help companies evaluate the different
products.
The National Credit Code requires credit companies to include a comparative
rate when they disclose the rates on their loan products that help potential
mortgage lenders understand how much they are charging for their loan. The
rate of reference shall be established using a simple formula that considers loan
amounts, interest rates, loan duration, payment rate and loan service charges.
For instance, the rate of interest of a lender for home loans could be 5.5%.
The rate of contrast can shift a two-price viewpoint. For examples, mortgage
rates for Mortgage A and Mortgage B are 6%. Mortgage A's fees and taxes are
0.5% relative to Loan B's 0.1%, that means that the contrast of mortgage A's
6.5% is above the comparable rate of mortgage B's 6.1%. The cheapest of both
is Mortgage B.
/4
Task 6.3.
Roslyn is concerned that the lender will apply for a credit report. Explain:
(i) The procedure and cost involved in obtaining a copy of her credit file.
(ii) The right of a lender to access credit report information.
No. Mark
1. Actually in the Australian market there are three major debt collection
companies. These are Veda Advantage, Dun and Bradstreet and the
collection service for Tasmania.
/2
2. The credit reporting agencies ' details, for example Veda Vorteil, has major /2

consequences for borrowers. A poor historical record of loans can lead to
the rejection of loans. The future implications of paying interest on payment
commitments must be brought to light to all customers, particularly those
who have limited financial knowledge.
The Government of the united states has now agreed to incorporating
responsible lending responsibilities into the new Consumer Credit Services
regulatory system. It must require lenders to:
 borrow to an obligor with the ability to pay the mortgage, and do this
without substantial difficulties.
Task 6.4.
Further information
Roslyn mentions that her mother’s washing machine has broken, and she urgently needs
a replacement washing machine. The cost is less than a thousand dollars and she plans
to use her credit card for the purchase. She tells you that she will make the minimum
required repayment per month until she pays the machine off.
Draft a letter to Roslyn providing advice about her plan.
Mark
/2
Sub-total /10
Total /15

Task 7: Prepare a loan application on behalf of mortgage broking clients
Case Study — Evaluating and processing a loan application
Read the following case study then answer the questions that follow.
Ross and Melissa Cooper are a young couple who have been married for five years,
during which they have been renting an apartment while saving to buy an apartment of
their own. They do not have any children at this stage.
After some months searching, they have found a small two-bedroom apartment that suits
their needs. The purchase cost of the property is $480,000, and they have provided a
deposit of $60,000. You are recommending a standard variable loan.
Ross has been working at Gaines Consulting Pty Ltd. for 12 years and has a salary of
$80,000. Melissa has been working at Jackson Equipment Hire Pty Ltd for 8 years and has
a salary of $70,000. Neither has had previous employment, apart from casual work when
they were younger.
The full details of Ross and Melissa that you have collected are as follows:
Applicant 1 Applicant 2
Loan purpose Purchase home (owner
occupied)
Amount and type of loan sought $480,000 standard
variable rate
Deposit $60,000
Address Unit 2, 27 High St.,
Mackville, NSW. 2080
Unit 2, 27
High St.,
Mackville,
NSW. 2080
Status Renting Renting
Years there 5 years 5 years
Contact details Phone (W)
Phone (H)
02 9200 1111 (w)
02 9400 9900 (h)
02 9310 2000(w)
02 9400 9900 (h)
Mobile [phone] 960 000
Email [e-mail] [e-mail]
Number of dependants Nil Nil
Employment Gaines Consulting Pty. Ltd Jackson
Equipment
Hire Pty Ltd
How long? 12 years 8 years
Gross income ( p.a.) $80,000 p.a. $70,000 p.a.
Credit history Personal loan to purchase a car — since
repaid.
Personal credit card with Central Bank with a
limit of $3,000. Current balance: $300
Personal
credit card
with
Northern
with a limit of

Note: All credit cards are repaid in full when
due.
$2,000.
Current
balance:
$300
Store card
with Wilson’s
Department
Store.
Current
balance:
S250
Note: All
credit cards
are repaid in
full when
due.
ASSETS AND LIABILITIES
AssetsEnvironmental factors should describe natural
resource measures and represent possible effects on
their feasibility. air quality and water, energy usage,
renewable resources, toxins and hazardous waste
including land use / land covering can be included. In
order to hopefully allow companies to recognize
effects of project or policy in this field with the
patterns in the long-term for environmental variables.
L
i
a
b
i
l
i
t
i
e
s
Details Market value Details Monthly
payments
Amount owing
Cash at bank $15,000 Credit card limit:
$2,000
$2,000 $300
Deposit paid on
property
$60,000 Credit card limit:
$3,000
$3,000 $300
Motor vehicles:
1.
2.
$15,000
$7,000
Other:
Personal effects $30,000
Business value Nil
Total assets $127,000 Total liabilities $600
Surplus/deficiency: $126,400
OTHER DETAILS:
They are seeking a loan term of 25 years. Other requirements are:
 proposed settlement date — 6 weeks time
 ability to make additional payments from time to time without penalty
 monthly repayments
 redraw facility.
The applicants will have no other financial commitments other than their monthly mortgage
commitments, rates and utility costs and strata fees.

The current variable home loan rate is 6% pa.
Note: For the purposes of this assignment, any first home purchase assistance should be
ignored.
OTHER INFORMATION
APRA is concerned that interest rates may rise and because of this it is requiring all
lenders to “stress test” all housing loans at a borrowing rate of 7% p.a.
Task 7.1.
Apart from requiring the presentation of a Credit Guide, the NCCP Act says nothing about
what a mortgage broker should say about him/herself at the beginning of a client interview.
In the space below, make a few brief points about what you would say about yourself and
your firm at this stage. Remember that at the outside the client is primarily looking for
assurance that the broker is concerned about them and their interests.
Mark
Declaration: We are assuring you that all the information provided in loan
application are true and fair. Our financial status adequate to repay the loan
along with interest liabilities. However, in case of default and non repayments we
will co operate with banks actions to assist in recovering loan amount.
/2
Task 7.2.
List in point form the important information a Credit Guide conveys to the credit applicant.
Mark
 Name of licensee and contact information:
 ACL number of Licensee
 Amount of fees payable from customer
 Information about trending six lender which the licensee has examined
customers to
 Information about trending six lender which the credit rep has examined
customers to
 Amount of commission which an individual ant to gain
 If the Licensee has a volume incentive agreement with the borrower, a
declaration that the fee paid by the borrower will rely on a specified volume
and the fee may be guided by volume
 Amount of commission which 3rd party want to gain for introducing the
customer to licensee
/3

 Details of licensee’s IDRS and EDRS
 Information regards to primary assessment
 For loan administrators, a description of the loan management's
partnership with the borrower, along with any fees that the MM directly
pays to the borrower for the product.
Task 7.3.
Under the Anti-money Laundering and Counter-terrorism Financing Act 2006 (AML/CTF
Act), mortgage brokers are required to establish the identity of their clients. To do this they
must cite original copies of at least three primary documents and one secondary
document. List three primary documents and one secondary document below.
Mark
Primary Document:
 Passport
 Bank Card
 Driver License
Secondary Document:
 Birth Certificate
/3
Sub-total /8
Continued
Task 7.4.
Mortgage brokers should present adequate information to clients to enable them to make a
choice between loans. This involves conducting research to determine suitable loans and
presenting clients with a choice among, say, three loans that are considered to be suitable
for the client’s requirements. The characteristics of the three selected loans are then
presented to clients in a way that allows a comparison to be made. The presentation may
be made a piece of paper, or other means such as a Powerpoint overhead.
You are now required to use the internet or other sources to choose three loans that you believe will meet the
requirements of Ross and Melissa. The relevant details should be placed in the spaces provided.
Mark
Credit Provider

/6Product Name Home Loan
Interest Rate Type (%) 6.00%
Comparison Rate (%) 7.00%
Minimum Loan Amount ($) $480000
Maximum Loan Amount ($) $420000
Minimum Loan Term 30 years
Maximum Loan Term 25 years
Maximum LVR (%) 100.00%
Maximum Insured LVR (%) 100.00%
Mortgage Offset Account (Yes/No) No
Loan Redraw Facility (Y/N) Yes
Split Loan Facility (Y/N) Yes
Fixed Interest Option (Y/N) Yes
Task 7.5 (a)
Explain significant features of the loan products that you have chosen in words that
the client would understand. Your answer should be restricted to features relevant
to the clients.
Mark
House loans are distributed on basis of market value, usually by banking or
the house registry value. Any need of own home can be fulfilled through the
purchase of different house loans at cheapest price for your requirements and
convenient financing.
Unique Features of house loan:
 Purpose: For buying the home from the builder reselling it and
constructing the existing house.
 Loan amount: Based on your competence, income and repayment
ability, you may take housing loans between $ 150000 to $ 1500000.
 Security: Housing loan is a loan that is secured and guaranteed.
 Loan tenor: maximum loan tenure is 25 years.
Depending on your repayment ability, institutions agree on eligibility and
assess loan amounts in advance. Through settling your outstanding loans,
through extending out your loan term, wages can improve their entitlement by
suggesting their performance-related earnings or incentive. The eligibility to
purchase a home loan is increased by clubbing incomes of their parent.
/2
Sub-total /8

Continued
Task 7.5 (b)
Credit providers always have other fees and charges beyond their stated interest
rates. Select one of the loans you have set out in Task 7.4 as the one preferred by
Ross and Melinda, and explain any additional fees and charges in a manner that
your clients can understand.
Mark
The interest rates, which can differ from different banks, and comparing them, is
important factor in EMI calculations. A comprehensive and detailed review is also
carried out of different options such as fixed and variable interest rates. if multiple
banks offer you same mortgage, but you can do the calculations and decide what's
the better at a different percent. Here are some additional fees and charges
attached with home loan, as follows:
Loan Processing Fees: This is a fees which is payable at the time of taking loan
and like a documentation charge which may vary with loan amount.
Home loan exit fees: Customer may be responsible towards exit fees on loan if
customer has availed home loan before 01/07/2011. Home loan afterwards this
date will be liable for such fee.
Home loan early exit-fees: This fees is also termed as early termination-fee, early-
discharge” fees, deferred-application fee or deferred-establishment fee. This fee is
may be levied if customer pay-out their housing loan fully within predetermined
period like within first five-years).
Home loan discharge fees: This also named as termination fees or settlement fees
which is charged when customer pay-out mortgage fully.
/2
Task 7.6
It is important to verify the information that you obtain from clients, particularly
information that relates to income. List the documents that you should ask for and
then examine to verify the incomes of Ross and Melissa.
 Mark
 Income Tax return of most recent three years
 Bank statements to verify the incomes
 Credit Report
 Past loan history
/3
Task 7.7

In dealing with clients, it is important to explain technical concepts in ‘plain English’ so that
they understand them. In the first two spaces below, explain the terms ‘LVR’ and ‘insured’
LVR’ in terms that that your clients will understand. Then, in the third space, explain how
Lender’s Mortgage Insurance is normally paid, once again expressing yourself in a way
that the clients are likely to understand.
No. Mark
1. LVR: Full from of LVR is Loan to Value Ratio which is also regarded as ‘LTV’.
It is sum a customer borrow, described as specific percentage(%) of
aggregate value of entire property being utilized as mortgage security for
loan. Lenders or banks put significant focus on LVR while considering loan
application. A lower LVR indicates risk for bank.
/1
2. Insured LVR: In Insured LVR, insured value of property is considered
instead of total value of property. Some bank due to their internal policies
also prefer this while assessing loan eligibility.
/1
3. Mortgage insurance amount is payable when LVR percentage is more-than
80 percent, or more-than 60 percent for low-documentation loans. However,
non-bank financial institutions collects mortgage insurance with respect to
every loan without considering LVR.
/1
Task 7.8
Mortgage brokers assist their clients to complete their preferred lender’s credit application
form, as well as applications for the First Home Buyer’s Grant and (where applicable)
stamp duty exemption. Examples of these forms are set out over the following pages and
you are required to complete them on behalf of Ross and Melissa. In this case, please fill
in our sample of ANZ application form. Treat these buyers as first home buyers and treat
this property as a new property, for the purpose to get use to filling FHOG and
Exemption forms. Remember that each form must be signed by the client, so facsimile
signatures must be attached
Mark
The forms for the following pages can be found at:
https://www.homeloanexperts.com.au/wp-content/uploads/2016/05/ANZ-Loan-
application-cover-sheet.pdf
http://www.osr.nsw.gov.au/sites/default/files/file_manager/ofh001.pdf (application
form only) http://www.osr.nsw.gov.au/sites/default/files/file_manager/oda066.pdf
((application form only)
/15
Sub-total /23
Continued
Task 7: Prepare a Loan Application on Behalf of Mortgage Broking
Clients Continued
Task 7.9.

It is important to keep clients informed about the steps involved in the credit approval
process. Indicate how your organization keeps your client informed as the loan application
proceeds. What are the likely normal time intervals for each step that you explain to your
clients.
No. Mark
1. Loan Application 1 day
Conditional approval or pre-approval 1 day
Property valuation 1 week
Unconditional approval or formal
approval
2-3 days
Loan offer issued 4-5 days
Settlement 1-2 days
/2
Task 7.10
Assess the loan application of Ross and Melissa Cooper against the five C’s.
a) Character
How would you assess the applicants’ character?
Mark
For assessment of applicants' character lender should check loan credit history
report. This report also provide statistics on bankruptcies and liabilities and hold
the majority of the data for 7 to ten years. In the sense of further evaluation of risk
of a lender before issuing new debt authorization, the borrower can also evaluate
lien and judgments data, like LexisNexis RiskViews).
/2
b) Capacity
(i) What will the applicants’ monthly payment be, given the current variable lending
rate of 6% p.a.? (Hint: visit a website such as:
http://www.yourmortgage.com.au/calculators/).
(ii) Using the ‘income percentage method’, assess the applicants’ capacity to repay the
loan (25 words)
No. Mark
1. Loan amount: $4,800,000
Annual interest rate: 6%
Loan term: 30 years
Monthly repayment: $28,778.43
Total loan repayments: $10,360,233.07
Total interest paid: $5,560,233.07
/1
2. Current Credit card expenses: $ 2000 + $ 3000 = $ 5000
Income of both: $ 150000 per year
/1

As per income percentage method borrowing capacity of Ross and Melissa
Cooper is: $990,400
Sub-total / 6
Continued
Task 7: Prepare a Loan Application on Behalf of Mortgage Broking
Clients Continued
c) Capital
(i) How would you verify the equity the applicants intend to contribute to the purchase?
(ii) What should you be careful about regarding this contribution? (50 words)
No. Mark
1. By valuation of equity by experts and examining the bank account history. /1
2. Here lender should be careful about any fictitious contribution and false
declaration. Also any valuation report provided by applicant should be
examined to avoid any fraud contribution.
/1
d) Collateral
(i) Assuming the valuation placed on the property is $480,000, calculate the loan to
valuation ratio (LVR).
(ii) Given the LVR that you have calculated, what steps might the bank take to protect
its position? (25 words)
No. Mark
1. Loan Amount: $480000
Property Value: $480000
Thus LVR would be: ($480000/$480000*100): 100%
/1
2. As LVR is above 80% so bank should obtain mortgage insurance from
applicant.
/1
e) Conditions
Using the information that has been presented, identify any ‘conditions’ that
might impact on this loan application. How should they be handled?
Mark
Conditions: /2

 Actual usage of loan amount should be loan purpose.
 All facts and information provided by applicant are true.
 Applicant has not concealed any relevant information from lender.
For handling these conditions, lender should take written declaration from
applicant. Further they can examine these condition with help of experts like
actuary and auditors.
Task 7.11
What is your organization’s policy about notifying applicants of the outcome of their
application?
Mark
Organization notify applicants about outcome of their application in writing by
sending a formal letter.
/2
Sub-total /8
Continued
Task 7.12
The credit application that is forwarded to the credit provider is accompanied by supporting
documentation used to verify the information concerning the financial position of the client.
List six types of document that are likely to be forwarded. In the case of Ross and Melissa
Cooper.
No. Mark
1. Identify and Residence proof. /1
2. Personal Assets and Liabilities statement. /1
3 Certificate of salary from the employer for last 3 months /1
4. Advance Processing Cheque: A canceled cheque that help in validating the
bank accounts of Ross and Melissa cooper.
/1
5. Form number 16 which show the IT Returns for the past 2 financial years. /1
6. Allotment of the Letter from responsible Society or Housing Board. /1
Task 7.13
What should be the rules regarding access to client files?
Mark
A Representative who is a Mortgage Broker / Creator or Financial Broker shall at
all occasions maintain these accounting records as reported accurately (unless
otherwise mandated by law in a specific instance). It also justify the proceedings
associate with the currency acceptable or included by the Associate on property
for a customer or any register the third party (other than a consumer) on regular
basis.
/2

Task 7.14
There are times that you might suggest to clients that they should have a fixed
interest loan for a period. Explain why you would do this.
Mark
The importance of fixed interest loan is that individual would always have the idea
of loan installment and they can easily make the payments. If the economic
circumstances suggest the reduced interest rates are likely to increase, that is the
best choice a creditor might choose to keep making certain Ross and Melissa
can keep paying a lower amount as interest. Thus it can be stated that when
parties are very careful about money management and want to manage
repayment schedule with such a fixed monthly sum. They are more interested in
that sort of rate of interest as it offers high degree of certitude.
/1
Task 7.15
List the information you should include on a client file.
Mark
During the entire process of Home loan, it is the duty of the broker to include
the detail and systematic information on the client or party file that help in easy
obtaining the loan amount. These information is mainly related with:
 All legal document of the interested party willing to purchase the land.
 Certified valuation document about the property.
 The property must contain the No objection certificate.
/2
Sub-total /11
Total /64

Task 8: Steps Taken by the Credit Provider
8 Build and
maintain
business
networks and
relationships
As indicated, the process of interviewing a client, carrying out a preliminary
assessment, and forwarding a credit application to a credit provider should
take no longer than two days. The credit provider’s task, however, is more
involved and takes longer because there are more matters to consider
than the final assessment, which is normally carried out soon after the
credit application has been received from the mortgage broker.
These matters include having the security valued and negotiating any
additional support, checking all details, preparing an offer letter, preparing
security documentation, having the loan documentation signed, attending
settlement, registering the mortgage and having the mortgage documents
stamped.
The offer letter is in fact the loan contract the mortgage broker becomes
involved once again – to check that the requirements of the loan purpose
are met and to ensure that the client understands all terms and conditions.
Task 8.1.
The final assessment of the credit application is carried out by an officer of the
credit provider, or at a higher level if that officer’s authority is exceeded. What is
that officer’s responsibility in terms of the NCCP Act.
Mark
 Upon making sensible inquiries and undertaking appropriate actions to gather
the information, a credit assisting company will render a ' provisional
determination ' about whether the customer's agreement or modifications to
the customer's contract are not unfit .
 In addition after making the required inquiries and including the authentic
steps in order to verify the information which support in making the final
evaluation in context whether the customer contract or any modification to the
customer contract will not be unsuitable.
/2
Task 8.2.
Give examples of the information that the mortgage broker may be asked to obtain
at the time of the final assessment.
Mark
There are certain important information that is needed by the mortgage broker for
their parties at the time of final assessment which help in easy process of any loan
requirement. Such as:
 Income and employment proof
 Bank statements and Retirement and brokerage accounts
/2

 Monthly debt payments and Real estate debt
Task 8.3.
Sometimes additional support, such as a third party guarantee is required in housing
loans. Indicate when such support may be required and the matters about which the credit
provider should seek to be satisfied. How is the required evidence about those matters
normally obtained?
No. Mark
1. When the borrower is unable to pay the loan in past than bank or any
credit provider do not provide any kind of financial support or loan to
the respective business or individual. In that situation bower are asked
to represent a faithful guarantee which can fulfill the legal requirement
of loan.
/1
2. Financial books of the main borrower are found under valuation then credit
provider ask for the additional support of third party guarantee.
/1
3. In situation when borrower want to start a business that require legal
license than credit provider ask for the government support.
/1
Sub-total /7
Continued
Task 8.4.
Distinguish between the credit provider’s final assessment and the credit review
carried out by the credit provider?
Mark
Credit provider’s final assessment Credit review carried
A credit company has an inherent
responsibility when evaluating the
appropriateness of a potential
mortgage or credit arrangement
beyond the appropriate requests that a
supplier of credit assistance may
provide. They believe that even a
credit provider should evaluate the
ability of the customer to serve the loan
or credit line it suggests to deliver.
It is also known as account managing
and reviewing that is basically
performed on specific period to
determine the credit profile of borrower.
When an individual or a business wants
to acquire a loan than settlement
entities, credit officer and counsellors
perform credit review to check weather
they are eligible for loan and make the
payments on agreed time.
/3

The responsibility put on the payment
supplier to perform such investigations
as evidence of its "final assessment" is
of special importance where the initial
information received on consideration
of the borrower by the credit aid
company is:
 equivocal
 not verified
 Contradictory to many other
details that may be reported to
the credit processor
 when the conditions of the
purchase or any data provided
make any legal.
The main objective of conducting
review for the creditor institution are:
 To ascertain the potentials loan
bower have a good financial
background and also balanced
credit risk.
 To assess the prospective
borrower’s the entire credit
history.
 Most important to reveal any of
the negative financial record
which could be a major
drawback to the credit provider.
Task 8.5.
List five of the checks the credit provider would normally perform before preparing an offer
letter.
The five Cs of lending is a method used mostly by creditors to gage prospective
borrowers ' credit worthiness, composed of a quintet of attributes.
No. Mar
k
1. Credit history: It Is consider to be the most important aspect which is checked
by the credit provider before making any offer letter of loan. They strongly
check the repayment of loan in the past and also evaluate the credit score which
gives credit provider the detail knowledge about the ability of borrower.
/1
2. Capacity: The creditors have to decide if an individual; or business can handle
the fees securely. The salary and experience of jobs are reliable indicators of
creditworthiness about the existing debt. The amount of revenue, the quality as
well as the form of earnings could all be measured. The amount of present and
any interest payments to pre-tax income, may be calculated by debt-to-income
ratio.
/1
3. Collateral (when applying for secured loans): Lending, lines of credit, or
credit card statements that an individual is eligible for would be covered or
/1

unsecured. The worth of total security will be calculated, subtracting from the
value all current debt protected by that guarantee. The available liquidity plays a
part in the ability to lend.
4 Capital: Even though the main source of interest is assumed to be the family
income, capital reflects the deposits, equity and other properties which may
support pay back the loan. In case if borrower loose job or suffer any losses, that
could be beneficial.
/1
5. Conditions: Creditors might want to ask how to use capita, and understand the
intent of the money, like whether the repayment could be used to buy a
properties. Certain considerations might also be evaluated, like the economic
and environmental circumstances.
/1
Task 8.6.
Why do mortgage brokers become involved once again when the offer letter is forwarded
to the client? What legal responsibility under the NCCP Act leads to this involvement?
No. Mark
1. For the reasons of the related financial data a term can be used when the
phrase is specified in the pre-contractual document.
/2
2. The specific date of publication of the monetary statement details might
be listed in the Financial statement.
/2
Task 8.7.
List four other matters relating to the offer letter that the mortgage broker should check.
No.
1. Age factors
2. Payslips form the working job company which shows detail for the recent
earning.
3. Banks often regarded the property's range from either the lending
department whereas a loan was being approved.
4. The older the association with the government, the the the likelihood of
gaining approval for the loan. Financial institutions respect their old clients
because of their experience with the banking history
Sub-total /13
Continued

Task 8.8.
Imagine that you are the client’s solicitor writing to the client. In words that the client is
likely to understand explain: what happens at settlement; how funds are normally
disbursed following settlement; and how the title document is registered.
No. Mark
1. On the settlement day
Lender viewpoints:
Make a legal register of the mortgage in the context of the title of
property.
Afterward provides the required funds to make a purchase of the
respective property.
/1
2. From the view point of Solicitors
It is checked that any pending debt on the seller's property shall be
released
every third party or individual who has ownership rights against the
property shall be omitted
/1
Sub-total /3
Total /23
Social variables refer to social dimensions of a community or region and could include
measurements of education, equity and access to social resources, health and well-being,
quality of life, and social capital.