FNSINC401 Apply Principles of Prof Practice Assessment 2

Finance and Mortgage
Broking

TABLE OF CONTENTS
SECTION 1......................................................................................................................................3
SECTION 2......................................................................................................................................4
Task 1..........................................................................................................................................4
Task 2..........................................................................................................................................4
Task 3..........................................................................................................................................4
Task 4..........................................................................................................................................4
Task 5..........................................................................................................................................4
REFERENCES................................................................................................................................6

SECTION 1
Thomas Howard was a mortgage broker for the XYZ financial service group and have
sourced Mrs Y’s details from the default list. After that broker contract Mrs Y and they offered
to obtain finance for her. The purpose proposed was to consolidate her existing loan, pay
outstanding bills and to invest additional funds with him at return of 10 %. After the consent
broker completed the application for financing on behalf of Mrs Y and applied for $80000 home
loan and $250000 interest only investment loan.
Further the application outlined all the information of Mrs Y and FSP approved the
application of Mrs Y. for period of two years she was receiving regular returns and after that she
came to know that broker is ill. She was unable to contact the broker and was unsuccessful in
recovering 250000 investments.
Later she filed complaint with Approved Australian Regulator (AAR) and outlined the following
points.
But in response to this, FSP said that loan was assessed on basis of policy and procedure
and the procedure included telephone to Mrs Y employer and verified. In the end it was
concluded that they had no liability to Mrs Y for her investment decision and no liability for the
conduct of Mrs Y broker.