Industry Knowledge and the Lending Process

This document is a written project on industry knowledge and the lending process. It includes case studies and short-answer questions covering key terms, client information gathering, assessing client situations, borrowing options, reasonable enquiries, first home owners grant, professional network, loan settlement process, interest rates, responsible lending obligations, self-employed special considerations, advising on strategies, impact of credit history, dispute resolution, financial services legislation, industry codes of practice, design and produce a document, and applying principles of professional practice. The document also provides instructions for completing and submitting the project.

Written Project
Industry Knowledge and the Lending Process
(DIPMB1_AS_v3A1)
Student identification(student to complete)
Please complete the fields shaded grey.
Student number
Written Project overall result (assessor to complete)
First submission Not yet demonstrated
Resubmission (if applicable) Not applicable
Result summary(assessor to complete)
Section 1: Case study 1 — Philip and Jennifer Brown First submission Resubmission (if required)
Task 1 — Key terms, gathering and documenting client information Not yet demonstrated Not applicable
Task 2 — Assessing the clients’ situation Not yet demonstrated Not applicable
Task 3 — Borrowing options Demonstrated Not applicable
Task 4 — Reasonable enquiries Demonstrated Not applicable
Task 5 — First Home Owners Grant and home buyer assistance schemes Not yet demonstrated Not applicable
Task 6 — Professional network and loan settlement process Not yet demonstrated Not applicable
Task 7 — Interest rates Not yet demonstrated Not applicable
Section 2: Case study 2 — Richard and Pauline Jackson
Task 8 — Responsible lending obligations Not yet demonstrated Not applicable
Task 9 — Self-employed special considerations Demonstrated Not applicable
Task 10 — Advising on strategies Not yet demonstrated Not applicable
Task 11 — Impact of credit history Not yet demonstrated Not applicable
Task 12 — Dispute resolution Not yet demonstrated Not applicable
Section 3: Case study 3 — Mary Jane Smith
Task 13 — Prepare and check a loan application Not yet demonstrated Not applicable
DIPMB1_AS_v3A1

Section 4: Working in financial services
Task 14 — Financial services legislation and industry codes of practice Not yet demonstrated Not applicable
Task 15 — Design and produce a document Not yet demonstrated Not applicable
Task 16 — Applying principles of professional practice to work in the financial
services industry Demonstrated Not applicable
Please note:To pass this written Project , you will need to be assessed as DEMONSTRATED in either your
first submission or your resubmission in all tasksabove.
Task feedback
Please refer to the assessor’s detailed feedback found at the end of each task so that you know what to do
for any tasks you need to resubmit.
You need to undertake a large amount of revision, carefully and thoroughly address each point raised by
the assessor in your own words- not quotes from other sources.
Please use a different colour for your new additional work and leave the assessor comemnts and gradings
intact, then resubmit for further assessment.
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Before you begin
Read everything in this document before you start your written Project forIndustry Knowledge and the
Lending Process (DIPMB1_AS_v3A1) subject.
About this document
This document is the written Project — half of the overall Written and Oral Project .
This document includes the following parts:
• Instructions for completing and submitting this Project
• Section 1: Case study 1 — Philip and Jennifer Brown
A case study with a series of short-answer questions:
– Task 1 — Key terms, gathering and documenting client information
– Task 2 — Assessing the clients’ situation
– Task 3 — Borrowing options
– Task 4 — Reasonable enquiries
– Task 5 — First Home Owners Grant and home buyer assistance schemes
– Task 6 —Professional network and loan settlement process
– Task 7 — Interest rates
• Section 2: Case study 2 — Richard and Pauline Jackson
A case study and a series of short-answer questions:
– Task 8 — Responsible lending obligations
– Task 9 — Self-employed special considerations
– Task 10 — Advising on strategies
– Task 11 — Impact of credit history
– Task 12 — Dispute resolution
• Section 3: Case study 3 — Mary Jane Smith
A case study and a series of short-answer questions:
– Task 13 — Prepare and check a loan application
• Section 4:Working in financial services
– Task 14 — Financial services legislation and industry codes of practice
– Task 15 — Design and produce a document
– Task 16 — Applying principles of professional practice to work in the financial services industry
• Appendix 1:Key terms
• Appendix 2: Client information collection tool/Fact finder
• Appendix 3:Loan application.
How to use the study plan
We recommend that you use the study plan for this subject to help you manage your time to complete
the written Project within your enrolment period. Your study plan is in the KapLearn Industry Knowledge
and the Lending Process (DIPMB1v3) subject room.
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Instructions for completing and submitting the
written Project
Completing the written Project
Saving your work
Download this document to your desktop, type your answers in the spaces provided and save your work
regularly.
• Use the template provided, as other formats will not be accepted for these Project s.
• Name your file as follows: Studentnumber_SubjectCode_Project _versionnumber_Submissionnumber
(e.g. 12345678_DIPMB1_AS_v3A1_Submission1).
• Include your student ID on the first page of the Project .
Before you submit your work, please do a spell check and proofread your work to ensure that everything
is clear and unambiguous.
Word count
The word count shown with each question is indicative only. You will not be penalised for exceeding
the suggested word count. Please do not include additional information which is outside the scope of
the question.
Additional research
When completing the ‘Client information collection tool’in Appendix 2, assumptions are permitted,
although they must not be in conflict with the information provided in the Case study.
Throughout the Project you will also be required to research additional information from other
organisations in the finance industry to find the right products or services to meet your client’s
requirements or to calculate any service fees that may be applicable.
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Submitting the writtenProject
Only Microsoft Office compatible written Project s submitted in the template file will be accepted for
marking by Kaplan Professional Education. You need to save and submit this entire document.
Do not remove any sections of the document.
Do not save your completed Project as a PDF.
The written Project must be completed before submitting it to Kaplan Professional Education.
Incomplete written Project s will be returned to you unmarked. The written Project must be submitted
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returned to you unmarked.
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marking you will be unable to make any further changes to it.
Once you submit your written Project for marking you will be unable to make any further changes to it.
You are able to submit bothProject s earlier than the deadline if you are confident you have completed all
parts and have prepared a quality submission.
Please refer to the Project submission/resubmission videos in the Assessment section of KapLearn under
your ‘Project Enrolment’ for details on how to submit/resubmit your written Project .
Your Written Project and Oral Project must be submitted together on or before your due date. Please
check KapLearn for the due date.
The written Project marking process
You have 12 weeks from the date of your enrolment in this subject to submit your completed Project .
If you reach the end of your initial enrolment period and have been deemed ‘Not yet demonstrated’ in one
or more assessment items, then an additional four (4) weeks will be granted, provided you attempted all
assessment tasks during the initial enrolment period.
Your assessor will mark your written and oral Project and return it to you in the Industry Knowledge and
the Lending Process (DIPMB1_AS_v3A1)subject room in KapLearn under the ‘Assessment’ tab.
Make a reasonable attempt
You must demonstrate that you have made a reasonable attempt to answer all of the questions in
your written Project . Failure to do so will mean that your Project will not be accepted for marking;
therefore you will not receive the benefit of feedback on your submission.
If you do not meet these requirements, you will be notified. You will then have until your submission
deadline to submit your completedwritten and oral Project .
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How your written Project is graded
Project tasks are used to determine your ‘competence’ in demonstrating the required knowledge and/or
skills for each subject. As a result, you will be graded as either Demonstrated or Not yet demonstrated.
Your assessor will follow the below process when marking your Project :
• Assess your responses to each question, and sub-parts if applicable, and then determine whether you
have demonstrated competence in each question.
• Determine if, on a holistic basis, your responses to the questions have demonstrated overall competence.
You must be deemed to be demonstrated in all assessment items in order to be awarded the units
of competency in this subject, including:
• all of the exam questions
• the written and oral Project .
‘Not yet demonstrated’and resubmissions
Should sections of your Project be marked as ‘not yet demonstrated’you will be given an additional
opportunity to amend your responses so that you can demonstrate your competency to the required level.
You must address the assessor’s feedback in your amended responses. You only need amend those sections
where the assessor has determined you are ‘not yet demonstrated’.
Make changes to your original submission. Use a different text colour for your resubmission. Your assessor
will be in a better position to gauge the quality and nature of your changes. Ensure you leave your first
assessor’s comments in your Project , so your second assessor can see the instructions that were originally
provided for you. Do not change any comments made by a Kaplan assessor.
Units of competency
This written Project is your opportunity to demonstrate your competency against these units:
FNSFMB401 Prepare loan application on behalf of finance or mortgage broking clients
FNSFMB402 Identify client needs for broking services
FNSFMB403 Present broking options to client
FNSFMK505 Comply with financial services regulation and industry codes of practice
FNSINC401 Apply principles of professional practice to work in the financial services industry
Note that the written and oral Project is one of two assessments required to meet the requirements of the
units of competency.
We are here to help
If you have any questions about this written Project you can post your query at the ‘Ask your Tutor’ forum
in your subject room. You can expect an answer within 24 hours of your posting from one of our technical
advisers or student support staff.
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Section 1: Case study 1 — Philip and Jennifer Brown
Background
Philip and Jennifer Brown are a young couple about to buy their first home. They have been married for
five years and during that time have rented an apartment while saving for their own home.
Following a personal referral from Glenn Brown, Philip’s brother you have already had a first meeting with
Philip and Jennifer to discuss their objectives and needs. They admitted they have little time to do much
research of lenders, have limited knowledge of the loan products available and have approached you to
guide them through the process as they are confused.
During (and subsequent) to your first meeting, Philip and Jennifer have provided the basic information
documents — pay slips, tax returns, bank statements, property details for review/verification. You have
now undertaken your preliminary assessment and need to discuss and present to them the proposal
covering the options and your recommendations. It is important to get the proposal moving quickly,
as the agent has indicated other parties are interested in the property.
They have been looking at properties for the past three months and have found a 10 year old established
apartment that has really caught their eye, although they have some concern over the kitchen which
requiressome minor renovations.
They have not paid a deposit at this stage, but the Real Estate Agent has provided some guidance on
additional fees and charges.
Following is a summary of the details of the property they wish to purchase, the couple’s financial and
employment details, and the loan features they require.
The property
Address Unit 1, 92 Seaside Lane Edgartown (Your state)
Purchase price $490,000
Description 2 bedroom, 2 bathroom Strata Title apartment
Agent details Stephanie Jones
Phone [phone]
Mobile [phone]
The couple
Current address Unit 12, 22 Wentworth Lane, Highville, (Your state)
Philip and Jennifer have lived there since March 2012
Home phone [phone]
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Funds position
Purchase price $490,000
Clients’ estimate of costs $25,000
Total required $515,000
Loan $440,000 + LMI
Clients’ total contribution (including deposit of $50,000) $75,000
Use fees and charges applicable to your state. If a servicing calculator you are using requires a postcode,
select one that would represent a reasonable suburb/location in your city or state.
Assets
Capital Bank savings account (joint) $78,000
Capital Bank cheque account (joint) $1600
Holden Commodore SS 2007 (Philip) $25,000
Kia Cerato Sport 2015 (Jennifer) $9000
Superannuation — Capital Bank (Philip) $28,000
Superannuation — Capital Bank (Jennifer) $62,000
Household effects (insured value) $40,000
Liabilities
Capital Bank personal loan (Philip) $5,600 (repayments $180 p.m.)
Capital Bank Visa card (Philip) $200 (limit $4,000)
Capital Bank Visa card (Jennifer) $1,600 (limit $5,000)
Payments have always been met on time and any prior loans repaid in terms of contracts. The minimum
monthly commitment on each of the credit cards should be calculated at 3% of the credit limit.
Living expenses
Annual expenditure for living expenses — $33,000.
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Employment and income
Philip (date of birth 21/2/87)
Position Team Leader (full time)
Employer ACE Limited 101 City Rd, Westside (Your state)
Phone [phone]
Income (gross) $58,000 p.a. monthly gross income: $4,833
Employer contact Dwayne Johnson, HR Manager
Length of service Since October 2005
Driver’s licence 8855KL
Email [e-mail]
Jennifer (date of birth 8/10/88)
Position Accountant (full time)
Employer Tech city 804 High Street, City East (Your state)
Phone [phone]
Income (gross) $95,000 p.a. monthly gross income: $7,917
Employer contact Bruce Wayne, HR Manager
Length of service Since March 2006
Driver’s licence 17016C
Email [e-mail]
Solicitor’s details
Jones and Co
22 High Street, City East (Your state)
Phone: [phone]
Email: jonesandco.net.au
The solicitor has quoted a fee of $1,500 for the conveyance.
Page 9 of 54

The loan requirements
• 30 year term
• premium option home loan features
• variable interest rate (for this case use 4.5%p.a.)
• LMI to be capitalised
• proposed settlement date — six weeks from exchange of contracts
• ability to make additional payments from time to time without penalty
• fortnightly repayment option
• redraw facility
• funds access via card.
Note: Loan application fee is waived under Special Offer.
Other information
• They have advised that the Real Estate Agents have indicated they need to make a formal offer within
the next 10 days, however they are reluctant to do so until they obtain an approval.
• Jennifer has asked if there are any professional package benefits available because she is an accountant.
However, she did confirm she has not maintained hercontinuing professional development.
• Jennifer previously owned and lived in an apartment with her two older sisters when they attended
university but they sold this before she married — they did not make a lot from sale.
• Family plans are five years away.
• They do have plans to take a major overseas trip before family comes along.
• Philip is hoping for a promotion within the next 12 months upon possible retirement of a long-term
employee where he works.
 They have also expressed a concern about the possibility of interest rates increasing.
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Project tasks(student to complete)
Task 1 —Key terms,gathering and documenting client information
1. Complete the ‘Key terms’ (located at the end of the written Project inAppendix 1).
2. Using the information provided in Case study 1, complete the ‘Client information collection
tool’(located at the end of the written Project in Appendix 2).
3. You will also need to complete the Genworth Serviceability Calculator to assess the security,
debt service and borrowing capacity for Jennifer and Phillip Brown. To do this, follow these steps:
(a) Use the details in Case study 1.
(b) Read the Genworth Calculator Supplementary Material Guide available in the Kaplearn
DIPMB1v3 subject room.
(c) Process the loan application using the Genworth Serviceability Calculator accessible here:
<https://www.genworth.com.au/lenders/lmi-tools/serviceability-calculator>.
(d) Once you have processed it, download a copy of the PDF and save it to your desktop.
Note:You will need to upload a copy of this pdf with your written and oral Project submission. This will
assist your assessor with providing feedback on your written and oral Project submission.
Note: Any assumptions you make should be listed and should not be in conflict with the case study
information already provided.
Assessor feedback for Task 1 — Key terms, gathering and documenting client information
Appendix 1. In Q1,2,3 you were requested to write definitions for each item
Appendix 2 Need to base asset & Liabilities statement on the case study
In Anticipated Costs the deposit is $50k not $75K, LMI is too low , rates are not $24,200
In Funds to Complete Statement need use loan amount in case study and add LMI to that amount. LMI needs to be calculated using
the Genworth LMi Premium Estimator and supply a copy. Need to include cheque and savings account balances from the case
study, there are no sale proceeds so this needs to be deleted
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
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Task 2 — Assessing the clients’ situation
1. Based on the information provided in the case study and any other online tools used, you now need
to assess the clients’ loan application paying particular attention that you have met legislative
requirements, followed industry codes of practice and met lender credit policy.
Comment on issues such as:
• does it appear to meet legislative requirements (e.g. NCCP)
• maximum borrowing capacity of client
• capacity to meet deposit and total cash contribution for the loan required
• repayment requirements based on the loan required
• what the security will be and if it is appropriate
• do Jennifer and Phillip require Lenders Mortgage Insurance (LMI), and if so, how much will it cost and
what are the options to paythe fee
• what loan amount would you recommend, and why
• likelihood that the clients will be able to meet all their financial obligations
• do Jennifer and Philip qualify for concessions on any of the fees and charges
• any other issues that may impact, now or in the future, on the clients’ ability to meet their
obligations, including any possible risks.
Provide data to support your comments and conclusions. (750 words)
Note:The assessment of the clients’ needs is a critical prelude to you completing Part 4 of the
Oral Project requirement for this course.
Student response to Task 2: Question 1
The client is meeting all the legislative requirement of NCCP in order to borrow a home loan. It includes
that the borrower is a natural person. The charge is made for providing the credit and credit provider
provides the credit in course of a business. In the given case, the purpose of the borrower behind borrowing
home loan is to purchase and renovate the residential property for household purpose. The maximum
borrowing capacity is indicates the highest amount that the borrower can pay for the home loan despite
having all the changes that affect the borrowers borrowing capacity such as change in interest rate
(Bergmann, 2020).
The maximum borrowing capacity of the Philip and Jennifer is $1,519,000. The total loan amount of the
Philip and Jennifer is $446424 which is 440000 + 1.46% (LMI). The capacity of the client to meet deposit is
10% which is $50000 and the clients are able to meet the capacity of the deposit. The capacity of the Philip
and Jennifer to meet the deposit amount is less than the total contribution of $50000 for the loan requirement.
It indicates that Philip and Jennifer are able to meet the 10% of the initial deposit of home loan. The total
cash contribution of the client for the loan requirement is $75000 which includes $50000 of initial deposit
and $25000 is the fees and charges of the lender. The total amount of home loan required by Philips and
Jennifer is $446424 at their initial stage. Repayment requirement of the loan is that the tenure of the home
loan is 30 years and the variable interest rate of the home loan is 4.50% per year ( Pawson, Milligan and
Yates, 2020). The requirement of the loan is also that the LMI is capitalized in the principal amount of the
home loan. The fortnightly repayment facility is also available to the client in order to half the repayment.
The lenders require 10% of the home's purchase price as initial deposit and remaining 90% as LVR.
Security in the case of home loan is a property security which guarantees the lenders that the original value
of the security is higher than the loan amount and secures the loan. In this case, there is no security provided
by the Philip and Jennifer to the lender on order to secure the loan indicate that the risk of losing the loan
amount is high. In case if lender make compulsory security requirement, then it will reduce the risk of the
lenders. In this case, there is the requirement of LMI and the cost of the cost of Lenders Mortgage Insurance
is 1.46% which is $6424. Generally there are two option is available to the borrowers in order to pay the fees
of Lenders Mortgage Insurance is an up-front fees and by capitalization in the amount of the home loan.
Philips and Jennifer chose the capitalization option to pay the fees of LMI to the lender. The loan amount
Page 12 of 54

that is suggestible to the Philips and Jennifer is same $440000 that is approx 90% LVR. It is because the
capacity of the borrowers to pay the initial deposit is 50000 which is the approx 10% of the purchases price
of the home. But they can also borrow the loan up to their maximum borrowing capacity which is $1,519,000
as per the joint annual salary and expenses of both Philip and Jennifer.
For the payment of the 50000 if initial deposit and 25000 of fees Philip and Jennifer can utilize their joint
saving account with amount $78000. The joint annual earning of the couple is $153000 and annual expense
is $33000, credit limit of $9000, personal loan payment of $2160 and the EMI of $2262, the couple left with
the saving of $81696 which indicate that the client is able to meet all their financial obligations. Philip is a
manager of the company and is not allowed for any concession in the LMI fees and charges. But Jennifer is
an accountant and as it is mentioned in the provision of the home loan that the accountant LMI home loan is
get waived if their maximum loan value is up to $2 million and 90% of the property value is cover in the
loan amount. As Jennifer is meeting all the eligibility criteria of the LMI exemption, so lenders have to offer
the no LMI home loan to the couple in case if loan is taken by only Jennifer not jointly. As the interest rate
of the home loan is variable in nature, so it is one of the risk issue arise in future and the ability to meet with
issue is depends upon the percentage of change in interest rate.
2. (a) Most lenders stress test loan repayments by adding an additional 2–3% on to the loan
repayments to make sure a borrower can afford the repayments. If interest rates moved
3% higher, what would Philip and Jennifer’s loan repayments be and do you think they would
be able to cope with the extra repayments? (100 words)
Student response to Task 2: Question 2(a)
In case if the interest is increased by 3%, then the variable interest rate of the home loan in the present case
moved from the 4.50% to the 7.50% which also make changes in the loan repayment amount. When the
interest rate is 4.50%, then the EMI of the loan is $2262, total interest payable is $367883 and the total
payment including interest is $814307. In case of new interest rate of the home loan of 7.5%, the loan is
increased by $859, total interest payable and total payment is increased by $309419 (Paterson and Howell,
2018). Because of the increase in the EMI, the couple left with the saving of $71388 which shows that they
are able to meet this extra repayments.
(b) Identify appropriate product options you can present to the clients that may remove this
interest rate risk?(50 words)
Student response to Task 2: Question 2(b)
In order to remove the interest rate risk one option that the client can adopt is by going with the fixed rate of
interest (Nicholson, Skelton and Tarr, 2019). Despite this, the client can also borrow the large amount of the
loan in order to reduce the rate of the interest. Borrowing the loan equal to 80% of the property value also
reduces the interest rate risk.
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Assessor feedback for Task 2 — Assessing the clients’ situation
LMI amount is wrong and need to supply copy of Genworth LMI Premium Estimator
Need to supply copy of Genworth Servicing Calculator which will have maximum borrowing amount – which figure supplied is
wrong
Loan amount is wrong so repayments will be wrong
They need to pay the LMI
Stess tested repayments are wrong because you have the wrong loan amount
Question(s) that need to be resubmitted (if required) 1 & 2
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 14 of 54

Task 3— Borrowing options
Although Philip and Jennifer are looking to borrow at approximately 90% LVR, what other options could you
present that would avoid the cost of LMI? (100 words)
Student response to Task 3
The way that the Philips and the Jennifer couple can adopt in order to avoid the cost of the Lenders Mortgage
Insurance is by saving the bigger deposits for the purchase of the affordable loan. This further reduces the
amount of loan to low value ratio and help the couple in avoiding the LMI of the home loan (North and
Wilson, 2020). The another way to avoid the LMI of the loan is by arranging the any family guarantee and
property security in order to cover the loan security. Being a doctor, accountant any professional service also
help in avoiding the Lenders Mortgage Insurance of the home loan.
Assessor feedback for Task 3 — Borrowing options
good
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Demonstrated
Resubmission (if required) Not applicable
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Task 4 — Reasonable enquiries
In the course of gathering information about the couple, you are required under the National Consumer
Credit Protection Act 2009 to make all ‘reasonable’ enquiries to determine a borrower’s objectives,
requirements and financial situation.
Identify at least six (6) ‘reasonable’ enquiries that you would make with the clients in the case study
andexplain why these enquiries are important in terms of NCCP compliance. (200 words)
Student response to Task 4
Six reasonable inquiries that the lenders have to make with the clients in order to reduce the risk of the
lender:
 What was the impact of the credit contract on the client when they enter into the complex and
unsuitable credit contract.
 Whether the client is the new or the existing customer of the credit provider.
 Whether the client has the capacity to enter into the credit contract after meeting its fixed and
variable expenses.
 The current salary of the client and the nature of the source of the client salary.
 The desired credit card limit of the clients and the period for which the credit is required.
 Recent income tax return, payroll slip and the statement of their income from their accountant.
The importance of inquiries about the borrower's objectives, requirements and financial situations help the
lenders to know the clients profitability and the stability (Bhutta and Keys, 2017). This further help the
lenders to know whether the client has any assets to cover the home loans security or not. It also helps the
lenders to know the deposit capacity of the clients and the nature of the source of the income.
Assessor feedback for Task 4 — Reasonable enquiries
Amount and purpose of loan
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Demonstrated
Resubmission (if required) Not applicable
Page 16 of 54

Task 5 — First Home Owners Grant and home buyer assistance
schemes
Describe the First Home Owner’s Grant or home buyer assistance scheme benefits and stamp duty
concessions that are available in your State or Territory, who would be eligible and what would be
their benefit? Are Philip and Jennifer eligible for any assistance?
Note: Please identify which State or Territory you are from in your answer.(150 words)
Student response to Task 5
The state from where the Philips and Jennifer belong is the New South Wales of the Australia. The eligibility
criteria available to the first home buyer assistance under First Home Owner's Grant scheme is if a client
purchase existing home having value less than 650000 then they need not to pay any transfer duty (Bhutta
and Ringo, 2017). And if the value of the property is exists between the 650000 and the 800000 and apply
for concessional transfer rate than the amount of concession is based upon the value of existing property. In
the given case, Philip and Jennifer's purchase existing home and the property value is 490000, then they are
eligible for the full exemption of the stamp duty. The first home owner grant and stamp duty concession is
only available per transaction. As jeneifer has owned a home before so they are not eligible for the first home
grant and stamp duty concession.
Assessor feedback for Task 5 — First Home Owners Grant and home buyer assistance schemes
As Jennifer has owned a home before then this is not a first home .
Will they be eligible for the First Home Owners Grant
Will they be eligible for stamp duty concessions
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 17 of 54

Task 6 — Professional network and loan settlement process
1. Name three (3) parties, who are not directly involved in the processing of a loan and what their role is.
Explain how you would communicate with them in an efficient and effective manner so that they
understand pre-settlement conditions and their involvement required.(100 words)
Student response to Task 6: Question 1
The three parties who are not directly involved in the processing of a loan is Glenn Brown brother of Philip's,
Real estate agent and the seller of the property. The role of the Glenn Brown is the pre- settlement of the
property purchase id that he reffer the Philip's and Jennifer's to the lender in order to borrow the home loan
(Koeppl and MacGee, 2017). The role of the Real state agent is to place a meeting between the Philips and
Jennifer's and the seller of the home. The real estate agent role is intermediary. The role of seller in this case
is that they are the owner of the home. The real estate agent is a profession which involved in sale of the
property and loan.
2. Explain how you would develop and maintain relevant networks with professionals such as those you
detailed above or other professionals to ensure you are up to date with the products or services they
provide.(100 words)
Student response to Task 6: Question 2
The first way towards maintaining the professional network is organizing and prioritize the current
connections on the social medias such as Facebook, twitter, Instagram etc. By showing the care towards the
professionals in order to stay in touch such as emails, phone calls etc (Park, 2020). is also one way to
maintain relevant network with the professionals. By offering the professional any help in case they are in
need of any help and by help them in case if the professional deals with any challenge is the way to develop
relevant network.
3. You want to ensure that Philip and Jennifer have all the key insurance protections in place in case
something unfortunate was to happen to one of them. What process would you follow during your
discussion with the clients to ensure you have a good assessment of their needs?(100 words)
Student response to Task 6: Question 3
The brokers are the professionals who experienced the different ins and outs of the claims process. They
build a strong relationship with the companies by working daily with the insurance companies. The brokers
are able to negotiate with the insurer on behalf of the clients in case if the things are not straightforward with
the claim (Park, 2018). The brokers are the one who truly take care of all the issues the client faces while
selecting the lender and also while taking the loan for the home. CFA is a profession that provide advise
related to the finance.
4. Briefly explain why it is important for the broker to remain informed of developments in the lending
process despite not being actively involved at every stage.(100 words)
Student response to Task 6: Question 4
The mortgage broker are not directly involve in the lending process or the buying and selling agreement of
the property, but they help the seller in knowing the market value of the property. They also help the seller in
providing the best client who can offer them the highest price of the property (Ouazad and Kahn, 2019).
Mortgage broker are the one who find the buyer for the seller of the real estate property and they find the
seller for the buyer of the real estate property. In the given case the Philips and Jennifer come across the
seller of the home through mortgage broker only.
Page 18 of 54

5. Application form and related documents have now been signed and forwarded to the Lender for
approval. Philip and Jennifer have agreed that you will keep their Solicitor informed of progress if/when
the loan is approved.
Refer to the ‘Example of an Organisation’sPolicies and Procedures’ document in toolbox and explain
what the service standards and timelines are up to and including the issue of offer letter and mortgage
documents. (100 words)
Student response to Task 6: Question 5
The mortgage the confirmation of mortgage loan has been checked and approved by person. The time taken
by company to proceed the loan into person account and amount deduction and total amount revived by the
person and interest details and EMI's of person monthly wise will be given in the time line (Wu and et.al.,
2017).
6. Clients have now called to execute loan offer and mortgage documents and are nervous that their
Solicitor is very busy and difficult to contact. They want to know who will be responsible for what tasks
from this point in the lead up to settlement and immediately following settlement.
Explain to Philip and Jennifer who is responsible for completion of what tasks once the loan documents
have been returned to the lender and in the lead up to settlement and once settlement occurs. Focus on
the lending organisation and the client’s solicitor/conveyancerroles in this part of the lending process.
(150 words)
Student response to Task 6: Question 6
Solicitors are the one who gives legal advice to the private and the commercial clients in case if they enter
into any agreement with the others. The solicitor himself responsible for not able to solving the legal issues
related to the clients. In case if the solicitor is busy, they can call the branch and also email the person who
are practicing under the solicitor to solve the issues of the Philips and Jennifer's (Competition and Consumer
Commission, 2020). The client also file complaint against the solicitor that they are proceeding the lending
process and also not forwarding the work to the other solicitor. The role of the solicitor is to provide all the
legal advice to their client in case if they sign the agreement. If solicitor are busy, then they have to tell this
to the clients before entering into the agreements.
Assessor feedback for Task 6 — Professional network and loan settlement process
Q 1 real estate agent is correct , what other professions are involved in the slae of the property and the loan , but do not work for
the lender or Broker
Q3 A mortgage broker is not qualified to give financial advice so what profession will you refer your client to
Q4 The broker is you the mortgage broker not the real estate agent- please doanswer again
Q5 task asks explain what the service standards and timelines are up to and including the issue of offer
letter and mortgage documents. (100 words)
Question(s) that need to be resubmitted (if required) 1,3,4,5
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 19 of 54

Task 7 — Interest rates
1. Conduct your own research and answer the following:
(a) What is the role of the RBA with respect to the movements of interest rates?
(b) Why is it important to have these controls and how do they impact mortgage loans in Australia?
(c) Are banks obliged to follow the RBA cash rate? Explain the reason for your answer.
(200 words)
Student response to Task 7: Question 1(a)–(c)
RBA form monetary policy that also involve declaration of the interest rate. It takes decision over interest
rate that further influence over interest charge by other banking and financial institutions. The policy directly
influence the further borrowing transactions in Australia. Banks come under the RBA which is further
influenced the interest rate (Wong and et.al., 2018). Monetary policy is unanimous of the entire country
which further influence every single aspect of the policy making in country. . Yes, banks are obliged to
follow the RBA cash rates because increases in cash rates set by RBA increases the interest rate of
borrowings
2. Philip and Jennifer from Case study 1, have called to discuss whether they should fix the interest rate on
their loan after having received several conflicting viewpoints from family and friends.
(a) Explain the process you would use to research and identify the various product options available
to meet the needs of Philip and Jennifer.
(b) Explain to Philip and Jennifer two (2)advantages and two (2) disadvantages of fixing a loan over
different fixed rate terms.
(150 words)
Student response to Task 7: Question 2(a)–(b)
The research in respect to the interest rate can be done with the support of professionals. They can further go
through internet to search the entire information. As internet disclose the different product options. The
information sources provide different advantages like it clarify the client about the product. Interest rate also
clarifies in this. There are certain disadvantage like many times information do not modify by these
information sources (Wilhelmsson, 2020). Also the professionals in greed of grating customer spread wrong
information that is further mislead the entire information.
3. What other option/s can you suggest if they remain uncertain about whether to fix the rate on their
loan?(100 words)
Student response to Task 7: Question 3
They can visits to branch location in search of information. This will led them towards the right information.
Interest in loans are rather fix or flexible. The current loan do not offer fixed interest that indicate as the
interest will remain flexible
Page 20 of 54

Assessor feedback for Task 7 — Interest rates
1c – not answered to assess
Question(s) that need to be resubmitted (if required) 1c
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 21 of 54

Section 2: Case study 2 — Richard and Pauline Jackson
Background
Richard and Pauline Jackson have a small mowing and gardening business in which they have been working
for the last eight years. As it is only the two of them in the business they operate as a partnership.
They have approached you to help restructure their finance, as they are finding the management of their
debts a struggle following the loss of one of their major commercial property contracts.
After further questioning, you realise that the situation is more serious than they originally explained;
they had missed payments on their mortgage, only pay the minimum on their credit card of 3% each month
and the work ute they have on lease is expiring. They have a $15,000 residual payment due and do not
have the funds available.
They lost the major contract 12 months ago and fell behind on the mortgage payments soon
after.They spoke to their lender (First and Last Bank) anda ‘hardship application’ was approved. The missed
payments were corrected by extending the term of their loan. Nothing adverse was recorded on their
credit file but they are still struggling with all the monthly commitments.
After reading the case study above and reviewing their funding position below, answer the questions that
follow:
Assets
46 Walters Road, Ritchfield $490,000
First and Last Bank savings account (joint) $1,200
Little Saving Building Society cheque account (joint) $2,300
Business debtors (unpaid invoices for work) $6,200
Ford Utility, 3 years old (work vehicle) $25,000
Holden Commodore, 7 years old (family car) $15,000
Superannuation — AMB Insurance (Richard) $46,000
Superannuation — AMB Insurance (Pauline) $29,000
Household effects (insured value) $66,000
Liabilities
Lender Situation Interest rate Monthly repayment Debt
First and Last Bank
(home loan — joint)
Currently up to date though had three-month extension
to contract after hardship application 12 months ago
5.7% $1,567.00 $270,000
Big Bank Visa card
(Richard)
Only able to repay 3% per month for last six months 18.95% (pays 3% per month)
$240.00
$7,800
(limit $8,000)
Little Bank Visa card
(Pauline)
Only able to repay 3% per month for last six months
Is over limit by $800
21.5% (pays 3% per month)
$90.00
$3,800
(limit $3,000)
My Domain
Furniture Store
Did not keep to interest free contract and paying debt
by instalments
28.50% $370.00 $3,400
Super Car Loan
lease
Four-year contract expiring next month and need
$15,000 to pay residual
n/a $850.00 $15,000
(residual)
Total $3,117.00 $300,000
Page 22 of 54

Project tasks(student to complete)
Task 8 — Responsible lending obligations
The National Consumer Credit Protection Act 2009 imposes ‘responsible lending’ obligations on brokers
that must be satisfied by all people arranging loan applications. The primary objective under responsible
lending guidelines is that the credit facility offered to the borrower is ‘not unsuitable’ for the borrower,
meets their requirements and objectives and will not create substantial hardship.
1. Refer to ‘What is substantial hardship?’ available in the toolbox. In your own words how would you
define ‘substantial hardship’ (detailed information on this subject is found at RG 209 issued by ASIC)?
(150 words)
Student response to Task 8: Question 1
Substantial hardship is denoted as unanticipated emergency that is caused due to an event outside of the
control of an individual. Substantial hardship demonstrate as an event causes to some financial failures over
the dependents of borrower. RG 209 issues of ASIC indicated that a product is not suited if consumer is
unable to comply with financial obligation (Herbst, 2018). The issue is related to evaluation about the
individual capacity and potential of customers in respect to the repaying obligations.
2. What are the benefits of debt consolidation for Richard and Pauline? (100 words)
Student response to Task 8: Question 2
Debt consolidation will allow the Richard and Pauline to easily manage the repayment deadline. It further
lower the interest rate over borrowing. It minimizes risk of collateral repossession. It further regulates the
fixed payment amount in respect to loans and due amount (Amurwon and et.al., 2017). It also supports in
reducing risk value. It reduces the monthly expenditure in respect to debt repayment. This will further
support the Richard and Pauline to improve the credit score.
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3. Richard and Pauline have decided to consolidate their debts into their home loan with two splits,
one for the existing home loan and a second split for all other debts.
In the template below provide a new liabilities summary once Richard and Pauline have completed the
debt consolidation including their new monthly repayments.
Note: They have chosen to refinance with ‘One State Bank’ who are offering a 4.5% interest rate on a
variable, principal and interest loan over 30 years.
Student response to Task 8: Question 3
Lender Interest rate Monthly repayment Debt
One State Bank 4.50% $1898 $300,000
Total 4.50% $1898 $300,000
4. What savings will Richard and Pauline obtain in monthly repayments?
(Remember to show the calculation of how you determined the savings). (100 words)
Student response to Task 8: Question 4
Richard and Pauline will save $1219 (3117 – 1898). They will get significant advantage in repaying every
monthly installment due to the inclusion of all the debts in housing loan. This saving will further improve the
buying power of the individuals. $1219 is a significant amount that can further support the Richard and
Pauline in repaying all dues and also meet the monthly expenditure of both the individuals (Moore and
Doyon, 2018).
Assessor feedback for Task 8 — Responsible lending obligations
Q3 Repayments are a 30 yr term are wrong which impacts on answer in Q4
Question(s) that need to be resubmitted (if required) 3 & 4
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 24 of 54

Task 9 — Self-employed special considerations
1. As Richard and Pauline are self-employed, what documents will you need to obtain to verify and assess
their income? (150 words)
Student response to Task 9: Question 1
Richard and Paulie both are business personals. They need to submit the return over the income of business.
In process of taking loan over business income tax returns needs to be submitted. Based on the income
demonstrated under the return filled total income is analysis of both Richard and Paulie. Total income they
earn are presented under the return submitted. This is a conclusive basis to project the income of both the
individuals. Income of self employers are always tough to guess as it is impossible to predict the existing
income based on previous income structure (Shulman, 2018). Income tax return will project the exact income
earned by both Richard and Paulie. Eturn contain all types of income such as salary, business, rental and all
other types of sources of income. This is the only way to identify the income of self-employed individual.
2. If a Low-doc application is an option for the customer, name three (3) extra documents you will need
to obtain and assess. Explain how each of these documents will establish their income.(150 words)
Student response to Task 9: Question 2
In case of Low doc application extra documents like borrower income declaration, ABN and Business
Activity Statement are also the additional documents that needed to be submitted by the business entity.
These documents are the additional requirements associated with the loan application under low doc
application. Borrower income declaration is the self projection of borrower in respect to its income. This
document clearly define the amount of income it earns every month or year (Loan and et.al., 2018). ABN
further demonstrate about the income of an individual. Activity based statement also disclose all types of
activities about the business organization. Activities demonstrate about the income of the Richard and
Pauline. All these documents demonstrate about the income in different ways. In case of loan income of the
borrower play huge role as it demonstrate about the repaying capacity of the borrower. Based on the income
overall purchasing power of the borrower is identified ad which further reflect the individual potential ability
to meet up its loan liability.
3. Explain how applying for a Low-doc loan could lead the mortgage broker to be accused under NCCP
of recommending an ‘unsuitable’ product. (250 words)
Student response to Task 9: Question 3
Low doc loan is a process in which lender approve the home loan of the borrower without availability of
income verification. In case of loan income verification play a huge role as it directly demonstrate the
income of the individual taking loan. This process allow the lender to assess and analysis of the income
capacity and potential of the borrower. As this process do not required income verification that also causes to
bad debt in many cases. Many times under this practice due to the unavailability of the proper income
records of the borrower lender allow the money more than the actual capacity of the borrower. In such a
circumstance the product is called as unsuited. In context to loan suitability of borrower to meet all
requirements so that there are no further issues arises in repayment of respected loan (Wilkinson, Antoniades
and Halvitigala, 2018). NCCP clearly disclosed all key requirements associated with loan payment and
borrowing terms. When any unsuited product arises in the mortgage than the broker also get accused. This
further include such loans that are taken out of the fake documentation. In case of loan documents are
essential as all further inquiries are proceeded based on the information submitted. All loans taken based on
fake documentations are disclosed as suited. This is the responsibility of the Mortgage broker to assess the
authenticity of the documents submitted in the whole transaction. If any casual arises after the loan has been
given proper inquiry over the mortgage broker is established to identify whether the broker is under guilty or
not.
Page 25 of 54

Assessor feedback for Task 9 — Self-employed special considerations
good
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Demonstrated
Resubmission (if required) Not applicable
Page 26 of 54

Task 10 — Advising on strategies
Following the presentation of your proposal, Richard and Pauline say that they would like your advice on
strategies that could help them to repay their home loan as quickly as possible.
• List at least three (3) strategies or methods that will help them achieve their aim.
• Explain how each strategy will result in a home loan being repaid more quickly.
Note to students:You may refer to the MoneySmart website for information on this subject and your
answer may also include, but not be restricted to, available mobile phone apps used for debt management.
(300 words)
Student response to Task 10
Loan repayment is a process in which individual try to clear the liability. Richard and Pauline can use
strategy such as increased repayment with rise of income. They can use investment to repay the debt value.
The changes can also made in lifestyle so that buying power could have been increased. These are the three
different strategies that could have been implemented to repay the total debt amount in a convenient way
possible. These strategies will favor the Richeard and Pauline to flexibly repay the entire loan amount. In
case of long term loan like home loan where the total tenure is approximately 30 years in time flexibility
become very important as a borrower. Igf the proper flexibility is not maintained in the loan repayment than
failures can be faced by the borrower in against to repay the entire loan value (Porzio, Sampagnaro and
Verdoliva, 2020). Other than EMI strategy other strategies like part [ayment on a rtegulatr basis and the full
payment before the loan tenure goes end. These strategies would support the individual to easily manage all
dues against the loan repayment. Flexibility is very important in monthly installment and other expenditure
associated with the individual. Loan repayment needed to be convenient enough especially the loans like
home loan which contain the age of 30 years. These strategies would allow them to flexibly manage all dues.
These strategies would support in restricting loan value in a certain time in process of repaying all dues. The
major emphasis in these strategies over the buying power of the individual when it comes to repaying the
overall dues.
Assessor feedback for Task 10 — Advising on strategies
Need to give 3 strategies on how to pay a loan off quicker than just making normal monthly repayments
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 27 of 54

Task 11 — Impact of credit history
Richard tells you that his former wife failed to properly meet their unsecured personal loan debt
obligations before they separated. Although he eventually repaid the debt, he is afraid that this incident
may count against him when he applies for a loan. There are a few things Richard can do as he is concerned
about his credit rating. What information would you provide in the following situations?
1. Provide Richard with the details of two (2) major credit reporting agencies and explain what information
may be recorded on his credit file. Information can be sourced from the websites of credit reporting
agencies and the Office of the Australian Information Commissioner.(200 words)
Student response to Task 11: Question 1
Credit rating are the score of an individual generate out of the loan repayment. Agencies like Equifax and
Illion are directly involved under the credit rating score. These organizations allow the banks a financial
institution to identify the credit score of an individual. The credit rating agencies analysis the credit score of
the borrower based on the past history of the individual against taking loans. IN the present case Richard re-
payed the loan of his wife. The failure of the wife in repayment of loan will not effect the Riched as the loan
was take by the wife. Also the Richrd helped his wife in repaying the due (Juru, 2019). There will be not any
impact over the credit score of the Rchrd just because it has helped the wife to repay the due installments.
This becomes essential for the individual to repay all installments on time as it affect the credit score but in
case the individual is repaying loan of its relative it will not impact over the credit score of its own.
2. Richard has decided he would like to obtain a copy of his credit report from either Equifax or
illion Data Registries (formerly Dun & Bradstreet). Explain what options are available for the chosen
provider, how long it takes to obtain a copy, and the associated costs. (100 words)
Student response to Task 11: Question 2
Time required for the agencies like Equifax and Illion to provide the copy of credit score is 30 to 45 days.
This time is the maximum expected time needed for these agencies to provide the copy. There is a set
procedure through which an individual can apply in these agencies in order to get the copy of the credit
score.
3. If there are errors on file, what are the options for Richard to follow in order to have these errors
rectified? To assist you with answering this question, refer to the Equifax website. (150 words)
Student response to Task 11: Question 3
In case of any error in the credit score occurred individual can apply over the help center to rectify such an
error. This will take some time to respond the help center. Instructor will help the individual in guiding the
further process to erase such an error (Namvar and et.al.,, 2018). Help center executive will listen to the
person and based on that it give a instant solution of the problem. This will favor the individual in solving
any query and doubt related to the credit score ratings.
Page 28 of 54

4. What obligation does the Privacy Act impose on the Lender to supply the client, in terms of certain
information, if they decline an application due to the content of the credit agency file? (100 words)
Student response to Task 11: Question 4
Information or data protection act is applicable over the financial institutions. They should not be disclose
any personal information of client with anyone. In case of any breach in this legislation the respected bank
and institution will have to bear the legal obligation. Proper compensation will have to bear to the lender in
case of breach of the agreement. Lender must communicate with the borrower that the agency must be
authentic enough to verify all information correctly. Information is very crucial and in case of any
transaction occurred in the banking sector institute carry the responsibility where they can not share the
information of client with any other individual.
5. What alternate options can you suggest to Richard and Pauline in the event that the loan was rejected
by the lender you initially proposed due to a creditreport?(150 words)
Student response to Task 11: Question 5
Richard and Pauline can apply in other institutions and banking organizations for the same loan. This is an
instant option available in front of them in case of loan application get rejected due to the low credit score.
Further they contain an option where they can wait form the few months like two or three to get improve the
credit score. There are other options like taking gold loan to improve the credit score and then to apply back
for the home loan (Kraal, Haritos and Cantley-Smith, 2020). All these are the key options or choices
available for the Richard and Pauline. Under all these strategic choices they will get to address different
requirements associated with the credit score. These options are based on the circumstances of increasing the
credit score of the borrower.
Assessor feedback for Task 11 — Impact of credit history
Q1 Experience does not operate in Australia
Q4 What must a Lender tell the Borrower about which Credit Agency they used
Question(s) that need to be resubmitted (if required) 1 & 4
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 29 of 54

Task 12 — Dispute resolution
1. Due to delays in loan processing, Richard has lodged a complaint with you about the time it’s taking to
get an approval on the loan. Although you’ve explained that this is because of delays with the lenders
processing system due to staff shortages, you’re concerned the matter may escalate beyond your
control.
(a) You are now required to record Richard’s feedback by completing the Customer Complaint Report
below.
Student response to Task 12: Question 1a
Customer Complaint Report
Customer name Richard
Title (Mr, Mrs, etc.) Family Name (surname) Given names
Mr Jackson Pauline Jackson
Service being provided to client
Home Loan
Nature of complaint
Delay in Loan Processing.
(b) Provide a response to Richard explaining the process going forward and what actions you will take
regarding his complaint in the box below.
Student response to Task 12: Question 1b
Delay in lending process system due to shortage of staff , transfer of documentation, checking of all
documents of both the partners and weak financial statement may create some delay in processing.
(c) Refer to the ‘Example of an Organisations Policies and Procedures’ document in the toolbox.
Produce a short report which identifies and recommends ways that you may be able to
improvethese Policies and Procedures, to keep clients like Richard up to date on the progress of
the loan application in the box below:
Student response to Task 12: Question 1c
Technology can be used to update the file procedure of period that can be tracked through app or company
portal. Time taken by bank should be clear to customer that are taken by company. The credit report of
customer should be clear that can is providing to customer. Different policies should be made for urgent files
where customer wants urgent credit from bank. The income source are verified, insurance of customers and
inspection of their history and background.
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2. As a broker it is important to understand the role of the Financial Ombudsman. Explain the function and
role of the Australian Financial Complaints Authority (AFCA) in the External Dispute Resolution (EDR)
process and the options available to the claimant once a determination is made. (200 words)
Student response to Task 12: Question 2
Financial ombudsman is a service of ombudsman in united Nation. They work as a resolution that's fair and
impartial. It is free and easy to use service that settle complaint between the business and customers that
provide financial service. They have the power to put thing right according to fair and impartially. The role
of Australian financial complaint authority in external dispute resolution that they work as an independent
and impartial. They bring the appropriate outcome when decision is unable to make. They provide
compensation of loss suffer due to firm's error of inappropriate conduct of activity. They not impose fine to
those companies or charge with mistake. The option that is available to the claimant after the determination
is made is that claimant can either cover it's all losses by the company on their behalf or compensation is
being provided to claimant. If the loss is huge or their impact is high they also claim company to take resign
from responsible person.
3. What could be the maximum financial compensation limit amount payable to a consumer borrower
through AFCA for a claim for direct financial loss?(10 words)
Note:This may require some internet research.
Student response to Task 12: Question 3
Maximum limit is $500,000 directly or indirectly.
Assessor feedback for Task 12 — Dispute resolution
Q3 This amount changed in January 2021
Question(s) that need to be resubmitted (if required) 3
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 31 of 54

Section 3: Case study 3— Mary Jane Smith
Task 13 —Prepareand check a loan application
Mary Jane Smith: Client Background
Mary Jane Smith is a young professional, excelling in her career within the IT industry. She has saved hard
and is ready to purchase a property of her own.
Her objective is to pay the loan down quickly and then use the equity in the property to purchase another.
She would like to build a small property portfolio over the next eight to 12 years.
You have met with her a few times and exchanged several emails and telephone calls. She has
complimentedyou on a few occasions for the service and guidance you have provided so far.
Mary has been cautious in finding and then negotiating the purchase of this property. It is now time to get
an application to a lender. You have gathered appropriate documents and completed all necessary checks.
Everything is looking positive to proceed.
1. Using the details in the Example Fact Find for Mary Jane Smith in the Toolbox, prepare a loan application
by completing Appendix 3 in this written Project .
2. Using the following list, select which basic items below will need to be gathered from Mary as the
supporting documentation necessary for her loan application:
Personal details
☐ Birth certificate or driver’s license
☐ Passport or Birth certificate
☐ Bank debit card ☐ Medicare card ☐ Utility/Phone bill
☐ Last six months savings account statements
☐ Last three months credit card statements
Proof of income
☐ Three current pay slips
☐ Signed letter from employer on letterhead (must have ABN)
☐ Latest year’spersonal tax return and tax assessment notice
☐ If self-employed — last two-year financial tax return and assessment notices
☐ If self-employed and no financials — three of the following four:
☐ Last 12 months BAS returns
☐ Original signed letter from accountant detailing net income, and how it was ascertained
☐ Last six months business bank statements
☐ Last 12 months ATO tax portal statements from the ATO
☐ For rental properties — copy of last three months lease statements, copy of agreement or letter from
realestate agent
Refinance
☐ Last six months loan statement
Page 32 of 54

Property purchase
☐ Copy of contract/offer including title details
Construction
☐ Council approved plans and specifications
☐ Building contract
☐ Quotes for additional work
3. Before submitting Mary’s loan application, you must check her details thoroughly to ensure accuracy.
Using the following two items available in the toolbox,check that the personal details and current
employment details section of Mary’s Fact Find document and loan application are accurate and identify
three (3) errors. Write your answer in the box below.
• example driver’s license
• example pay slip.
Student response to Task 13: Question 3
The Three different errors which are passport, Bank debit card and Medicare card. Driver license is a
document that permitted a person to drive the motor car on public places. Pay slip is basically the note that is
given to employee by employer when they have been paid, detailing the amount of given payment with tax
deduction and insurance deduction.
4. Referto the ‘Example of an Organisations Policies and Procedures’document in the toolbox and provide
at least two (2) examples in each question of how Mary’s loan application complies with each of the
below:
(a) The organisationalcredit policy.
Student response to Task 13: Question 4(a)
The current pay slip of Mary and credit card statement.
(b) Legislative requirements (particularly NCCP).
Student response to Task 13: Question 4(b)
Rental properties of Marry and Last 12 months ATO tax portal statements from the ATO shows the
legislative requirement.
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(c) Industry Code of Practice.
Student response to Task 13: Question 4(c)
Council approved plans and specifications and Copy of contract/offer including title details.
Assessor feedback for Task 13 — Prepare and check a loan application
Q4a how does application comply with the credit policy
4b how does loan satisfy requirements of NCCP
Q4c – need to address how complies with Banking Code of practice
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 34 of 54

Section 4: Working in financial services
Task 14— Financial services legislation and industry codes
of practice
1. Conduct some research and identify two (2) websites that you could use to keep up to date with
legislative changes and two (2) websites for changes in Industry codes of practice. (50 words)
Student response to Task 14: Question 1
SLP Amendment -information bullet and Alert for individual Act or Regulation are the two main website to
keep updated with legislative changes.
For industry code of practice BBC and Economic Times should be prefered.
2. Describe the key features of:
(a) The National Consumer Credit Protection Act 2009.(150 words)
Student response to Task 14: Question 2(a)
The key feature of The National Consumer Credit Protection Act 2009 is to protect the consumers and
ensure the ethical and professional standards are maintained by financial industry. They work for the
consumers to protect the interest from company fraud or any mislead activities that are conducted in a form
of financially are governed under the National consumer Credit protection act 2009. It allows ethical
working between lenders and brokers that must hold credit lenience or registered under authorized credit
Representative. The rules and regulation is implied on both parties that must be followed to protect the
consumers from fraud and misleading by brokers. The charges are made on provision of credit which is
provided by creditor for business purpose in a ethical manner and no unethical activities are being conducted
by any of them.
(b) The Privacy Act.
Student response to Task 14: Question 2(b)
The privacy act is a principle piece of Australian legislation which is working for protecting the handling of
personal information and storing of data securely. This include the collection of data, usage of data and
disclose of personal information in public federal and private sector.
(c) Code of Practice.
Student response to Task 14 Question 2(c)
The main function are complying with all laws in country, maintain correct and relevant standards, arranging
appropriate finance support for people etc.
Page 35 of 54

3. How would you communicate any changes in legislation or codes of practice to colleagues?(100 words)
Student response to Task 14: Question 3
The communicate with colleagues for the change in legislation or code of practice can be done through
messaging app, personal groups chat, through emails or physical communication by face to face. The most
appropriate way is to communicate with face to face for understand better information and opinion of other
person. Better understanding and more effective communication need to be done at a time of face to face
conversation.
4. An Australian Credit Licencee must maintain statutory records; such as financial records,
membership certificates, insurance policies, training and risk assessment registers.
Explain how these could be managed to ensure they are secure and available for easy retrieval when
updating is required.(50 words)
Student response to Task 14: Question 4
These are very crucial and personal information of individual that need to keep secret from others. This can
be done through protecting this information in a safe portal where only top authority or authorize person can
access the information for business use only and not personal use.
Assessor feedback for Task 14 — Financial services legislation and industry codes of practice
Q1 What Australian organisation websites will assist
Question(s) that need to be resubmitted (if required) 1
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 36 of 54

Task 15 —Design and produce a document
You have recently joined YS Finance, a small broking business. Your employer has asked you to design
a personalised ‘CPD Register’ where you will record any training and personal development that you
undertake in your role as a mortgage broker.
Using the organisational requirements from the ‘YS Finance Personalised CPD Register checklist’ in the
toolbox, you will need to create a CPD Register in a new word document.
Your CPD Register should include a table with the following column headings:
• date
• activity
• duration
• content
• method
• location
• CPD points allocated.
Once you have created your CPD Register, you will need to do the following:
1. Save a copy of the CPD Register to your desktop.
2. Print the document.
3. Take a clear photo of the document and a screen snipping of the document from your screen.
To do this you will need to use the Snipping Tool on your device and a camera.
4. Insert a copy of the photo and the screen snipping into the box below.
Remember to do the following:
• Proofread your CPD Register prior to printing, to ensure there are no spelling errors.
• Adhere to all of the organisational requirements outlined in the ‘YS Finance Personalised CPD Register
checklist’.
Student response to Task 15
Date Activity Duration Content Method Location CPD points
15 March,
2021
Communicat
ion skill
4 Weeks Communicat
ion skill will
support to
perform
better
operation
Active
listening
ability.
Observation.
Australia 4
21
March,2021
Presentation
skill
6 weeks Observation,
creative,
writing,
decision
making
practices
(Huijsmans
and et.al.,
2019).
Presentation
model. Australia 5
26 March,
2021.
Management
ability
6 weeks Critical
lerning,
decision
Management
model. Australia 5
Page 37 of 54

making,
meditation
and other
such
activities.
Assessor feedback for Task 15 — Design a produce a document
Task asks you to create a template and to follow
Your CPD Register should include a table with the following column headings:
• date
• activity
• duration
• content
• method
• location
• CPD points allocated.
Once you have created your CPD Register, you will need to do the following:
1. Save a copy of the CPD Register to your desktop.
2. Print the document.
3. Take a clear photo of the document and a screen snipping of the document from your screen.
To do this you will need to use the Snipping Tool on your device and a camera.
4. Insert a copy of the photo and the screen snipping into the box below
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 38 of 54

Task 16 — Applying principles of professional practice to work
in the financial services industry
As a mortgage broker, you are required to complete 20 points per annum of Continuous Professional
Development (CPD). This task requires you to identify and evaluate appropriate professional development
(PD) opportunities available to you in the industry. In this task, you will need to visit the Education and
Events page on the Mortgage and Finance Association of Australia (MFAA)
website:<https://www.mfaa.com.au/education-events/courses>.
Identify two (2) professional development events that you would like to attend after your studies and
complete the table below.
Note:You can list events that are available online.
Student response to Task 16
Course Name Describe what the
event is about
Why have you
selected this event?
How will this event
help you to develop
professionally in
industry?
As a non-member, what
is the fee associated
with participating in this
event?
What is the
CPD value?
MFAA Initial
compliance
park.
This course is
about to assist
the brokers of
finance in
understand
about the
legislation.
This event is
enrolled by any
individual
interested in
brokering
(Sinha,
Sawaliya and
Sinha, 2020).
This event will
allow to gain an
idea about all key
legislation.
$ 73000 to $84000 18
MFAA
Experience and
skill education
This is about the
loan writing
experience.
This course will
allow the
complete
knowledge and
guidance about
the brokerage
business.
This will favor to
get professional
and practice
knowledge about
the sector (Ngoc
Bich and et.al.,
2019).
$ 70000 to $80000 19
Assessor feedback for Task 16 — Applying principles of professional practice to work in the
financial services industry
good
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Demonstrated
Resubmission (if required) Not applicable
Page 39 of 54

Appendix 1: Key terms
1. In your own words, and using the grid below; define and explain loan transaction terminology and
definitions of the following:
Lender and
borrower
Philip and Jennifer Brown
Lessor and lessee
Mortgagee and
mortgagor
2. In your own words, and using the grid below; explain what the different documentation required by a
lender is:
Credit check
authority signed
Equifax, Check you credit and Experian.
Guarantees Glen Brown
Loan contract 0 year term
• premium option home loanfeatures
• variableinterestrate(forthiscaseuse4.5 p.a.)
• LMI to becapitalised
• proposedsettlementdate—sixweeksfromexchangeofcontracts
• abilitytomakeadditionalpaymentsfromtimetotimewithout penalty
• fortnightly repaymentoption
• redrawfacility
• funds access viacard.
Note: Loan application fee is waived under Special Offer.
Periodical
payment
authority
Philip and Jennifer
Signed
application form
Page 40 of 54

3. In your own words, and using the grid below; describe:
The negotiation
process
Negotiation for applicable will be waived under the specia loffer.Higher authority of
bank will take a callover negotiation.
Page 41 of 54

Appendix 2: Client information collection tool/Fact finder
Appointment date:10/2/2021
Appointment time: 1pm
Applicant 1 Applicant 2
Surname Brown Brown
Other names Philip Jenifer
Contact details Address Unit 12, 22 Wentworth Lane,
Highville
Unit 12, 22 Wentworth Lane,
Highville
Phone (W)
Phone (H) 9123 2121 9123 2121
Mobile [phone] 880 088
Email [e-mail] [e-mail]
Employment Team Leader Accountant
How long? 16 years 15 years
Previous employer (if less than two years) NA NA
How long? NA NA
Employment type
(FT/PT/Casual/Self-employed) FT FT
Gross income (p.a.) $58,000 $95,000
Number of dependants 0 0
Motor vehicles $15,000 $15,000
Loan purpose Over come existing debt
Purchase price/Valuation Na
Deposit on property NA
Loan amount $300,000
Borrowing capacity (using Genworth
serviceability calculation) $300,000
Page 42 of 54

Assets and liabilities
Assets Liabilities
Details Market value Details Monthly payments Amount owing
Owner Occupied Property at: Unit 12, 22
Wentworth
Lane, Highville
Mortgage with: Answer here Answer here
Investment Property at: Answer here Mortgage with: Answer here Answer here
Cash at bank
(includes fixed deposits) Answer here Car leasing Answer here Answer here
Other cash
(includes offset accounts) Answer here Personal loans
1.
2.
$1,567.00
$240.00
$90.00
$370.00
$850.00
270,000
$8,000)
$3,800
$3,400
$15,000
Deposit paid on property (only if
paid) Answer here Overdraft Answer here Answer here
Motor vehicles:
1.
2.
$15,000
$25,000
Other loans:
1.
2.
Answer here Answer here
Personal effects Answer here Credit card limit:
Answer here
Answer here Answer here
Business value (if self-employed) Answer here Credit card limit:
3% per month
Answer here Answer here
Shares and investments Answer here Other: Answer here Answer here
Superannuation $75,000 Other: Answer here Answer here
Other assets (give details) $75,700 Other: Answer here Answer here
Total assets $680,700 Total liabilities $2,267 $285,000
Surplus/deficiency: (Total assets less Total liabilities) $395,700
Page 43 of 54

CURRENT MONTHLY LIVING EXPENSES (Provide a breakdown of the total amount listed in the case study — use your discretion)
Food/housekeeping $1,000
Insurance (e.g. motor vehicles, home contents/ building, medical, life/income protection) $500
Utilities (e.g. rates, gas, electricity, transport) $300
Transport (e.g. public transport, petrol, registration, repairs) $400
Education (e.g. school, college, university) $0
Dependents support(e.g. childcare, child maintenance) $0
Entertainment (include online subscriptions, e.g. Netflix/Stan) $100
Other (detail below): $450
MONTHLY LIVING EXPENSES $2,750
Page 44 of 54

Needs analysis
1 Name of your current lender? First and Last Bank
2 What type of mortgage loan do you have? Home loan and credit card
3 Why did you choose this particular loan and lender? Affordable interest rate and repayment
4 What is the interest rate? 5.70%
5 What are your payments? Amount $1,567
6 Frequency Monthly
7 Do you know the fees and charges? Yes
8 What is your proposed purpose for the loan you are applying for? Overcome debt
9 Branch access available with current lender Yes
10 Internet banking available with current lender Yes
11 Phone banking available with current lender Yes
12 Lenders not to be considered Yes
13 Type of loan sought Home Loan
14 Preferred Interest rate range 4% to 7%
15 Payment frequency Monthly
16 Redraw NA
17 Offset NA
18 Salary crediting NA
19 Low fees and charges $7,800
Notes
NB:Providing substantive notes here is a compulsory part of your assessment.
Total due value, interest charge, repayment and all aspects of the loan is clear to the borrower. All terms has
been clarified related to loan.
Page 45 of 54

Anticipated fees and charges
Anticipated purchase price $490,000
Deposit on property $75,000
Loan amount $440,000
LVR 89%
Purchase costs
Stamp duty on transfer (include transfer fee) $17,600
Solicitor/conveyancer (estimate) $1,500
Rates and land taxes (estimate) $24,200
Pest inspection (estimate) $500
Building Inspection (estimate) $800
Borrowing costs
Application/establishment fee $500
Valuation fee $225
Security admin fee $340
LMI $6,424
Registration of mortgage $143
Release of mortgage Na
Search fees Na
Other Na
Total purchase and borrowing costs $491,832
Page 46 of 54

Funds to complete
PURCHASE AND LOAN COSTS: AVAILABLE FUNDS:
Purchase price: $490,000 Deposit if paid $75,000
Lender application/valuation fees: $225 Cash savings: Na
Transfer stamp duty/transfer fee $17,600 Sale proceeds: $490,000
Government registration fees Na Gift: Na
Solicitors fees: $1,500 FHOG: Na
Other Na Other: Na
Lenders Mortgage Insurance
Added to Loan Yes / No Na Other: Na
TOTAL COSTS (A): $509,325 TOTAL OWN FUNDS (D): $75,000
LOAN AMOUNT REQUESTED (B): $415,000 OWN FUNDS REQUIRED (A–B) = C: $94,325
OWN FUNDS REQUIRED (A–B) = C $94,325 SURPLUS/SHORTFALL (D–C) $- 19,325
Page 47 of 54

Loan interview diary
Name(s) of client(s) present at interview
Philip Brown
Jennifer Brown
Date of interview
11/3/2021
Location of interview
Unit 12, 22 Wentworth Lane, Highville
Indicate all clients who were interviewed in person
Philip Brown
Jennifer Brown
Do all of the clients appear to clearly understand English? Y/N
If not, have the services of an interpreter been recommended? Y/N
Do all of the clients clearly benefit from taking out this loan? Y/N
If not, what inquiries have been made to ascertain the level of benefit to each party of the loan?
All benefits to client and customer against the purchase of property against the loan amount
clearly stated to the customer.
All terms and condition of loan are clearly described in loan agreements.
Client and bank are agreed over
the agreements and condition.
Are any clients acting as though they are under duress or other disability? Y/N
Are any clients acting as though they are unsure of anything about the loan? Y/N
Are any of the clients acting as though they are unable to comprehend their obligations? Y/N
Are there any guarantors? Y/N
Page 48 of 54

If yes is answered to any of the above questions, have the clients been advised to seek
the services of a lawyer or financial adviser? Y/N
Provide details of other pertinent information obtained during the loan interview which may be of interest
or of any unusual circumstances you may wish to record.
NA
Page 49 of 54

Appendix 3: Loan application
Cover sheet
Applicant name Philip and Jennifer Brown
Broker name Adele Baaini
Contact phone/Mobile [phone]
Email address [e-mail]
Solicitor/conveyancer details
Name Jones and Co
Address 22 High Street, City East NSW
Contact phone/Mobile [phone]
Email address jonesandco.net.au
Loan summary
Loan amount $415,000
Loan term 30 years
Variable or Fixed rate Variable
Principal and Interest or Interest only Principal and interest
Broker notes and recommendation
As per previously discussed
Page 50 of 54

Loan application details
Applicant 1 Applicant 2
Personal details
Surname Jackson Jackson
Other names Richard Pauline
Date of Birth 21/2/1987 8/10/1988
Marital Status Married Married
Number of Dependents 0 0
Contact details Current address Unit 12, 22 Wentworth Lane, Highville,
NSW
Unit 12, 22 Wentworth
Lane, Highville, NSW
Time at address 9 years 9 years
Phone (W)
Phone (H) 9123 2121 9123 2121
Mobile [phone] 880 088
Email [e-mail] [e-mail]
Previous Address (if less than 2 years)
Current employment details
Employer and contact details ACE Limited 101 City Rd, Westside Tech city 804 High Street,
City East
Job Title Team Leader Accountant
Employment type
(FT/PT/Casual/Self-employed) FT FT
How long? 16 years 15 years
Previous employer (if less than two years)
How long?
Employment type
(FT/PT/Casual/Self-employed)
Page 51 of 54