This task requires the student to define and explain loan transaction terminology and match document names with their definitions. The task aims to test the student's understanding of the common terms and document names used in the finance and mortgage broking industry.
Written Project
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Result summary(assessor to complete) Section 1: Industry knowledgeFirst submissionResubmission (if required) Task 1 — Key termsNot yet demonstratedNot applicable Task 2 — The Australian financial marketNot yet demonstratedNot applicable Task 3 — Financial services legislation and industry codes of practiceNot yet demonstratedNot applicable Task 4 — Products and servicesNot yet demonstratedNot applicable Section 2: Business skills Task 5 — Effective communicationNot yet demonstratedNot applicable Task 6 — Professional developmentNot yet demonstratedNot applicable Task 7 — Customer serviceNot yet demonstratedNot applicable Task 8 — Respond and report on complaintsNot yet demonstratedNot applicable Task 9 — Prospecting for new clientsNot yet demonstratedNot applicable Task 10 — Professional networksNot yet demonstratedNot applicable Task 11 — Managing informationNot yet demonstratedNot applicable Section 3: The lending process Task 12 — Understanding the client’s needsNot yet demonstratedNot applicable Task 13 — Developing and presenting solutionsNot yet demonstratedNot applicable Task 14 — Packaging the application to send to the lenderNot yet demonstratedNot applicable Task 15 — Monitor the lending processNot yet demonstratedNot applicable Section 4: Case Studies Task 16 — Case study: Purchasing an owner-occupied homeNot yet demonstratedNot applicable Task 17 — Completing the Fact findNot yet demonstratedNot applicable Task 18 — Assessing the clients’ situationNot yet demonstratedNot applicable Task 19 — Presenting borrowing options and potential benefitsNot yet demonstratedNot applicable Task 20 — Supporting the client to settlementNot yet demonstratedNot applicable Task 21 — Case study: Refinancing a home loanNot yet demonstratedNot applicable Task 22 — Preparing a Preliminary AssessmentNot yet demonstratedNot applicable Task 23 — Case study: Purchasing an investment propertyNot yet demonstratedNot applicable Task 24 — Preparing a loan proposalNot yet demonstratedNot applicable Task 25 — Loan contracts and security documentationNot yet demonstratedNot applicable Task 26 — Preparing the loan for settlementNot yet demonstratedNot applicable Please note:To pass this written project, you will need to be assessed as DEMONSTRATED in either your firstsubmission oryour resubmission in all tasks above. 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. Document classification: ConfidentialPage5of128
Before you begin Read everything in this document before you start your written project forCertificate IV in Finance and Mortgage Broking(CFMB_v1). Document classification: ConfidentialPage6of128
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: Working in financial services A case study with a series of short-answer questions: –Task 1 — Key terms –Task 2 — Establishing a level of financial knowledge –Task 3 — Financial services legislation and industry codes of practice –Task 4 — Products and services. •Section 2: Business skills –Task 5 — Effective communication –Task 6 — Professional development –Task 7 — Customer service –Task 8 — Respond and report on complaints –Task 9 — Prospecting for new clients –Task 10 — Professional networks –Task 11 — Managing information. •Section 3: The lending process A case study with a series of short-answer questions: –Task 12 — Understanding the client’s needs –Task 13 — Developing and presenting solutions –Task 14 — Packaging the application to send to the lender –Task 15 — Monitor the lending process. •Section 4: Case studies –Task 16 —Case study — Purchasing an owner-occupied home –Task 17 —Completingthe Fact find –Task 18 —Assessingthe clients’ situation –Task 19 — Presenting borrowing options and potential benefits –Task 20 — Supporting the client to settlement –Task 21 — Case study – Refinancing a home loan –Task 22 —Preparinga preliminary assessment –Task 23 — Case study – Purchasing an investment property –Task 24 — Preparing a loan proposal –Task 25 — Loan contracts and security documentation –Task 26 — Preparing the loan for settlement. Document classification: ConfidentialPage7of128
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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 thewritten project within your enrolment period. Your study plan is in the KapLearn CertificateIV in Financeand Mortgage Broking(CFMBv1) subjectroom. Document classification: ConfidentialPage8of128
Instructions for completing and submitting the writtenproject Document classification: ConfidentialPage9of128
Completing the written project Document classification: ConfidentialPage10of128
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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 projects. •Name your file as follows: Studentnumber_SubjectCode_Project_versionnumber_Submissionnumber (e.g. 12345678_CFMB_AS_v1A1_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 isclear and unambiguous. Document classification: ConfidentialPage11of128
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. Document classification: ConfidentialPage12of128
Additional research When completing the ‘Client information collection tools’, assumptions are permitted although they mustnotbe in conflict with the information provided in the Case Studies. All assumptions must be noted. You may be required to conduct your own research in addition to the topic notes provided to source information to answer some of the project questions. You may also be required to source additional information from other organisations within the finance industry to find the products or services to meet your client’s requirements, to source indicative interest rates and to calculate any fees and charges that may be applicable. Document classification: ConfidentialPage13of128
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Submitting the written project Only Microsoft Office compatible written projects submitted in the template file will be accepted for marking by Kaplan Professional Education. You need to saveand 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 becompletedbefore submitting it to Kaplan Professional Education. Incompletewritten projects will be returned to you unmarked. The written project must be submitted together with the oral project. If you do not submit both completed projects at the onetime it will be returned to you unmarked. The maximum file size is 20MB for the written and oral project. Once you submit your writtenproject for marking you will be unable tomake any further changes to it. Once you submit your written project for marking you will be unable tomake any further changes to it. You are able to submit both projects earlier than the deadline if you are confident you have completed all parts and have prepared a quality submission. Please refer to theProject submission/resubmission videosin the Assessment section of KapLearn under your ‘Project Enrolment’ for details on how to submit/resubmit your written project. YourWritten Project and Oral Projectmust be submitted together on or before your due date. Please check KapLearn for the due date. Document classification: ConfidentialPage14of128
The written project marking process You have 26 weeks from the date of your enrolment in this subject to submit your completedproject. 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 theCertificateIVin Financeand Mortgage Broking (CFMBv1)subject room inKapLearn under the ‘Assessment’ tab. Document classification: ConfidentialPage15of128
Make a reasonable attempt You must demonstrate that you have made a reasonable attempt to answer all of the questions in yourwritten 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 yourcompletedwritten and oral project. Document classification: ConfidentialPage16of128
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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 ofcompetency 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 requiredlevel. 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. Yourassessor 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 Kaplanassessor. Units of competency This written project is your opportunity to demonstrate your competency against these units: BSBPEF501Manage personal and professional development FNSCUS511Develop and maintain professional relationships in financial services industry FNSFMB411Prepare loan applications on behalf of clients FNSFMB412Identify client needs and present broking options FNSFMK515Comply with financial services regulation and industry codes of practice FNSINC411Conduct work according to professional practices in the financial services industry FNSINC412Apply and maintain knowledge of financial products and services FNSSAM411Sell financial products and services FNSFMB511Implement credit contracts in preparation for settlement FNSSAM403Prospect for new clients BSBOPS304Deliver and monitor a service to customers BSBOPS404Implement customer service strategies Note that thewritten and oral projectis one of two assessments required to meet the requirements of the units of competency. Document classification: ConfidentialPage17of128
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. Document classification: ConfidentialPage18of128
Project tasks(student to complete) Please note:Throughout the project, you are to assume that you are a finance and mortgage broker. Ifyou are not currently in a finance and mortgage broker role, your answers are to reflect what you would do if you were working in the finance and mortgage broking industry. You can also draw on your current and past work experiences and refer to the topic notes. You may also need to conduct your own research and consult with people who currently work within the finance and mortgage broking industry. Document classification: ConfidentialPage19of128
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Task 1 — Key terms Working in the finance industry requires you to have an understanding of the terminology used and the names of documentation that you will deal with. Demonstrate your understanding of some of the common terms and document names by completing the following tables: 1.In your own words, complete the table below; define and explain loan transaction terminology and definitions of the following: Lender and borrowerLender is a person that lend the money or borrow the finance from the borrower.. On the other hand borrower is the person borrow money from the entities provide loans and borrowing to the person in need. Both the stakeholders are inter related to each other. Lessor and lesseeLessor is the individual or an organization provide funds against the lease agreement. Lessee is the one borrow funds from the lessor. Mortgagee and mortgagorMortgagor is the one who lend the money and mortgagee is the one who borrow the money. 2.In your own words, complete the table below; define and explain the documentation used by lenders: Credit check signed authorityCredit check signed authority is the authorized organization and institution that look into the credit matter of the person seeking for the loan. The authority sign the credit ratting of the person asking for the borrowing. GuaranteeGuarantee is the legal assurance granted to the lender on behalf of the borrower against the borrowing. The guarantee is about to assure the lender that the money will be returned and the person taking a loan will surely pay the money borrowed. Loan contractLoan contract is the agreement of the contract is made between lender and borrower. Periodical payment authority Periodically payment authority is the authority to make a periodic payment against the borrowing is done. This is about to make repayment on a periodic basis. Signed application form Signed application form is a document that is completely signed. Every loan agreement must be signed by the borrower and the lender as this is a legal agreement between the parties. Document classification: ConfidentialPage21of128
3.In your own words, complete the table below; describe: The negotiation processNegotiation process is conducted before the loan agreement is made. This is about to identify the middle ground on which the loan can be granted. Further at the time borrower find it difficult and not being able to repay the loan negotiation is made. Customer Relationship Management (CRM) tool CRM is an application that is used by the banker. This is an online application that involve registering the interested customers or the people in taking loan from the lender. Certificate of CurrencyCertificate of currency is a current policy in place as of the date of issue. Assessor feedback for Task 1 — Key terms (Insert feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage22of128
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Task 2―The Australian financial market The state of the economy and financial markets affects elements of lending, such as interest rates; and also has an impact on consumers’ attitudes to borrowing and debt. The Reserve Bank of Australia (RBA) is Australia’s central bank and is responsible for monetary policy, financial and payment system policies, and other financial matters. Task 2: Question 1 Research the RBA website and answer the following questions: (a)List the three (3) statutory objectives (key elements) the RBA sets out to achieve.(20 words) Hint/Tip: There is a link to the website in the Toolbox. Watch the Monetary Policy Framework video on the RBA website:<www.rba.gov.au/monetary- policy>. Student response to Task 2: Question 1(a) Stability of currency Maintenance of full employment Ensuring the welfare of people. (b)The RBA meet on the first Tuesday of each month to review the cash rate. Name three (3) things relevant to a mortgage broker’s role upon which the cash rate impacts. (25 words) Student response to Task 2: Question 1(b) Economy, lender pipeline and property location. Assessor feedback for Task 2 — The Australian Financial Market (Insert feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage23of128
Task 3 — Financial services legislation and industry codes ofpractice Task 3: Question 1 Conduct some research to identify websites that you could use to keep up to date with regulatory changes and changes in codes of practice in the mortgage broking industry. Complete the table below with the following information: •Two (2) Regulations/Legislations and two (2) codes of practice with which you must keep up to date. •For both, provide the website name and URL address, and explain how these websites are helpful for keeping up to date with changes. (40words) Student response to Task 3: Question 1 Regulation/ Legislation name Website URL AddressExplain how this website is helpful to keep up to date with changes 1.Regulatory guide 273 www.accc.gov.auThis website is helpful for the borrower to get all the updates over the regulatory guide 273. 2.Consumer credit protection act www.aph.gov.auThis is supportive for the borrower to get all insight over consumer credit protection act. Code NameWebsite URL AddressExplain how this website is helpful to keep up to date with changes 1.273www.accc.gov.auThis website will certainly allow all the insight over the amendments. 2.1968www.aph.gov.auThe website will support the borrower to know all the updates. Document classification: ConfidentialPage24of128
Task 3: Question 2 List two (2)risks and the consequences that areassociated withnotcomplying with the NCCP Act. (30 words) Student response to Task 3: Question 2 Legal license may ban by the authority. Charges may also imposed on the basis of the seriousness of the fact not being complying with the act. Imprisonment is also permissible in case the judge find it necessary. Task 3: Question 3 In your own words, describe the key features of thePrivacy Act 1988. (30 words) Student response to Task 3: Question 3 The privacy act 1988 involve collecting, use, storage and disclosure of personal information in the federal public sector and private sector. This is about to protect the personal information by disclosing into public domain. Document classification: ConfidentialPage25of128
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Task 3: Question 4 (a)In your own words, describe the key features and the purpose of codes of practice. (b)Provide one (1) example of how a code of practice would be implemented into a work situation for a mortgage broker. (50 words) Student response to Task 3 Question 4 (a)Code of practice guide with the professional standards and code of conducts to maintain. This involve the proper standards need to maintain based on the legal requirements. (b)For example mortgage broker must not disclose the personal information of the client without the consent of the customer. Document classification: ConfidentialPage26of128
Task 3: Question 5 (a)In your own words describe best interests duty. (b)Provide one (1) example of how the best interests duty would be implemented into a work situation for a mortgage broker. (50 words) Student response to Task 3: Question 5 (a)Best interest duty is a legislative requirement to ensure the processes and motivation of financial advisor are focused on what is best for the client. (b)For example mortgage broker can implement one single interest duty on the basis of its target customers. This would involve the affordability of the client in against the loan is taken. Task 3: Question 6 (a)How would you communicate changes in regulation, legislation, or codes of practice to your colleagues? (b)Explain how you would execute changes to your organisation’s policy, procedures and practices to ensure that you are meeting the changes (for example, the introduction of best interests duty). (80words) Student response to Task 3: Question 6 (a)Communication can be done over phone calls, email and other form of communication. Template can also be printed to provide the information. This would allow the colleagues to interact about all the changes. Messenger tool can also be used by forming a group to communicate about all the changes. (b)Changes in the organisation policy can be implemented with the proper research about the market and the target customers. This involves identifying the need and affordability of customer and make changes accordingly. Task 3: Question 7 If you were unsure of how to apply any regulation, legislation or codes of practice to your role or interaction with a client, explain what you would do. (30 words) Student response to Task 3: Question 7 In case any misunderstanding about the information whole interacting with the client than professional can verify the information before communicating with the customer. This would resist the professional to misled client. Task 3: Question 8 Remaining compliant with financial services regulation and industry codes of practice is vital. One way to make sure compliance is being met is through monitoring or internal audits. You have been asked by your manager to implement an internal monitoring/audit process for your Document classification: ConfidentialPage27of128
mortgage broking firm to ensure that the credit representatives are meeting their obligations with regulation, legislation and codes of practice. Outline the monitoring/audit process that you have implemented to ensure compliance. You should include the following: •How you will monitor/audit compliance. •Who will undertake the monitoring/audit process. •What tools you will use. •How or where you will record the outcomes. (150 words) Student response to Task 3: Question 8 Audit compliance can be monitored with the proper verification of the information. Evaluation activities can planned at an individual level. Periodic basis of evaluation can be done to monitor the whole process. The individual can set its own performance standards and on the basis of the standards that are set performance evaluation can be conducted. Monitoring audit process is totally based on the self evaluation so the auditor itself can design and plan the activity to monitor and review the performance. Tools like software, format and such other tools can be used, The separate document will be maintained to record the documents. This will involve recording all the progress and success that is achieved in against to the monitoring process is implemented. Personal evaluation will completely support the auditor to ensure the authenticity of the whole practice is performed. This would allow the auditor to record and verify the information in the separate document. Task 3: Question 9 What information provided by a client needs to be retained by a financial services organisation, like a brokerage?(50 words) Student response to Task 3: Question 9 Information of a client such as personal information that involve name, address and such other. Income related information that involve the salary or the tax return. Bank statement is also necessary to retain by the financial institutions as it is important to assess that borrower will be able to repay the funds. Assessor feedback for Task 3 — Financial services legislation and industry codes of practice (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired) Document classification: ConfidentialPage28of128
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Task 4 — Products and services The financial services industry is very competitive, with many organisations offering a number of different lending and transactional products and services. Organisations use a variety of approaches to market and promote their products and services. It is very important that brokers are able to determine the right product and service to meet the needs and requirements of their clients. Some clients like to be able to combine their lending products with other banking products and services. While it is important to have a thorough knowledge of lending products, it is also important to be able to identify other relevant products and services to accommodate your client’s needs and requirements. Task 4: Question 1 Using the information in the topic notes in conjunction with your own research, complete the product knowledge table below. Student response to Task 4: Question 1 1. Variable rate home loan — package 2. Fixed rate home loan 3. Interest only home loan Financial institution and name of product This rate is not fixed and hence variable in nature. The rate of interest will remain unchanged through the course of the loan. Interest only loan is a loan in which borrower only get to pay the interest hence the principle value remain unchanged. Product characteristics (features) (Minimum of three (3)) 1.Rate of interest is not fixed. 2.Security need to deposit. 3. The tenure of loan is fixed. 1. Rate of interest is fixed. 2. Security is required. 3. Tenure is also fixed. 1. Interest rate may be fixed or variable. 2. Security is required against the loan. 3. Tenure is fixed. Product purpose (What would a client use this for?) The purpose of the product is to cope up with the current trend related to interest. The product purpose is to change rate of interest on the basis of the market fluctuation. The purpose is to keep the interest rate fixed hence customer get a clear overview about the repayment of loan. The purpose is to provide more feasibility to the customer in against to repay the loan value. Applicable fees and chargesFees like processing fees and insurance charges are applicable. Processing fees and insurances charges are applicable. Processing fees and insurances charges are applicable. Terms and conditions of this product (Minimum of three (3)) 1.Interest rate will not be same. 2. Amount of instalment will be fixed. 1.Interest rate will be fixed till the end of the tenure. 2.Instalment value 1.Rate of interest may be fixed or variable. 2.Instalment will contain only the Document classification: ConfidentialPage29of128
3. Tenure will fixwill remain fixed. 3.Tenure is also fixed. interest amount. 3.Tenure will be fixed. List one (1) strength and one (1) weakness Strength: Provide advantage every time interest rate decreases. Weakness: In case of increase in interest rate will further improve the interest burden. Strength: Interest remain fixed. Weakness: Even if the decline in interest rate will not reduce the interest for the customer. Strength: Only the interest will involve in installments of every month. Weakness: client need to repay the entire loan value in the end of the tenure. 4. Home equity loan (line of credit) 5. Credit card6. Personal overdraft Financial institution and name of product Home equity loanCredit card loanOverdraft facility Product characteristics (features) (Minimum of three (3)) 1. Fixed amount of loan. 2. Secured loan 3. Fixed tenure 1. Loan over credit card 2. No interest rate 3. Repayment is easy 1. Limit of overdraft is set. 2. Interest is chargeable 3. Tenure is fixed Product purpose (What would a client use this for?) The purpose is to provide the secured home loan. The purpose is to provide the credit for a specific tenure. Provide overdraft facility. 4. Home equity loan (line of credit) 5. Credit card6. Personal overdraft Applicable fees and chargesProcessing fees and insurance charges. No feesNo fees Terms and conditions of this product (Minimum of three (3)) 1. Secured loan 2. Money is secured against the value of home 3. Tenure is fixed. 1. No interest is applicable 2. Tenure is fixed 3. Credit limit is accessible. 1. Limit is fixed 2. No interest 3. Tenure is fixed. List one (1) strength and one (1) weakness Strength: Secure loan Weakness: Value of home is increases. Strength: no cost loan Weakness: unsecured Strength: No cost loan Weakness: limited amount Task 4: Question 2 Conduct your own research on current home loan industry trends. Provide a minimum of three (3) current trends.(50 words) Student response to Task 4: Question 2 Document classification: ConfidentialPage30of128
Fixed interest home loan remain interest rate fixed. Variable interest home contain variable interest rate. Home equity loan provide secured home loan. Task 4: Question 3 (a)How do financial service providers market and/or promote their products and services? (b)Where can you locate a lending organisation’s current promotions and specials? (c)Describe how you would identify clients whose needs match products and services that are part of a current promotional strategy. (dDescribe how you can keep your product knowledge up to date.Include the methods and/or systems you could use to maintain product knowledge. (40 words) Student response to Task 4: Question 3 (a) Advertisements channels are used to promote services. (b) Promotions over social media and other advertisements sites. (c)Analysis of the customer need and requirement will guide properly in such a matter. (d) Regular studies, reading updates and such are the method to keep information up to date. Document classification: ConfidentialPage31of128
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Task 4: Question 4 The Australian Banking Association’s (ABA) Banking Code of Practice (BCOP) outlines several obligations for the provision of financial products and services. The Code can be downloaded from the ABA website. (a)List at least two (2) items of information that must be provided to a client when providing financial products and services. (b)Refer to the items you listed in part (a) and explain what the items clearly set out. (c)What four (4) factors does the Code advise about providing banking services to vulnerable clients? (d)According to the BCOP, how would you identify (become aware of) a potentially vulnerable client and a client on a low-income? (100 words) Student response to Task 4: Question 4 (a) List of document and loan repayment schedule. (b) List of document involve complete details in respect to the documents that are required to grant the loan. This involve the proper information about te type of document, legal charges and such other information. Loan repayment schedule is a complete schedule to repay the entire loan value. (c)Affordable EMI facilities, managing financial data effectively, communicate clearly in respect to charges and proper support in case of any failure in loan repayment. (d) Vulnerable customers are the one identify based on the extreme mood, poor concentration, feeling overwhelmed by things and being emotional. Low income customer are identity based on the income. Task 4: Question 5 What is a deposit bond and when would it be suitable for a purchaser to use this product? (Refer to the Toolbox or conduct your own research)(30 words) Student response to Task 4: Question 5 Deposit bond allow the buyer to pay the security instead of cash up-to the value of 10% of the purchase price. This is suitable in case of liquidity related issues face by the customer. Assessor feedback for Task 4 — Products and services Document classification: ConfidentialPage32of128
(Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage33of128
Section 2: Business skills Document classification: ConfidentialPage34of128
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Task 5―Effective communication Communication is vital in all interactions, particularly for successful team and client relationships in business. Answer the following questions using the information from the topic notes in conjunction with your own research. Task 5: Question 1 List a minimum of four (4) types of communication skills and explain why each is important for effective business communication.(40 words) Student response to Task 5: Question 1 Communication skills are classifies as verbal communication, non-verbal communication, written communication and visual communication. All types of communication skill is suitable to convey all different ideas and aspects related to the venture. Task 5: Question 2 (a)Explain why listening is so important for effective communication. (b)List three (3) barriers to effective listening. (30 words) Student response to Task 5: Question 2 (a)Listening allow the person to understand the message the other person is trying to deliver in the communication. (b)Evaluative listening, assumptive listening and self protective listening. Task 5: Question 3 List five (5) tips to help someone communicate more effectively with different types of clients (e.g. when dealing with a someone from a different cultural background, whose first language may not be English or a difficult client).(50 words) Student response to Task 5: Question 3 Use the common language. Communicate in a way client can easily understand everything. Do not try to mislead customer in any given way. Listen properly to the customer. Solve all queries of client. Document classification: ConfidentialPage35of128
Assessor feedback for Task 5 — Effective communication (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage36of128
Task 6 — Professional development Refer to the business profile for Capital City Finance and Mortgage Brokers (CCF & MB) located in the subject room. For this task you are to assume you are a mortgage consultant with the CCF & MB team. Your manager has gone on extended leave and you have been given the task to step up into their role for that period. You are responsible for the performance and development of yourself and your team. Youalso have a new team member starting in your organisation. It is now your responsibility to ensure that they are provided with the correct information and support to ensure they have the best opportunity to succeed in your organisation. You will be required to explain a number of items to your team, as well as support and guide them to maintain their performance and professional development during this time. Task 6: Question 1 (a)Explain why is it important for individual work goals to align to the organisation’s goals? (b)Identify the types of organisational framework that you can refer to when planning your own and your team’s work goals to ensure that they align to the organisation’s goals. (c)List the colleagues you would consult with if you required clarification of your own role responsibilities and how they fit into the wider organisation’s goals and objectives. (80 words) Hint/Tip: You may be required to conduct your own research for this Task. Refer to the Toolbox for suggested links. Student response to Task 6: Question 1 (a) This is extremely important that an individual align the individual goal with the goal of the organisation. This support the employee to perform in the organisation in the best of its own capacity. (b) Setting up clear objectives, get buy in from leadership, communicate goal on every level and help employee achieve the goal. All these are a part of the framework that may adopt while align individual objective with the company. ( c ) The management and leaders of the company can be communicated. Document classification: ConfidentialPage37of128
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Task 6: Question 2 (a)Where would you document the new team member’s role responsibilities? (b)How will you outline and document their role-specific targets? (c)Explain how you will support the new team member to set goals to ensure they will achieve their targets. (d)Describe how you can use technology to help you manage the team’s work priorities. (50 words) Student response to Task 6: Question 2 (a) The new team member role can be documented in the excel file. (b) On the basis to the need of the task and skill carry by the individual person outline and documentation and their role specific targets. ( c ) The proper guidance can support the new team members to achieve the goal. (d) Technology can involve at each individual level. Team members can involve technology at all individual level. Task 6: Question 3 What guidance can you provide the new team member to keep up to date with industry and product knowledge? Provide a minimum of four (4) tips. (50 words) Student response to Task 6: Question 3 Take regular research over industry trend. Proper coordination with product design and development team. Read product description. Team meetings. Task 6: Question 4 (a)Describe how you can encourage and facilitate personal and professional development for you and your team? (b)How can you record and document you and your team’s personal and professional development goals? (c)Explain the human resources policy and procedure at CCF & MB regarding the attendance of professional development seminars, webinars and offsite development workshops. (Refer to the example business profile for CCF & MB) (50 words) Student response to Task 6: Question 4 Document classification: ConfidentialPage38of128
(a) Personal and professional development can encourage with proper motivation. Encourage team members to grow the individual skill in order to achieve team goals in more efficient manner. (b) Proper actions plan can maintain. Team review document can maintain to record all developments. ( c ) CCF & MB follow the practice of conducting regular seminars on weekly and monthly basis. Webinars also conduct to approach the personal and professional development. Document classification: ConfidentialPage39of128
Task 6: Question 5 (a)Describe how can you identify team health and wellbeing in the workplace. (e.g. How would you know if your team is working well together and if individuals are okay). (b)What strategies might you put into place to manage team health and wellbeing in your workplace? (80 words) Student response to Task 6: Question 5 (a) At work place team health can identify with support of proper work life balance practices. This would allow the management to effectively manage the work life of the employee and team members. (b) Managing team health can be coordinated with support of proper work load management, incentive scheme and other health related benefits. Document classification: ConfidentialPage40of128
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Task 6: Question 6 Part of your role requires you to monitor and measure your own performance. (a)Complete the annual targets in your scorecard. (You may need to conduct some research for realistic targets – there is an example Scorecard located in the Business Profile for CCF & MB) (b)Complete the actual results up to Quarter 3. You notice you are behind in two Key Performance Indicators (KPIs). Record the results in the Scorecard below. Student response to Task 6: Question 6 Answer here GoalQ1 Target Actua l Result % of Target Q2 Targ etActual Result % of TargetQ3 TargetActual Result % of TargetQ4 TargetActual End of year result % of Target Improve skillTo learn new skills Hard and soft skills 20%50 % Learn new skills 30Asses the skill develop ment Analysis both hard and soft skills 40Identify the improve ment. Assess skill improvemen t 80 Improve performan ce Identify the key performance areas All areas 2050Identify the area of improvement 30Frame strategie s Identify the area of improve ment 50Set goal to improve the performa nce Frame planning to improve performance 80 Achieve better growth Identify the growth target Set goals 2030Identify goal clearly 35Know the key areas Set long term goals 40Analysis performa nce Proper performance assessment 70 Document classification: ConfidentialPage41of128
Task 6: Question 7 Describe how you will monitor your own performance against your scorecard.(50 words) Student response to Task 6: Question 7 Own performance can be monitored with the use of self evaluation technique. This will allow analyzing the own performance. Task 6: Question 8 (a)You are required to create a professional development plan (PDP). (Refer to the Toolbox for a sample PDP or you can develop your own.) Your PDP must include the following, namely: •the two (2) KPIs from your scorecard for which you are behind as at Q3. •a goal for each of those KPIs to ensure you will achieve them by Q4. •the steps/actions you will take to achieve the goals. •two (2) professional development areas that you would like to improve •two (2) formal training or continuous professional development activities that relate to the industry(refer to industry associations for ideas). •the minimum amount of CPD points you would need to maintain if you were a Mortgage and Finance Association of Australia (MFAA) member holding ‘loan writer’ status (link available in the Toolbox). (b)Once you have completed your personal development plan, who will you seek feedback from on theplan? (150 words) Student response to Task 6: Question 8 (a) Area of improvementGoalKPITraining Improve skillTo learn hard and soft skills Skill evaluation and monitoring the performance Skill development training Improve delegation ability To learn how to delegate the work. Performance assessment and work management analysis Management and leadership training. (b)The feedback plan will send to the senior and head of department. Task 6: Question 9 Now that you have developed your own PDP, prepare two (2) other PDPs, each containing a minimum of two (2) development areas, for the following staff members: (a)a loans administrative officer (b)a mortgage broker who has recently joined the team. (150 words) Document classification: ConfidentialPage42of128
Student response to Task 6: Question 9 (a)Personal development area Area of improvementGoalKPITraining Communication skillTo improve the skillSelf evaluationDigital training over communication skill Analytical skillTo improve the skillPerformance basedAnalytical training (b)Personal development area Area of improvementGoalKPITraining Communication skillTo improve the skillSelf evaluationDigital training over communication skill Research skillTo improve the skillPerformance basedResearch training Document classification: ConfidentialPage43of128
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Task 6: Question 10 Managing your time is vital to being able to juggle all of your work tasks, professional development and personal life. Refer to the information provided in the topic notes as well conduct your own research regarding the ‘important/urgent’ matrix. There are many short videos available — for example, the Eisenhower matrix: How to manage your tasks with Eisenhower, [online video], viewed 3 May 2021, <www.youtube.com/watch? v=tT89OZ7TNwc>. (a)Make a list of a minimum of twelve (12) tasks and activities a mortgage broker (or mortgage consultant) would need to complete in their role. This should include anything that requires your time — for example, team meetings, emails, personal emails, making a coffee, processing your work, training etc. (30 words) Hint/Tip: Refer to the example business profile for Capital City Finance & Mortgage Brokers (CCF & MB) for a Mortgage Consultants Role description and list of role tasks. When it comes to phone calls and emails, be specific about the types of phone calls or emails you handle. For example, personal/social emails versus urgent email requests from a client. Student response to Task 6: Question 10(a) (a)Set goals, identify target market, visit,team meetings, emails, personal emails, frame strategies, processing your work, training, analysis performance and identify the areas of improvement. (b)Once you have listed your job tasks above (from part a), place each task in the appropriate quadrant.(30 words) Student response to Task 6: Question 10(b) Important/Urgent Set goals, identify target market, team meeting, frame srtrategies, processing work. Important/Not Urgent Training, email Not Important/Urgent Personal emails, Not Important/Not Urgent Analysis performance and identify area of improvement. Assessor feedback for Task 6 — Professional development (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage44of128
Task 7 — Customer service Customer service is integral to the success of any organisation and regardless of industry, customers are placed at the core of everything businesses do. Therefore, being clear on your organisation’s customer service standards is critical to ensure that the service you and your team provide is in line with its culture and expectations. Organisations establish customer service systems to ensure there is a consistently high standard of service for customers from end to end, across all departments, involving all team members, and at every touchpoint their customers have with their organisation. It is important that the customer service system is continually monitored and reviewed to ensure that the system remains effective. For the following questions, reflect on your current or past organisation or conduct research to explain how businesses approach gathering, monitoring and acting on feedback from internal and external customers. Then answer the following questions. Task 7: Question 1 List and explain three (3) processes that a business can use to gather feedback from its clients?(30 words) Student response to Task 7: Question 1 Direct feedback, personal interview and over email. Task 7: Question 2 Feedback is very important for a business to understand that the products and service that they provide to their clients meets the expectations of the clients. The feedback from the quarterly customer survey on the service and products provided has been received by the business. There are six (6) responses of feedback received: 1.‘The broker was really helpful and responded quickly to my emails. They were very personable and professional’:Sam Welsh 2.‘I left a message on their message bank on Thursday night, leaving my details to be contacted the next day. I didn’t get a response call until the following Thursday – I really couldn’t wait that long as I had found a property and went elsewhere’:Anh Nam 3.‘No one responded my calls in a timely manner, it was always 2 to 3 days later’: Mario Taranto 4.‘Isent an email on the Friday and still did not have a response by the following Friday, I wasn’t very happy with that’:Aya Farid 5.‘I sent through a couple of emails with questions that I had regarding my loan application. The response I received was not what I was expecting – very unprofessional’:Yarran Danggetti 6.‘I am really happy with the products recommended to meet my needs for a home loan’:Dan Wong It is important to record and action this feedback. Document classification: ConfidentialPage45of128
Part 1 The feedback is to be recorded the client files. (a)Select three (3) responses from above and record these details in the table below, including what actions you would take. (b)How would you confirm that the client’s expectations have been met in response to their feedback? Student response to Task 7: Question 2 Part 1 (a)Answer here Client NameFeedback sourceFeedback commentsAction requiredAction completed Y/N Same WelshDirectThe broker was really helpful and responded quickly to my emails. They were very personable and professional Over imporve procesingY (b)In against to the feedback it can state that client expectations did meet. In response to the feedback expectations of the client did fulfill. Part 2 (a)Referring to the areas of concern in the survey responses above, write a customer service improvement report including: •three (3) areas where customer service can be improved.(What) •a minimum of two (2) actions that would be required to implement the improvements.(How) •a list of the stakeholders that would need to be consulted to implement the improvement, and an explanation of how you would communicate this with the stakeholders.(Who) (b)Write an email to a stakeholder identified in the table below explaining your recommendation and how it will improve the area of customer service. (100 words) Hint/Tip: Draw on your current and/or past experiences to answer this question. Refer to the Toolbox for examples of customer service standards. You may also use the example business profile of CCF & MB to answer this question. It is preferable that you relate the areas of customer service to the finance and mortgage broking industry. You also may need to conduct your own research. Student response to Task 7: Question 2, Part 2 (a) Area for Improvement Steps/Actions to implement improvementthe improvement (min. of two (2) actions) Communication to Stakeholders (name the stakeholder by role) Time frame to complete Document classification: ConfidentialPage46of128
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1.Approaching customersProper communication and understanding about customer need. Over phone and direct communication 3 weeks 2.Providing servicesAddress the client requirements in the best way possible and also to provide authentic information. Direct2 weeks 3.Post serviceFocus on timely services. Take review of service quality. Over phone4 weeks (b)Considering the customer requirement is a key basis to improve the performance. Further dealing with the issue of customer is a prominent way to allocate the practice. Document classification: ConfidentialPage47of128
Task 7: Question 3 (a)How can you and your team monitor the level of customer satisfaction in your workplace in line with the service standards set? (b)Provide two (2) suggestions for ensuring that team members are accountable for the customer service standards in the workplace. (75 words) Student response to Task 7: Question 3 (a)Monitoring must be done regularly. Further the feedback strategy can follow to monitor the level of customer satisfaction. (b)Team members must look at all the areas of service allocation. This is suggested that solving issues of customer is also require on a timely manner. Assessor feedback for Task 7 — Customer service (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage48of128
Task 8―Respond and report on complaints Task 8: Question 1 Refer to the Toolbox in your subject room for Policies and Procedures and links regarding handling complaints and disputes, and respond to the following questions based on those documents: (a)Who should a client refer their complaint to in the first instance? (b)In accordance with the Banking Code of Practice, if a provider of financial products and services is unable to provide a resolution within 30 days, whatare the five (5) steps they must take? (50 words) Student response to Task 8: Question 1 (a)Relation officer is the one client approach for addressing the complaint. Further the loan manager can be communicated to resolve the issue. (b)Customer must visit to the branch. Customer must address to the relationship manager about the complaint. Ask questions about the improvement. Review the complaint. Take proper assurance to solve the issue. Task 8: Question 2 Consider the following scenario. Mr Joseph Harper, a new customer, has called your office and has complained about the time it is taking to receive a decision on his loan application, which was submitted 10 days ago. The average turnaround time with the lender Joseph has applied to for a loan is 14 working days. Additionally, the loan requires lenders mortgage insurance (LMI), which could add a further two days to the assessment time frame. The client is getting anxious as he has made an offer on a property subject to finance. There is only 14 days from date of offer to confirm finance approval before the property will go back on the market, so he is very worried he may miss out on the property. (a)Describe the steps you will take to resolve this complaint. Include the stakeholders you will refer to in the resolution process. (b)Describe the resolution you will communicate to Joseph. You may refer to the Toolbox for Policies and Procedures regarding handling complaints and disputes. (80 words) Student response to Task 8: Question 2 (a)Resolving complaint is done with placing the complaint with the respective party. In the resolution process relationship manager, loan manager, branch manager and customer itself can become a part of the process. (b)Resolution will be communicated over phone calls and personal mail of the customer. Document classification: ConfidentialPage49of128
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Task 8: Question 3 Complete the customer report below based on the scenario in question 2. Student response to Task 8: Question 3 Customer complaint report Customer name Title (Mr, Mrs, etc.)Family name (surname)Given names MrHarperJoseph Service being provided to client: Loan related service Nature of complaint: Urgent Outcome: The application will be reviewed by the back office. Assessor feedback for Task 8 — Respond and report on complaints (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage50of128
Task 9―Prospecting for new clients Finding sales prospects or people who are likely to become customers is necessary to ensure the stability and growth of a business. Task 9: Question 1 What communication methods can be used to prospect for new clients? (30 words) Student response to Task 9: Question 1 Communication method like direct and over mobile phone and email. Task 9: Question 2 Refer to the Toolbox and the Client Prospecting Guidelines and answer the following questions: (a)What are the four (4) steps you must include in your introduction when making a prospective call? (b)Following your introduction, what important question must you ask before continuing with your call? (c)What should you do if the prospect advises you that they do not wish to continue the call and they do not wish to be contacted again? (30 words) Student response to Task 9: Question 2 (a)Addressing own name, place of business, reason of call and make detail and clear information. (b)Hello sir how you doing? (c)In such a situation understand the client situation and take steps accordingly. Document classification: ConfidentialPage51of128
Task 9: Question 3 You have made two (2) prospecting calls. As per the client prospecting guidelines located in the Toolbox, complete the client prospect register below for the following scenarios: (a)Call 1:You made a call to Rosie Abdul. Following your introduction, Rosie agreed to continue the call. Rosie has been considering refinancing her home loan and seeking an increase to her loan so as she can renovate her kitchen. Rosie also said that the task of doing the research for different lenders seems too daunting. She is not quite ready to begin the process, but she is interested in how your brokerage could assist her. Rosie asked if you could call back in three months. (b)Call 2:You just called Bruce O’Connor and introduced yourself and provided the purpose of the call. You asked Bruce permission to proceed with the call. Bruceadvised that he was not interested and did not want to receive calls from your firm in the future. Student response to Task 9: Question 3 Client prospect register NameDateContact method Comment/outcomeFollow up required (Y/N)Follow up date Do not call (a)Rosie Abdul24/12/2021Phone callShe is interestedY24/03/20 22 No (b)Bruce O’Connor 24/12/2021Phone callNot interestedNAnswer here Answer here Document classification: ConfidentialPage52of128
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Task 9: Question 4 Refer to your contact with Rosie Abdul in Question 4. Three months has now passed, and you need to call Rosie back. Explain how you will prepare for your next call with Rosie. Include the following: (a)The information you will require from Rosie. (b)The information you should provide to Rosie about how your brokerage firm can assist her and a brief outline of the application process. (80 words) Student response to Task 9: Question 4 (a)Information about the further loan processing that involve personal information, income related details and other such information. (b)Answer here Task 9: Question 5 Refer to the Toolbox for the link to the following article: 6 Steps of a Successful Sales Process: Understanding both perspectives. Explain the key features of the buying and selling process.(80 words) Student response to Task 9: Question 5 Features like understand the need of customer, identify the requirement, assess about the competitors and such are the key features. Communicating the entire message is also important. Assessor feedback for Task 9 — Prospecting for new clients (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage53of128
Task 10 – Professional networks You build on your network base each day at work as you interact with your colleagues, and internal and external stakeholders. You even build networks in your social life. Networks and professional connections are important as they can be helpful in building on your industry knowledge, your career development and also to grow your business. Hint/Tip: Watch the video ‘Networking for Success’ – the link is in the Toolbox. Internal networks– people you know and connect with inside your organisation, for example, colleagues, people from other departments. External networks–people you know and connect with outside of the organisation, for example, other professionals who do not work in your organisation that are aligned with your work, industry associations, family, friends, sporting clubs, social clubs, committees, children school, social/professional media platforms. Task 10: Question 1 (a)Identify and make a comprehensive list (minimum of ten (10) internal and external networks). Thiscan include networking groups and/or associations. List people by their role rather than their names – if you are not currently working, you can list the networks you would have in a mortgage broker role. (b)From the list you created in part (a), choose six (6) networks. At least one (1) must be from the financial services industry and one (1) must be a third-party referrer. The others may be from any other connections. Complete the table below by outlining how your connection with these networks is of benefit to you and to the broking business. (c)From the list in Part (b), choose three (3) connections/networks. Explain how youdevelop andmaintainthose relationships. Include how you will stay in contact and also how you will enhance the relationship to ensure it remains mutually beneficial. (d)Identify and explain the importance of three (3) communication channels and tools that you use to develop and maintain professional relationships. (100 words) Student response to Task 10: Question 1 (a)LAN, PAN, MAN, WAN, WAN, SAN, VPN, personal network, CAN, System area network and computerized network. (b) NetworkBenefit You 1.LANIt connect the whole data base. 2.PANIt is easy to coordinate. 3.MANEffective for personal use. NetworkBenefit to the business 4.Personal networkAuthentic 5.System area networkAvailable large in number 6.ComputerizednetworkEasy to store. Document classification: ConfidentialPage54of128
(c) Network/connection — NameType of network/connectionsActions you take to develop and maintain the relationship 1.LANSystem networkProper connectivity 2.PANSystem networkProper coordination 3.MANSystem networkPrioritize individual requirements (d) Communication methodWhat are the positive features of this method(why might you use it)? 1.Phone callsTime saving mode of communication. 2.EmailAuthentic and convenience to store. 3.DirectFavorable to solve customer issues. Task 10: Question 2 Explain how you will maintain policy, regulations and codes of practice when networking to promote your business and enhance its reputation. Include how you would present yourself, communicate and maintain client confidentiality.(30 words) Student response to Task 10: Question 2 The proper system will design to maintain all the information. The system will be secured with the use of password. Task 10: Question 3 (a)Identify two (2) practices that could be implemented to improve business practices when it comes to developing and maintaining networks. (b)Explain which personnel you would involve in reviewing your network connections to ensure that they are appropriate for your business’ needs and why you would involve them. (75 words) Student response to Task 10: Question 3 (a)When it comes to develop the network identify the capacity to store the data from the network. Also the practice is to identify whether the data will be protected in the network. (b)On the basis of the storage capacity of the network and the security aspect of the network. Assessor feedback for Task 10 — Professional networks (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage55of128
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Task 11―Managing information Working as a broker in the financial services industry can involve working for a large or small organisation. A comprehensive understanding of the organisation’s structure, management, processes and policies is vital for success. Refer to the Capital City Finance and Mortgage Brokers (CCF & MB) case study (Future developments) located in the subject room. CCF & MB have hired a new sales team member, and you are responsible for completing the induction program. Task 11: Question 1 Briefly explain how CCF & MB access information regarding updates to products and services in their system. (50 words) Student response to Task 11: Question 1 Information is updated easily with the use of system. This involve regularly updating the available information. The modification will be done over the existing information to update it. Task 11: Question 2 Managing information in a mortgage broking firm may also apply to maintaining and upkeeping compliance and licences. Refer to the Australian Securities and Investment Commission’s (ASIC) website to answer the following question. Australian credit licence holders are required to complete an Annual Compliance Certificate and lodge it with ASIC. Hint/Tip: You will be required to conduct your own research—Refer to the Toolbox and ASICs website. When completing the Annual Compliance there is specific information required to be provided to ASICupon lodgement. List the five (5)items that are required to be confirmed on the Annual Compliance Certificate.(75 words) Student response to Task 11: Question 2 Is the complaint is authentic. Time of the complaint Seriousness of the complaints Progress made to solve the complaints Legal implication of complaint. Assessor feedback for Task 11 — Managing information (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage56of128
Section 3: The lending process Document classification: ConfidentialPage57of128
Task 12―Understanding the client’s needs Brokers have both ethical and legislative obligations to understand a client’s needs and objectives. Thereare obligations for making reasonable inquiries and verifications under NCCPs responsible lending obligations contained in ASIC’s Regulatory Guide 209 (RG209). Research RG209.43 online and answer the following questions. Task 12: Question 1 While it is important to understand your client’s needs and objectives to ensure that you recommend a product that has all of the features and benefits they require, it is also important to understand other requirements your client may have to ensure the product recommended is ‘not unsuitable’. List at least four (4) types of ‘specific customer requirements’ your client may have. Hint/Tip: Refer to your topic notes and/or conduct your own research. Choose requirements that may not necessarily be a product feature, for example, a client may want a lender that they can visit or may need to sell the property in a specific time frame. (20 words) Student response to Task 12: Question 1 Answer here The four types of 'specific customer requirements” that clients may have with the financial products are as follows: High Quality customer services. Mobile and online access to loan amount. Security and fraud protection. Low fees of processing the loan. Task 12: Question 2 When the loan is for a self-employed person, the lender will ask for financial information for the business. What are the common financial records the lender will ask for? Provide a minimum of three (3).(Thesemust be in addition to what a PAYG client would provide.) (20 words) Student response to Task 12: Question 2 Answer here The common financial records lenders will ask from the self-employed person are as follows: Income Statement Balance sheet Bank statement Document classification: ConfidentialPage58of128
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Task 12: Question 3 (a)Explain the information that is contained in a credit report. (b)Why it is important that the client provides all the details about their credit report to their broker at the beginning of the loan process? (c)What are the credit provider’s obligations to the client if a loan is declined due to their credit report? (d)What would you advise your client to do if their loan was declined due to their credit report? (80 words) Student response to Task 12: Question 3 (a)Answer here The information contained in credit report are as follows: (ci)Type of account (cii)Date opened (ciii)Credit limit or loan amount (civ)Account Balance (cv)Loan history (b)Answer here Checking credit history and scores is important for the broker because it helps them in understanding their current credit position. With the help of this report, the broker can suggest that whether the loan of the client is get approved by the banks of Australia or not. (c)Answer here The Credit provider is obliged to ask the lender for the reason why the loan of the client is declined. After that, they are also liable for the examination of inaccuracies present in the credit report. (d)Answer here Being a broker, I would advise my client that they should talk to their credit provider and check the errors in their credit report. I would recommend that they should establish the credit history and check it on timely basis. Assessor feedback for Task 12 — Understanding the client’s needs (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage59of128
Task 13―Developing and presenting solutions Task 13: Question 1 The client solution is not just about providing a product that will meet their product needs. Developing a solution for your client’s needs also involves the security or collateral that the lender will require for that loan product. (a)List a minimum of three (3) types of assets that lenders may take as collateral to secure a loan. (Thiscan be security for either consumer or commercial lending.) (b)List a minimum of two (2) security documents that are required in order for the lender to have control over the asset while the loan is in place. (c)If a director offers their home (in their personal name) as security for lending in their company name, what is the name of the security document that is required to link the asset to the loan? (d)From time to time a client may need to offer a second property to support a loan in order to reduce the loan-value-ratio (LVR) to avoid LMI and meet lender requirements. What is this name of this practice? (50 words) Student response to Task 13: Question 1 (a)Answer here The three types of assets that lenders use as a collateral to secure a loan are as follows: (ci)Personal real estate (cii)Home equity (ciii)Personal Vehicles (b)Answer here The two security documents which state that lender has control over the assets are as follows: Ownership paper of assets of applicants Share certificates issued in the name of borrowers. (c)Answer here The guaranteed and collateral agreement is a security document which link the personal assets of the borrower to its business loan. (d)Answer here Additional collateral is a practice which state that clients need to offer a second property to support a loan in order to reduce LVR and avoid LMI. Assessor feedback for Task 13 — Developing and presenting solutions (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage60of128
Task 14 – Packaging the application to send to the lender Packaging a home loan application is detailed and requires a mortgage broker to gather documents to prepare the lending submission in accordance with the lender’s requirements. While it is important to know what documents you will need to gather, it is also important that you understand the information contained within the documents. For example, the frequency of income, if overtime is included. Task 14: Question 1 (a)Explain what documents you would gather to in order to verify: (i)a PAYG employee’s income (ii)a self-employed person’s income (iii)rental income for an existing investment property. (b)Choose three (3) documents that you listed in part (i). Write one (1) question that you could ask the client to confirm you understand the information contained within each of the documents provided. (60 words) Student response to Task 14: Question 1 (a)(i)Answer here=One month bank statement (a)(ii)Answer here= Federal Tax returns (a)(iii)Answer here= IRS Form 1040, Schedule E or a business tax return. (b) DocumentOne (1) question to confirm information with your client 1.One month bank statementThe question regarding the digital payment transactions are asked to the clients to confirm the information. 2.Federal Tax returnsThe question regarding the income and expense verification invoices is asked by broker. 3.IRS Form 1040, Schedule E or a business tax return. The broker will confirm the information by asking the questions regarding proof of rent letter. Document classification: ConfidentialPage61of128
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Task 14: Question 2 When submitting your client’s loan application, you also need to submit supporting documentation. (a)Explain how you confirm that you have the correct supporting documents for your client’s loan requirements in accordance with the lender’s requirements.(e.g. If the loan application was for an investment property, think of what may be required as specific supporting documents) (b)Explain how you check the supporting documentation for accuracy and also to ensure that the documents are in the right format and legible for the lender. (40 words) Student response to Task 14: Question 2 (a)In order to confirm that whether the broker have correct supporting document in accordance with the lender requirements, the broker can link the documents that lenders require providing loan with the documents available with the clients. For example, in order to confirm this in the case of investment property loan the lender basically require the borrowers address proof, bank statement, application form along with the mortgage, deeds and leases. This will helps them to confirm that whether the client have correct supporting document or not. (b)In order to check the accuracy of the supporting document and ensure that it is in the right format, I will hire a legal team and expert. Assessor feedback for Task 14 — Packaging the application to send to the lender (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage62of128
Task 15―Monitor the lending process Some loan applications may require further information following submission. This often means returning to the client to obtain the information. Task 15: Question 1 Provide one (1) example of further information a lender may request. Explain common reasons for the additional information. (30 words) Student response to Task 15: Question 1 Answer here After loan submission, further information requested by lender could be providing various documents such as tax returns and payslips, copy statement of financial statement, consent for LMI, document stating value of property offered as security, etc. to complete specific conditions of the loan required by the credit providers. Assessor feedback for Task 15 — Monitor the lending process (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage63of128
Section 3: The lending process Document classification: ConfidentialPage64of128
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Task 12―Understanding the client’s needs Brokers have both ethical and legislative obligations to understand a client’s needs and objectives. Thereare obligations for making reasonable inquiries and verifications under NCCPs responsible lending obligations contained in ASIC’s Regulatory Guide 209 (RG209). Research RG209.43 online and answer the following questions. Task 12: Question 1 While it is important to understand your client’s needs and objectives to ensure that you recommend a product that has all of the features and benefits they require, it is also important to understand other requirements your client may have to ensure the product recommended is ‘not unsuitable’. List at least four (4) types of ‘specific customer requirements’ your client may have. Hint/Tip: Refer to your topic notes and/or conduct your own research. Choose requirements that may not necessarily be a product feature, for example, a client may want a lender that they can visit or may need to sell the property in a specific time frame. (20 words) Student response to Task 12: Question 1 Answer here The four types of 'specific customer requirements” that clients may have with the financial products are as follows: High Quality customer services. Mobile and online access to loan amount. Security and fraud protection. Low fees of processing the loan. Task 12: Question 2 When the loan is for a self-employed person, the lender will ask for financial information for the business. What are the common financial records the lender will ask for? Provide a minimum of three (3).(Thesemust be in addition to what a PAYG client would provide.) (20 words) Student response to Task 12: Question 2 Answer here The common financial records lenders will ask from the self-employed person are as follows: Income Statement Balance sheet Bank statement Document classification: ConfidentialPage65of128
Task 12: Question 3 (a)Explain the information that is contained in a credit report. (b)Why it is important that the client provides all the details about their credit report to their broker at the beginning of the loan process? (c)What are the credit provider’s obligations to the client if a loan is declined due to their credit report? (d)What would you advise your client to do if their loan was declined due to their credit report? (80 words) Student response to Task 12: Question 3 (a)Answer here The information contained in credit report are as follows: (cvi)Type of account (cvii)Date opened (cviii)Credit limit or loan amount (cix)Account Balance (cx)Loan history (b)Answer here Checking credit history and scores is important for the broker because it helps them in understanding their current credit position. With the help of this report, the broker can suggest that whether the loan of the client is get approved by the banks of Australia or not. (c)Answer here The Credit provider is obliged to ask the lender for the reason why the loan of the client is declined. After that, they are also liable for the examination of inaccuracies present in the credit report. (d)Answer here Being a broker, I would advise my client that they should talk to their credit provider and check the errors in their credit report. I would recommend that they should establish the credit history and check it on timely basis. Assessor feedback for Task 12 — Understanding the client’s needs (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage66of128
Task 13―Developing and presenting solutions Task 13: Question 1 The client solution is not just about providing a product that will meet their product needs. Developing a solution for your client’s needs also involves the security or collateral that the lender will require for that loan product. (a)List a minimum of three (3) types of assets that lenders may take as collateral to secure a loan. (Thiscan be security for either consumer or commercial lending.) (b)List a minimum of two (2) security documents that are required in order for the lender to have control over the asset while the loan is in place. (c)If a director offers their home (in their personal name) as security for lending in their company name, what is the name of the security document that is required to link the asset to the loan? (d)From time to time a client may need to offer a second property to support a loan in order to reduce the loan-value-ratio (LVR) to avoid LMI and meet lender requirements. What is this name of this practice? (50 words) Student response to Task 13: Question 1 (a)Answer here The three types of assets that lenders use as a collateral to secure a loan are as follows: (civ)Personal real estate (cv)Home equity (cvi)Personal Vehicles (b)Answer here The two security documents which state that lender has control over the assets are as follows: Ownership paper of assets of applicants Share certificates issued in the name of borrowers. (c)Answer here The guaranteed and collateral agreement is a security document which link the personal assets of the borrower to its business loan. (d)Answer here Additional collateral is a practice which state that clients need to offer a second property to support a loan in order to reduce LVR and avoid LMI. Assessor feedback for Task 13 — Developing and presenting solutions (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage67of128
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Task 14 – Packaging the application to send to the lender Packaging a home loan application is detailed and requires a mortgage broker to gather documents to prepare the lending submission in accordance with the lender’s requirements. While it is important to know what documents you will need to gather, it is also important that you understand the information contained within the documents. For example, the frequency of income, if overtime is included. Task 14: Question 1 (a)Explain what documents you would gather to in order to verify: (i)a PAYG employee’s income (ii)a self-employed person’s income (iii)rental income for an existing investment property. (b)Choose three (3) documents that you listed in part (i). Write one (1) question that you could ask the client to confirm you understand the information contained within each of the documents provided. (60 words) Student response to Task 14: Question 1 (a)(i)Answer here=One month bank statement (a)(ii)Answer here= Federal Tax returns (a)(iii)Answer here= IRS Form 1040, Schedule E or a business tax return. (b) DocumentOne (1) question to confirm information with your client 1.One month bank statementThe question regarding the digital payment transactions are asked to the clients to confirm the information. 2.Federal Tax returnsThe question regarding the income and expense verification invoices is asked by broker. 3.IRS Form 1040, Schedule E or a business tax return. The broker will confirm the information by asking the questions regarding proof of rent letter. Document classification: ConfidentialPage68of128
Task 14: Question 2 When submitting your client’s loan application, you also need to submit supporting documentation. (a)Explain how you confirm that you have the correct supporting documents for your client’s loan requirements in accordance with the lender’s requirements.(e.g. If the loan application was for an investment property, think of what may be required as specific supporting documents) (b)Explain how you check the supporting documentation for accuracy and also to ensure that the documents are in the right format and legible for the lender. (40 words) Student response to Task 14: Question 2 (a)In order to confirm that whether the broker have correct supporting document in accordance with the lender requirements, the broker can link the documents that lenders require providing loan with the documents available with the clients. For example, in order to confirm this in the case of investment property loan the lender basically require the borrowers address proof, bank statement, application form along with the mortgage, deeds and leases. This will helps them to confirm that whether the client have correct supporting document or not. (b)In order to check the accuracy of the supporting document and ensure that it is in the right format, I will hire a legal team and expert. Assessor feedback for Task 14 — Packaging the application to send to the lender (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage69of128
Task 15―Monitor the lending process Some loan applications may require further information following submission. This often means returning to the client to obtain the information. Task 15: Question 1 Provide one (1) example of further information a lender may request. Explain common reasons for the additional information. (30 words) Student response to Task 15: Question 1 Answer here After loan submission, further information requested by lender could be providing various documents such as tax returns and payslips, copy statement of financial statement, consent for LMI, document stating value of property offered as security, etc. to complete specific conditions of the loan required by the credit providers. Assessor feedback for Task 15 — Monitor the lending process (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage70of128
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Section 4: Case studies Document classification: ConfidentialPage71of128
Case study 1: Philip and Jennifer Brown The case study is located in the subject room in KapLearn. Often client meetings occur in the form of a face-to-face meeting, typically at the broker’s office or in the client’s home or workplace. As technology has developed, it has made different forms of client contact possible using software such as Zoom. Conducting online meetings has become more acceptable and can also be quite convenient for some clients. Task 16―Case study: Purchasing an owner-occupied home It is time to prepare to meet with your first client, Philip and Jennifer Brown. As the broker, you need to consider a range of obligations when dealing with a customer. This section will consider some of these obligations. Task 16: Question 1 You have just made an appointment over the phone to meet with Jennifer and Philip. Prepare an email outlining the purpose of your first meeting. In the email, make sure you also cover the following points. (a)What documents would you attach to the email? (b)Include the following information in your email: (i)the services, values and capacity your organisation has to offer (ii)your background, credentials and your role as their broker (iii)the commercial relationship that your firm has with the product providers (i.e. the lenders on your panel). (50 words) Hint/Tip: You can base your response to Part (b) on the CCF & MB business case study located in the subject. Student response to Task 16: Question 1 (a)I would attach a file which contains the list of financial products with the email. (b)(i)Answer here (b)(ii)Answer here (b)(iii)Answer here To: Philips From: Mortgage broker Subject: Requesting meeting for financial products Date: 20thDecember 2021 Dear sir/ mam, I am writing this mail to request you a meeting to discuss your situation. My organization providers the advisable service on best and suitable financial products. We provide financial products which is highly valuable and meet the clients borrowing capacity. My role as broker is to check the current financial position of clients in order to recommend best home loan. My firm have a strong commercial relationship with the lenders such as Westpac, Capital Bank etc. which Document classification: ConfidentialPage72of128
help the client in getting best financial products. Assessor feedback for Task 16―Purchasing an owner-occupied home (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage73of128
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Task 17―Completing the fact find Task 17: Question 1 From the information in Case Study 1 for Jennifer and Philip Brown, complete the following tasks. (a)Using the client information collection tool/fact finder below, complete: (i)assets and liabilities (ii)needs analysis (iii)credit representative notes (iv)anticipated fees and charges (v)funds to complete. Student response to Task 17: Question 1 Document classification: ConfidentialPage74of128
Client information collection tool/Factfinder For the client information collections tool/fact finder tasks, you will need to calculate government fees and charges as well as LMI where applicable. For this project, Genworth is your lender’s LMI provider. Please use the Genworth LMI calculator for all LMI calculations. There are links provided in the Toolbox to help you calculate the applicable fees and charges. Appointment date:17thDecember, 2021 Appointment time:12:30 PM Applicant 1Applicant 2 SurnameBrownBrown Other namesN/aN/a Contact detailsAddressUnit 12, 22 Wentworth Lane, Thomastown VIC 3074 Unit 12, 22 Wentworth Lane, Thomastown VIC 3074 Phone (W) Phone (H) (03) 3332 4565(03) 3332 4565 Mobile0491 575 7890428 345 749 Emailphilipsbrown@gmail.comJenniferbrown@gmail.com EmploymentAnswer hereACE Limited, 101 City Road Westside, Melbourne VIC 3000 Tech City, 804 High Street, Docklands VIC 3008 How long?Started 15/7/2014Started 30/6/2016 Previous employer (if less than two years)Answer hereAnswer here How long?N/a5 years Employment type (FT/PT/casual/self-employed)Full TimeFull Time Gross income (p.a.)$58000$95000 Number of dependants00 Motor vehicles: make/model/year/value $ Holden Colorado 2012Kia Cerato Sport 2015 Loan purposeTo Purchase for owned occupation Purchase price/valuation$490000 Deposit on property$50000 Document classification: ConfidentialPage75of128
Loan amountNote: The calculation of LMI was computed on the basis of purchase price of property. It is assumed that the clients estimates of cost will capitalise. $440000 + $9430 (LMI) excluding stamp duty Borrowing capacity (using Genworth serviceability calculation) The clients have passed the borrowing capacity as per the Genworth serviceability calculation. Document classification: ConfidentialPage76of128
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Assets and liabilities AssetsL i a b i l i t i e s DetailsMarket valueDetailsMonthly paymentsAmount owing Owner occupied property at:N/aMortgage with:N/aN/a Investment Property at:N/aMortgage with:N/aN/a Cash at bank (includes fixed deposits)$82000Car leasingN/aN/a Other cash (includes offset accounts)$1600Personal loans 1. Capital Bank personal loan (Philip) $180$5600 Deposit paid on property (only if paid)N/aOverdraftN/aN/a Motor vehicles: 1. Holden Colorado 2012 2.Kia Cerato Sport 2015 $34000Other loans: 1. 2. N/aN/a Personal effects$40000Credit card limit: Capital Bank Visa card (Philip) $200$4000 Business value (if self-employed)N/aCredit card limit: Capital Bank Visa card (Jennifer) $1600$5000 Shares and investmentsN/aOther:N/aN/a Superannuation$90000Other:N/aN/a Other assets (give details)N/aOther:N/aN/a Total assets$247600Total liabilities$1980$14600 Surplus/deficiency: (Total assetslessTotal liabilities) $233000 Document classification: ConfidentialPage77of128
CURRENT MONTHLY LIVING EXPENSES (Provide a breakdown of the total amount listed in the case study — use your discretion) Food/housekeeping$16000 Insurance(e.g. motor vehicles, home contents/ building, medical, life/income protection)$5000 Utilities(e.g. rates, gas, electricity, transport)$3500 Transport(e.g. public transport, petrol, registration, repairs)$2500 Education(e.g. school, college, university)0 Dependants support(e.g. childcare, child maintenance)0 Entertainment (include online subscriptions, e.g. Netflix/Stan)$8000 Other (detail below):0 MONTHLY LIVING EXPENSES$35000 Document classification: ConfidentialPage78of128
Needs analysis 1Name of your current lender?Capital Bank 2What type of loans do you have?Personal Loan 3Why did you choose this particular loan and lender?It is because the interest rate of loan charged by Capital Bank is low as compared to other lenders 4What is the interest rate on your current loan?4.99% 5What are your payments?Amount$180 6FrequencyMonthly 7Do you know the fees and charges? 8What is your proposed purpose for the new loan you are applying for?Purchase for owner-occupied 9Branch access available with current lenderNo 10Internet banking available with current lenderYes 11Phone banking available with current lenderYes 12Lenders not to be consideredYes 13Type of loan soughtAll-in-one Home loan 14Preferred Interest rate range4% variable 15Payment frequencyMonthly 16RedrawYes 17OffsetYes 18Salary creditingYes 19Low fees and chargesYes Document classification: ConfidentialPage79of128
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Credit representative notes Note:Providing substantive notes here is a compulsory part of your assessment. Answer here Annual living expenditure of couple is $35000 LMI premium is capitalized in the loan amount. The interest rate of loan is Variable 4%. Document classification: ConfidentialPage80of128
Anticipated fees and charges Anticipated purchase price$490000 Deposit on property$50000 Total Loan amount$440000 LVR %89.80% Purchase costs$21370 Stamp duty – Transfer of Land Registration fee – Transfer of Land$1247 Solicitor/conveyancer fee$1500 Rates and land taxes (estimate)761.6 Pest inspection (estimate)N/a Building inspection (estimate)N/a Borrowing costsN/a Application/establishment fee Valuation feeN/a Security admin feeN/a LMI$9430 Registration of mortgage$121.40 Discharge/Release of mortgage feeN/a Search feesN/a OtherN/a Total purchase and borrowing costs$524430 Document classification: ConfidentialPage81of128
Funds to complete PURCHASE AND LOAN COSTS:A V A I L A B L E F U N D S : Purchase price:$490000Deposit if already paid to agent:N/a Lender application/valuation fees:N/aCash savings:$82000 Stamp duty payable―Transfer of Land$21370Sale proceeds:N/a Registration fee - Transfer of Land$1247 Registration of mortgage―Land Titles Office$121.40Gift:N/a Solicitors fees:$1500FHOG:N/a Other761.6Other:N/a Lenders mortgage insurance― added to loan $9430Other:N/a TOTAL COSTS(A):$524430TOTAL OWN FUNDS(D):$82000 LOAN AMOUNT REQUESTED(B):$449430OWN FUNDS REQUIRED(A–B) = C:$75000 OWN FUNDS REQUIRED(A–B) = C75000SURPLUS/SHORTFALL(D–C)$7000 (surplus) Assessor feedback for Task 17―Completing the fact find (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage82of128
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Task 18 — Assessing the clients’ situation Based on the information gathered in the initial client meeting with Philip and Jennifer Brown (see Case Study 1) and any other online tools used, you now need toassess theclients’ loan application, paying particular attention that you have met regulations, legislative requirements, followed industry codes of practice, and met lender credit policy. Provide data to support your comments and conclusions. Note:You will need to use thisassessment of the clients’ needsto completePart 2 ofyourOral Project. Task 18: Question 1 Assume you have conducted your initial face-to-face meeting and have provided and sought the necessary information from your clients. Explain a minimum of three (3) regulatory and legislative requirements that you have met so far in dealing with this application. Include the documents you would have provided to the client in the initial meeting. Note: You arenotcharging a fee for service to your client. (30 words) Student response to Task 18: Question 1 Answer here Three regulatory and legislative requirements are: Australian Securities and Investment commissions Australian Prudential Regulation Authority The National Consumer Credit Protection Act, 2009 The documents provided to the clients in the initial meeting are: Documents contain loan details including lenders name. Details of property required for collateral. Document containing amount of loan including interest rate. Loan application form. Task 18: Question 2 As part of assessing the clients’ situation, a broker is required to determine the approximate cost of LMI. (a)Will Jennifer and Philip be required to pay LMI and why or why not? (b)If so, what would the premium be? (c)What two (2) options are available to borrowers to pay the LMI fee? (40 words) Hint/Tip: The calculators are located intheToolbox. Also, for the purposes of this project, you may use the LMI premium excluding stamp duty. Student response to Task 18: Question 2 Document classification: ConfidentialPage83of128
(a)Answer here Yes, Jennifer and Philip need to pay LMI because their LVR ratio is more than 80%. The LVR ratio of couple is 89.80% (b)Answer here The amount of LMI premium excluding stamp duty is $9430. (c)Answer here The two option available to borrower for the payment of LMI fees is: 1.Payment from own fund. 2.Capitalize into loan amount. Document classification: ConfidentialPage84of128
Task 18: Question 3 In the previous question you used the Genworth LMI calculator to work out the LMI premium for Philip and Jennifer Brown. There are other helpful tools located on the Genworth site that can assist you with the preparation of a loan application. On the Genworth website, under ‘Tools’, select the appropriate calculators to complete the following: (a)What is Philip and Jennifer’s maximum loan amount according to Genworth serviceability calculation? (b)What is their combined total gross and net incomes? (c)What is the proposed monthly loan repayment, based on the actual interest rate?(Tip: capitalise the LMI cost onto the loan amount.) (30 words) Student response to Task 18: Question 3 (a)Answer here As per the Genworth Serviceability calculations, the maximum amount of loan for the Philip and Jennifer is $449430 i.e., $440000 is of loan amount and $9430 is of LMI premium fees which is capitalized in loan amount. (b)Answer here The combined total gross and net income of both Philip and Jennifer is $153000 and $118000 i.e., $153000 - $35000. (c)Answer here The proposed monthly loan repayment based on the 4% interest rate on the loan amount of $449430 will be $2145.65. Task 18: Question 4 Based on what they have disclosed to you, does the client have the capacity to meet the deposit and total cash contribution required for the property purchase?Explain why or why not. (30 words) Student response to Task 18: Question 4 Answer here Yes, the client have the capacity to meet the deposit and other cash contribution required for the property. It is because after meeting all the cost the client have the final surplus of $7000. Task 18: Question 5 What is the security offered for this loan? Is it an appropriate type of security? If so, explain why or whynot.(30 words) Student response to Task 18: Question 5 The property purchased by the couple itself is the security for this loan. No, the property is not the appropriate type of security because the value of the security is less than the loan amount after capitalising LMI that is, 490000 is less than 449430. Document classification: ConfidentialPage85of128
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Task 18: Question 6 Prior to submitting the application, you are required to obtain a valuation on the property. For the purposes of the project, the broker is to arrange thevaluationof the security prior to submitting the loan application. (a)Complete the template below and prepare a letter to instruct the valuer to conduct a valuation for Philip and Jennifer Brown. (b)One completed and submitted, how and where would you file this for future reference? (Consider correct document policies and procedures including legislation and security.) Student response to Task 18: Question 6 (a) To: valuer From:Broker1@CCF Subject: Instruction as to property valuation It is to inform you that Philip and Jennifer are interest in buying their first home at Wentworth Lane, Thomastown VIC and are seeking for the home loan for which they need to provide their home as a security for the loan. Therefore, you are requested to perform valuation of the property they are interest in, so that their further loan proceedings can be undertaken. Looking forward for your reply. Property Valuation Request Broker detailsNameContact details Jones and Co(03) 8281 1382 Client nameLoan typeLoan amount Philip Brown and Jennifer Brown Home Loan$440000 Loan purpose PurchaseRefinanceConsolidationEquity release Property type ResidentialCommercialVacant landLand and construction Property address: Unit 1, 92 Golf Links Way, Bundoora VIC 3083 Title details Volume: 10015 Folio: 326 Folio identifier: Volume / Folio number #1 Description Year of construction10 years Number of bedrooms2 Document classification: ConfidentialPage86of128
Number of bathrooms 2 Car accommodationYes Other roomsKitchen Other featuresWell furnished and located at the posh area of the suburb Victoria. Property value Purchase price $$490000Date of contract 16 / 12 / 2021 or Land purchase price $ Building contract $ Refinance―estimated value range From $ To$ Property use Owner occupied Investment Holiday rental Rental income Rent per month $.00 Actual/Proposed Valuation type: Full valuation: Kerbside: Desktop: (b)All the documents received from the client will be stored both in physical form and in soft copy as well. The policies and procedure of the broking and lending firm has been designed in a way which fulfils the requirements of the Privacy Act. The software within which the information will be stored would be a password protected one to ensure that there will be no information leakage in the hands unwanted individuals. Task 18: Question 7 After considering the client's financial position, what loan amount would you recommend, and why? (30 words) Student response to Task 18: Question 7 Document classification: ConfidentialPage87of128
Loan amount of $390000 or less would be recommended to ensure that the loan application would get approved because lenders are interest in those proposals that are having 80% or less LVR. Task 18: Question 8 What is the likelihood that the clients will be able to meet all of their financial obligations once the loan isinplace?(30 words) Student response to Task 18: Question 8 After getting the loan, there are 100% chances that the client will be able to meet their all financial obligations because the total income earned by Philip and Jennifer is $7917 + $4833 = $12750 per month. Out of this earning they are required to make payment of their monthly living expenses of ($35000 / 12) $2917, towards monthly payment obligations on Philip's personal loan that is $180 per month and at last they need to make payment of 3% of their credit card limit as a minimum monthly commitment which comes to $120 and $150 per month for Philip and Jennifer respectively. Therefore, monthly savings of the couple is $12750 – 120 – 150 – 180 - 2917 = $9383. If the couple will choose monthly repayment option, then the obligation would be amounted to $2101 @ 4% per annum for the loan amount $440000 which could be easily met out of $9383 savings per month. Task 18: Question 9 Under Responsible lending requirements, brokers also need to consider foreseeable changes in a client’s financial position. What issues may impact the clients’ ability to meet their financial obligations, including any possible risks, now or in the future?(40 words) Student response to Task 18: Question 9 Issues such as risk of higher interest rate in the market when the client choose for variable interest rate option and risk of losing job may affect the client's ability to meet their financial obligations now or in the future. Also, the changing value of the property is a big issue for the client and may affect their financial position. Task 18: Question 10 Most lenders stress test home loan repayments by adding a 3.0% buffer to the interest rate to make sure the borrower can afford the repayments over the medium term. If interest rates increased by 3.0%, what would Philip and Jennifer’s loan repayments be, and doyou think they would beable to cope with the extra repayment amount?(50 words) Student response to Task 18: Question 10 If the interest rate would increase by 3%, then the rate will be current interest rate + 3% = 4% + 3% = 7%. At this rate, the repayments of Philip and Jennifer would be $2927 per month. Yes, the couple would be able to cope with the extra repayment amount as their savings per month after deducting for their living expenses and recurring debt obligations towards credit card and personal loan is $9383 which is sufficient for them to make extra and higher repayments on account of increasing interest rates. Document classification: ConfidentialPage88of128
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Task 18: Question 11 (a)Identify appropriate product options you can present to the clients that may remove this interestrate risk? (b)What advantage would this type of product provide for the customer? (50 words) Student response to Task 18: Question 11 (a)To remove interest rate risks, Client can opt for fixed interest rate loan to avoid risk of higher or extra repayments. Also, Interest rate derivatives such as interest rate swaps can be used by client to remove the interest rate risk which is helpful in heldging their position and safeguard themselves from this risk. (b)The advantage of opting for fixed interest rate loan is that there would be less payment of interest at the time of higher interest rates in the market as the rate applicable would be the same prevailing at the time loan has been taken. Assessor feedback for Task 18 — Assessing the clients’ situation (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage89of128
Task 19 — Presenting borrowing options and potential benefits Task 19: Question 1 Although Philip and Jennifer (Case Study 1) are looking to borrow at approximately 90% LVR, what other options may be available to them that would avoid the cost of LMI? Provide at least three (3) options. (100words) Student response to Task 19: Question 1 Options available to Philip and Jennifer to avoid the cost of LMI are as follows: The cost of LMI could be reduced by saving a larger portion for the deposit which would result in getting lesser amount in terms of loan amount which results in lower LVR. For this 20% of the property value must be there to have 80% of LVR which results in no payment of LMI. By getting a guarantor for the loan, client can avoid the cost of LMI. Qualifying for the first home loan deposit scheme also allows for avoiding the cost of LMI as it is backed by federal government. Task 19: Question 2 Describe the First Home Owner’s Grant or home buyer assistance scheme benefits and stamp duty concessions that are available in the state where Philip and Jennifer are purchasing their home. Are Philip and Jennifer eligible for any assistance? Explain why or why not?(100words) Student response to Task 19: Question 2 $10000 is a financial assistance provided under FHOG scheme on buying new home in Victoria. Stamp duty exemption is available on property valued less than $600000. Yes, Philip and Jennifer are eligible for this assistance because they are buying home for the first time where property value is less than $750000 and purchase price is not more than $600000. They are above 18 years and also an Australian citizen. Task 19: Question 3 Philip and Jennifer have called to discuss an issue in relation to the product option you have proposed. They are wondering whether it would be better to 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 address the issue raised and still 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. (150words) Student response to Task 19: Question 3 Document classification: ConfidentialPage90of128
(a)The options available are as follows: Fixed rate home loan products having all the features of the currently proposed loan. Using interest rate derivatives such as interest rate swaps which allows for paying interest on a variable rate loan in to a fixed cost. It is done by facilitating exchange of interest payment between the borrower and lender. This allows for coping with the issue of interest rate risks and meeting the needs of the client as well. (b)Advantages of fixing a loan are: Fixed rates are safer in a dynamic environment where the market is highly volatile and constantly fluctuating. It allows for certainty of payment where the borrower need not to worry about how much they have to pay. Disadvantages of fixing a loan are: with the fall in the interest rates in market, there is no benefit for the borrower who have obtained loans on fixed rates. Fixed interest rate are generally fixed at high by the lenders to allow them to cope up with the falling interest rates in the market. Document classification: ConfidentialPage91of128
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Task 19: Question 4 What other option/s can you suggest if Philip and Jennifer remain uncertain about whether to fix the rate on their loan?(100words) Student response to Task 19: Question 4 There are various options available for Philip and Jennifer to overcome the interest rate risks: Buying interest rate futures where future contracts available on government bonds are bought to hedge the position by locking in a particular interest rate. It would also be suggested to them to increase their additional repayments, so that their loan could be repaid earlier and the long term risk associated with the interest rate could be minimised. Task 19: Question 5 You want to ensure that Philip and Jennifer have all the critical insurance protections in case something unfortunate happened to one of them. (a)What process would you follow during your discussion with the clients to ensure you have a good assessment of their needs?(50 words) Student response to Task 19: Question 5(a) The process that would be followed is: Outlining the summary of the proposed loan. Briefing the summary of the client's financial position. Evaluating the options to ensure that how it would be helpful for the client in meeting their needs. Finally recommending the option and stating reason for which it has been suggested. Inviting questions from client to resolve their queries and seeking their agreement for further proceedings. (b)Explain who you should refer Philip and Jennifer to obtain advice on these types of products.(10 words) Student response to Task 19: Question 5(b) Financial market experts, competitive lenders, mortgage brokers and financial consultants could be referred to for obtaining advice on such types of products. Assessor feedback for Task 19 — Presenting borrowing options and potential benefits (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage92of128
Task 20 – Supporting the client to settlement Although a broker does not participate in the settlement process, they still need to remain in touch with all of the stakeholders until the loan settles. Task 20: Question 1 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 20: Question 1 The broker has a very important role in getting loan approved from the lender and acts on behalf of the client. They are meant for providing assistance at each and every step of the lending process despite not required to get actively involved at all the stages. They help with their knowledge and experience of how to deal with the lending process to their customers. When broker is informed about each aspects of the lending process, many issues and difficulties that are likely to arise could be avoided to a great extent as they are able to advice and suggest on various matters associated with the loans processing. Task 20: Question 2 The 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. (a)To improve your service delivery standards and ensure you are communicating effectively with Philip and Jennifer for the remainder of your interactions with them, you thought this was an appropriate time to review your client service standards. Refer to the ‘Example of an organisation’s policies and procedures’ document in the Toolbox under the section ‘client service standards’. What evidence would you consider in your review of the service delivery standards? (b)Considering organisational policy and procedure, how would you document the improvements and to whom in your organisation might you submit your review of the standards? (100 words) Student response to Task 20: Question 2 (a)At the first hand, needs analysis has been done to ensure that the loan sought is not unsuitable for the client. The broker has made inquiries related to Philip and Jennifer’s financial situation, needs and objectives. The monthly obligations that the client needs to meet seems to be supported by the client's ability to save on a monthly basis. The service standards must satisfy the requirement of the ASIC. (b)The documentation of the improvements will be done via mailing facility where a mail consisting of all the recommendations needed for the improvements in organisational policies and procedures will be mailed to the credit manager of the organisation. Assessor feedback for Task 20―The loan approval and settlement process Document classification: ConfidentialPage93of128
(Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage94of128
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Case study 2: Mary Azacca Case study 2 for Mary Azacca is located in your subject room in KapLearn. Document classification: ConfidentialPage95of128
Task 21―Case study 2: Refinancing a home loan One of your clients, Adib Bursal, who has used your service for several years, has referred a work colleague who is considering their options to refinance their loan. The colleague’s name is Mary Azacca. The initial meeting with Mary was conducted over Zoom. Following the meeting, Mary forwarded basic information and documents sufficient to prepare a preliminary assessment. Task 21: Question 1 A preliminary assessment is a document prepared by the broker and given to the borrower upon request. However, before the assessment is prepared, the broker must have a comprehensive idea of what the client requires. To collect the information necessary to prepare a preliminary assessment, refer to case study 2 for MaryAzacca and complete the following tasks. (a)Using the client information collection tool/fact finder, complete: –assets and liabilities –needs analysis –anticipated fees and charges –funds to complete. Student response to Task 21: Question 1 Document classification: ConfidentialPage96of128
Client information collection tool/Factfinder Appointment date:15 december 2021 Appointment time:11:50 am Applicant 1 SurnameJONES Other namesMARY Contact detailsAddress8 North Road, Rockingham WA 6168 Phone (W) Phone (H) 732459876 Mobile733459876 EmailMaryjones.123@yahoo.com EmploymentNursing unit Manager How long?18 years Previous employer (if less than two years)Answer here How long?Answer here Employment type (FT/PT/casual/self-employed)(full time/shift work) Gross income (p.a.)$95,000 p.a. Net income (monthly)$7,917 Number of dependants0 Motor vehicles: make/model/year/value $ Holden Commodore SS 2007 = $25,000 Nissan Qashqai 2019 = $25,000 Indian Scout Motorcycle 2018 = $18,000 Loan purposeLoan refinancing Purchase price/Valuation$550,000 Deposit on property$20,000 Loan amount$330000 Borrowing capacity (using Genworth serviceability calculation) PASS (On the basis of data entered pertaining to Mary's financial condition it has been found that she met the Genworth's ) Document classification: ConfidentialPage97of128
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Assets and liabilities AssetsL i a b i l i t i e s DetailsMarket valueDetailsMonthly paymentsAmount owing Owner occupied property at:$550,000Mortgage with:$2,292$330,000 Investment property at:Answer hereMortgage with:Answer hereAnswer here Cash at bank (includes fixed deposits) Western Bank savings account Western Bank term deposit $24,000 $10,000 Car leasingAnswer hereAnswer here Other cash (includes offset accounts)0Personal loans 1. 2. Answer hereAnswer here Deposit paid on property (only if paid)$20,000OverdraftAnswer hereAnswer here Motor vehicles: 1. Holden Commodore SS 2007 2. Nissan Qashqai 2019 3.Indian Scout Motorcycle 2018 $25,000 $25,000 $18,000 Other loans: 1. 2. Answer hereAnswer here Personal effects$115,000Credit card limit: $5,000 $150$700 Business value (if self-employed)0Credit card limit: Answer here Answer hereAnswer here Shares and investments$15,000Other:Answer hereAnswer here Superannuation — HESTA$480,000Other:Answer hereAnswer here Other assets (give details)Other:Answer hereAnswer here Total assets $1282000Total liabilities$2442$330700 Surplus/deficiency: (Total assetslessTotal liabilities) $951300 Document classification: ConfidentialPage98of128
CURRENT MONTHLY LIVING EXPENSES (Provide a breakdown of the total amount listed in the case study — use your discretion) Food/housekeeping500 Insurance (e.g. motor vehicles, home contents/ building, medical, life/income protection)700 Utilities (e.g. rates, gas, electricity, transport)200 Transport (e.g. public transport, petrol, registration, repairs)300 Education(e.g. school, college, university)0 Dependants support (e.g. childcare, child maintenance)0 Entertainment (include online subscriptions, e.g. Netflix/Stan)200 Other (detail below):433 MONTHLY LIVING EXPENSES$2333 Document classification: ConfidentialPage99of128
Needs analysis 1Name of your current lender?Simply Home Loans 2What type of loans do you have?Mortgage loan – at variable interest rate 3Why did you choose this particular loan and lender?To finance home buying and in the scenario of falling interest rates, variable rates have been chosen. The lender has been chosen due to its popularity across the financial and mortgage industry. 4What is the interest rate on your current loan?4.80% p.a. 5What are your payments?Amount$2,292 6Frequency12 times (monthly) 7Do you know the fees and charges?No 8What is your proposed purpose for the new loan you are applying for?To make additional repayments without incurring penalties. Fortnightly repayment option, redraw facility and accessing fund through card. Also, to get packages loan product, so that monthly payment of fees and charges could be avoided. 9Branch access available with current lenderYes. Document classification: ConfidentialPage100of128
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10Internet banking available with current lenderNo. 11Phone banking available with current lenderNo. 12Lenders not to be consideredAnswer here 13Type of loan soughtpremium option home loan features 14Preferred interest rate rangevariable interest rate (4.0% p.a.) 15Payment frequencyfortnightly repayment option 16RedrawYes 17OffsetYes 18Salary creditingYes 19Low fees and chargesYes Assessor feedback for Task 21 ― Refinancing a home loan: Gathering information (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage101of128
Task 22―Preparing a preliminary assessment Preparing a preliminary assessment is required under the NCCP Act. In this task, you are required to prepare a preliminary assessment for Case study 2: Mary Azacca. Task 22: Question 1 Before preparing the preliminary assessment, under best interest duty, you need to assess if there is a benefit to the customer by switching loans. To determine if there is a benefit for the client you need to go to the MoneySmart website. Using the mortgage switching calculator, you need to: (a)provide the result using the calculator (b)explain if the customer will benefit from switching lenders. The MoneySmart link can be located in the Toolbox. (50 words) Student response to Task 22: Question 1 (a)By switching loan, if minimum repayments are made of $1831 per month, then the customer will benefit from saving $40346 ($146 per month) throughout the life of the loan. Further, if higher repayments of $1977 per month are made after switching the loan it would be equivalent to the minimum repayments made for the current loan. As a result, the customer will save $62701 ($257 per month) over the life of the loan. Also, loan would be paid off earlier by 31 months. (b)Yes, the customer would get benefited by paying loan earlier and saving minimum of $146 and maximum of $257 per month throughout the life of the loan. Task 22: Question 2 Will Mary be required to pay LMI? Explain why or why not.(20 words) Student response to Task 22: Question 2 No, Mary need not required to pay LMI as it is needed when there are chances of making default on loan repayments and the amount that the lender can recover out of selling the security is lower than the amount borrowed or outstanding. However, the value of property that has been occupied by Mary itself is much higher than the loan amount and it is being expected by Mary that the value of house property is likely to go higher in future where the house is existing now. Task 22: Question 3 Using the information gathered from your customer, Mary Azacca, you are required to prepare the preliminary assessment. Part of the preparation will require you to use a home loan comparison website and use that information to prepare the preliminary assessment below. Document classification: ConfidentialPage102of128
Preliminary Assessment Student response to Task 22: Question 3 Applicant 1 Full name (Client 1)Mary Azacca REQUIREMENTS AND OBJECTIVES Reasons for seeking credit or reviewing an existing contract, and the resulting benefitThe reason for seeking credit is to refinance the existing loan, to review the existing contract is to avoid any payment of monthly fees and charges. The resulting benefit would be saving minimum amount of $146 and maximum amount of $257 on a monthly basis along with making repayments in less time. Specific features requested, and any risks or costsRisk in terms of interest rate is possible as it could go higher making the loan quite costly affair. Some specific features requested are as follows: Redraw facility Offset account Access to funds through card Making additional repayments without incurring penalties. MONTHLY FINANCIAL POSITION CurrentProposed Total monthly after tax income:(A)$7917$7917 Total monthly repayments:(B)$150 + $2292 = $2442$150 + $2000 = $2150 Total monthly living expenses:(C)$2333$2333 TOTAL MONTHLY NET SURPLUS (A-B-C)$3142$3434 Foreseeable material financial changes, and resulting plan to meet the ongoing obligations RECOMMENDED PRODUCT PARTICULARS PRODUCT 1PRODUCT 2PRODUCT 3 Lender’s nameVictorian Mortgage groupChoice CustomChoice Lend Loan product:Home loan refinancingPremium option home loan features Standard packaged loan Loan Amount:$330000$330000$330000 Term in years252320 Monthly repayments$1788$1921$2000 Document classification: ConfidentialPage103of128
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CONFLICT OF INTEREST DISCLOSURE: Has any conflict of interest which may disadvantage the client been identified in relation to the recommended product? No. SUITABILITY: I consider that based on the information provided by the client and further enquiries that the loan proposal is ‘not unsuitable’ for the client. Indicate yes or no and provide supporting comments. Yes, on the basis of information obtained from client and other enquiries made for the purpose of ensuring that the loan is not unsuitable, the loan product is best suited to the needs of the client due to the following reasons: It provides for additional repayment facility along with the option to switch on to fortnightly repayments. It provides for redraw facility and access to funds through cards. The product has no service charge on a monthly basis and also provides for lower variable interest rate that is 4% per annum Against 4.8% per annum. Accordingly, the recommended loan options and products are meant for lowering overall expenses associated with the loan for the client. Task 22: Question 4 Of the three loans recommended in the preliminary assessment, which loan product would you recommend to Mary, and why?(30 words) Student response to Task 22: Question 4 Standard packaged loan would be recommeded to Mary out of the three loan products mentioned above because it provides with the combination of all the facilities and features such as variable lower interest rate per annum, redraw facility, fund accessing through cards and additional repayment option without incurring any penalties. In addition to this, no monthly servicing charges would be there after making one time payment while applying for the loan. This lump sum charges borne by the customer at time of applying for loan is also very minimum. Task 22: Question 5 Does Mary qualify for any government concessions or stamp duty reductions? Explain why or why not.(20 words) Student response to Task 22: Question 5 Yes, Mary is qualified for government concession in terms of family home guarantee which is designed to support single parent purchasing their first home. This concession is available through first home buyer having less than 160000 income per annum is not required to pay any duty while purchasing their first home. Task 22: Question 6 What other issues may impact, now or in the future, on the Mary’s ability to meet her obligations, includingany possible risks?(30 words) Document classification: ConfidentialPage104of128
Student response to Task 22: Question 6 Issues may be associated with the adoption of variable interest rate for the loan as it may happen in the future than the interest rate would go higher which results in making higher monthly payments. Also, if Mary would go for making additional repayments on a fornightly basis, then she fall in financial crisis as her monthly savings are quite low and this could swiped off with the increase in interest rates in future. Therefore, there is a possibility of interest rate risks which may affect Mary's ability to meet her obligations. Task 22: Question 7 You are required to present your analysis and recommendations to your client. On this occasion you will make your presentation in an email. You will gather some of the information from your preliminary assessment and you will also need to include the following information. •Provide a brief summary of your understanding of the clients’ needs (this could be an outline summary of their proposed loan structure). •Provide a brief summary of the clients’ current financial position (use information from the case study). •Give an explanation of the product options evaluated that meet their needs (you should have researched at least three (3) lenders as part of the preliminary assessment) and details of the loan features. Use the internet or, if working in the industry, internalsoftware to do this. •Explain the option you recommend and the reasons for the recommendation— including the loan amount, term and repayments. Explain how the recommended product meets the clients’ needs (referto the case study) •Invite questions from the client and respond in a follow-up email accordingly. •Seek agreement from the client to proceed with the product recommendation. (200 words) Student response to Task 22: Question 7 Document classification: ConfidentialPage105of128
To: Mary Azacca From: broker1@CCF&MB.com.au Subject: Recommendation for a home loan refinancing options Dear Mary, With regards to the meeting conducted over zoom and preliminary assessment prepared on the basis of information and documents provided from your side, we have better understand your need which has been summarised as follows: The loan product as provided by the Choice Lend is best as per your requirements because it provides you with all the facility as requested by you such as redraw facility, additional repayments without any penalties or charges and the interest that would be charged @4% per annum will be variable in nature which get changed with the market conditions within the Australian economy. Also, the loan of $330000 will be available for and can be repaid within the duration of 20 years where facilities such offset account and fund accessibility via card are also available. Further, the monthly repayment would be $2000 which is highly supported by your financial situation. The loan options recommended here after taking into account the monthly repayment of $150 towards credit card commitments, annual and monthly living expenditure of $28000 and $2333 respectively. Also, the property or security value is moving upward and expectation in future is similar to the current trends. Further, Your yearly and monthly gross income has been taken into account while calculating monthly repayments that is required to be made for this loan. During preliminary assessment, three products have been identified by taking into account your needs and financial situation, where the first one named as home loan refinancing will provide for 25 year term loan with a combination of fixed + variable interest rate of 4.25% per annum, the second option known as Premium option home loan features will provide for variable interest rate of 4.5% per annum for the period of 23 years and the last lender is providing for 20 years term loan with a package of numerous features by charging variable interest rate of 4% per annum. The first option will have lowest monthly obligation while the third one has the highest monthly obligations due to differing time element. We request and are ready to answer your queries. If you are agreed with the terms, conditions and features of the loan option recommeded here, then please allow us for further proceedings. Thank You CCF&MB Document classification: ConfidentialPage106of128
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Task 22: Question 8 Mary has responded to your email asking some questions. To: Broker 1 Broker1@CCF&MB.com.au From:mary.azacca@gmail.com Re: Recommendation Dear broker, Thank you for providing your recommendation for the home loan product for my refinance application. I have some questions I am hoping you can answer for me: 1.I want to open a bank account to make sure there is somewhere for any disbursement of surplus funds from the refinance settlement and also for my periodical payments to be debited from. What options do I have to apply to open a bank account? 2.What ID will I need to provide to open a new bank account? I look forward to receiving your reply. Thank you. Mary Azacca Send a reply email to Mary to answer her questions. (100 words) Hint/Tip: You will need to conduct your own research to answer this question. Refer to the Toolbox for a suggested website. Student response to Task 22: Question 8 FWD: To: Mary Azacca mary.azacca@gmail.com From: broker1@CCF&MB.com.au re: Recommendation With regards to your concern regarding opening a bank account in order to endure periodical payments and parking of surplus funds towards refinance settlement, there are following two options available with you: firstly you could open a saving account from which your monthly repayment amount will be debited in the beginning of each period and also further debiting could be done on your request to facilitate additional repayments. Secondly, you could have a saving account from where your monthly obligations could be debited along with a recurring deposit account option that you could opt for in order to park your surplus funds on which interest @ 4.7% per annum will be provided by the lender for each month on a proportionate basis. Through this RD account, you will be able to make additional repayments as and when you desire. A photographic ID will be required that is, Australian Driving License or any equivalent ID to open your bank account. Looking forward for your positive response in future. Thank You Document classification: ConfidentialPage107of128
Task 22: Question 9 In the course of your interactions with Mary, you have gathered or completed a number of documents, which include, for example, the completed fact find with credit representative notes, the preliminary assessment and assorted communication with her. How and where would you file this information? (30 words) Student response to Task 22: Question 9 All the information associated with Mary will be kept in safe and secure manner by keeping in mind the requirements of Privacy Act. All this information will be both in physical form in the locker of the lender and a copy of these documents and information will be retained and stored in the broker's locker. Also, all these documents and information will be available in a password protected software of the lending and broking firm. Assessor feedback for Task 22―Preparing a preliminary assessment (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage109of128
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Case study 3: Ravi & Alice Patel Case study 3 for Ravi & Alice Patel is located in the subject room. Document classification: ConfidentialPage110of128
Task 23―Case study: Purchasing an investment property Ravi and Alice Patel have approached you to arrange finance to purchase an investment property. Theclients have already paid the 10% deposit, so you will need to act fast as they need to settle in 60days. Following the initial meeting, the clients have provided all of the essential documents to prepare a loan submission. Task 23: Question 1 To commence the process, you need to enter the information collected into your aggregator’s CRM system. This will include: (a)client information collection tool/fact finder (b)assets and liabilities (c)needs analysis (d)credit representative notes (e)anticipated fees and charges (f)funds to complete. Student response to Task 23: Question 1 Document classification: ConfidentialPage111of128
Client information collection tool/factfinder Appointment date:Student to insert date Appointment time:Student to insert time Applicant 1Applicant 2 SurnamePatelPatel Other namesRaviAlice Contact detailsAddress12 Mascot Street, Lidcombe NSW 214112 Mascot Street, Lidcombe NSW 2141 Phone (W) Phone (H) (02) 9784 0454(02) 9784 0454 Mobile0419 456 123(02) 9741 1254 EmailRavi@jayzar.com.aualicep@elitestyle.com.au EmploymentSelf employedPart time How long?15 Years25 Years Previous employer (if less than two years)NoNo How long?00 Employment type (FT/PT/casual/self-employed) Gross income (p.a.)$50,000$45,000 Number of dependants22 Motor vehicles: make/model/year/value $ $65,000$65,000 Loan purposeBuying home Purchase price/valuation$660,000 Deposit on property0 Loan amount$715,000 Document classification: ConfidentialPage112of128
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Assets and liabilities AssetsL i a b i l i t i e s DetailsMarket valueDetailsMonthly paymentsAmount owing Owner occupied property at:$1,300,000Mortgage with: Answer here Investment property at:Answer hereMortgage with:$1800$450,000 Cash at bank (includes fixed deposits)37500Car leasing00 Other cash (includes offset accounts)0Personal loans 1. 2. 00 Deposit paid on property (only if paid)0Overdraft00 Motor vehicles: 1. 2. $65,000Other loans: 1. 2. 00 Personal effects household effects $140,000Credit card limit: Answer here $5,000$800 Business value (if self-employed)143000Credit card limit: Answer here 00 Shares and investments0Other:00 Superannuation Applicant 1: Applicant 2: $300,000 $120,000 Other:00 Other assets (give details): Answer here $48,000Other:00 Total assets2010500Total liabilities6800450800 Surplus/deficiency: (Total assetslessTotal liabilities) $1559700 Document classification: ConfidentialPage113of128
CURRENT MONTHLY LIVING EXPENSES (Provide a breakdown of the total amount listed in the case study — useyour discretion) Food/housekeeping25000 Insurance (e.g. motor vehicles, home contents/ building, medical, life/income protection)2000 Utilities(e.g. rates, gas, electricity, transport)5000 Transport(e.g. public transport, petrol, registration, repairs)7000 Education(e.g. school, college, university)5000 Dependants support(e.g. childcare, child maintenance)6000 Entertainment (include online subscriptions, e.g. Netflix/Stan)2000 Other (detail below):5000 MONTHLY LIVING EXPENSES55000 Document classification: ConfidentialPage114of128
Needs analysis 1Name of your current lender?Penrith Mutual Home Loan 2What type of loans do you have?Home loan 3Why did you choose this particular loan and lender?This loan will be eligible to sum the entire loan amount and also the repayment is in easy affordable intallments. 4What is the interest rate on your current loan?4.7% 5What are your payments?Amount4056 6FrequencyMonthly 7Do you know the fees and charges?Yes 8What is your proposed purpose for the new loan you are applying for?Buy home 9Branch access available with current lenderYes 10Internet banking available with current lenderYes 11Phone banking available with current lenderYes 12Lenders not to be consideredYes 13Type of loan soughtHome loan 14Preferred Interest rate range4% to 5% 15Payment frequencyMonthly 16RedrawNil 17OffsetNo 18Salary creditingNo 19Low fees and charges1500 Document classification: ConfidentialPage115of128
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Credit representative notes Note:Providing substantive notes here is a compulsory part of your assessment. The house property need to be provided in order to secure the loan. This is like a guarantee against the loan is taken from the bank. In case of the home loan guarantee is always require in against to approach the home loan. Document classification: ConfidentialPage116of128
Anticipated fees and charges Anticipated purchase price$685,000 Deposit on property0 Total Loan amount$715,000 LVR %10 Purchase costs $660,000Stamp duty – Transfer of Land Registration fee – Transfer of Land Solicitor/conveyancer fee25000 Rates and land taxes (estimate)0 Pest inspection (estimate)0 Building inspection (estimate)5000 Borrowing costs1500 Application/establishment fee Valuation fee2500 Security admin fee500 LMI75000 Registration of mortgage5000 Discharge/release of mortgage fee7500 Search fees5000 Other3000 Total purchase and borrowing costs715000 Document classification: ConfidentialPage117of128
Funds to complete PURCHASE AND LOAN COSTS:A V A I L A B L E F U N D S : 25000 Purchase price:$660,000Deposit if already paid to agent:0 Lender application/valuation fees:2500Cash savings:37500 Stamp duty payable―Transfer of Land1787Sale proceeds:0 Registration fee―Transfer of Land1800 Registration of Mortgage―Land Titles Office3200Gift:0 Solicitors fees:25000FHOG:0 Other3000Other:420000 Lenders mortgage insurance Added to loan 2000Other:0 TOTAL COSTS(A):699287TOTAL OWN FUNDS (D):457500 LOAN AMOUNT REQUESTED(B):715000OWN FUNDS REQUIRED(A–B) = C:257500 OWN FUNDS REQUIRED(A–B) = C0SURPLUS/SHORTFALL (D–C)457500 Assessor feedback for Task 23 — Case study 3: Purchasing an investment property (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage118of128
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Task 24―Preparing a loan proposal After completing your investigation into what loan options are available, you are ready to proceed and prepare a loan proposal for the clients Ravi and Alice. During discussions with the clients, they have confirmed their willingness to cross-collateralise their owner-occupied property as equity to purchase the investment property. So, you have agreed to send them an email and propose two options to finance the investment property. Firstly, you are required to complete the credit proposal disclosure to attach to your email presentation. Credit proposal disclosure This document provides information on commissions and certain fees and charges the broker or other parties may receive in relation to the proposed loan or lease. Task 24: Question 1 You now need to complete a credit proposal. For this task you will need to use an online loan comparison website and to complete the template below. Lender information:The lender is paying an upfront commission of 0.65% of the loan amount and a monthly trail based on 0.15% of the loan balance. Student response to Task 24: Question 1 Customer(s) full name(s)Ravi Patel and Alice Patel Address12 Mascot Street, Lidcombe NSW 2141 Phone and email(02) 9784 0454 Proposed finance Interest rates and repayments may change if the lender changes its interest rate. Lender: Penrith Mutual home loan Split 1Purpose: buying home Finance amount:715000 Interest structure: Fixed Interest rate:4.7% Term:25 years Repayments:Monthly Other features Part payment and full settlement Split 2Purpose: Finance amount: Interest structure: Interest rate: Term: Repayments: Other features: Total loan amount$ 715000 Fees payable by you to us. These fees are payable by you. $ 2500 Document classification: ConfidentialPage119of128
Commission is payable for:2000 Commission payable by:1500 Commission payable to:Penrith Mutual home loan Reasonable estimate of commission:X% of the amount of credit limit shortly after the finance is provided. We estimate this to be $. X% per annum of your amount owing from time to time payable monthly. We estimate the largest monthly payment to be$. Estimate of total fees and charges payable to the financier in relation to applying for the finance. These fees are payable by you. Note: These figures are estimates only and the final figures will be shown in your credit contract or lease. Some (or all) of these fees may be paid from the finance proceeds. We are not aware of any other fees or charges payable to anyone else in relation to the application for finance, but the financier may impose some additional requirements. Application fee: Establishment fee: Lenders mortgage insurance: Valuation fee: Transfer duty fees Refinancing fees: Discharge fee: Other known costs Total $ 2500 $ 1500 $ 2500 $ 5000 $ 7500 $ 500 $ 1500 $ 2500 $ 23500 Document classification: ConfidentialPage120of128
Task 24: Question 2 Now that you’ve completed the credit proposal disclosure, you will need to write your email to the client. You must cover the following points, namely: •a summary of your understanding of the clients’ needs (this could be an outline summary of their proposed loan structure) •a brief summary of their current financial position (use information from the case study) •your explanation of the minimum of two (2) product options evaluated that meet their needs and details of the loan features (use the internet or, if working in the industry, internalsoftware) •the option you recommend and the reasons for the recommendation— including the loan amount, term and repayments;explain how the recommended product meets the clients’ needs (refer to the case study); and explain why you recommend this lender. •invite questions from the client and respond in a follow-up email accordingly •provide a section for the client to provide you with permission to proceed. (200 words) Student response to Task 24: Question 2 The client require a home loan to buy the new house property. The client own the stable financial position that will support the respective person to easily repay the entire loan amount. The fixed interest rate and the easy repayment practice will support the client. The loan own the affordable interest rate that will allow the borrower to conveniently pay the entire loan amount. Task 24: Question 3 Ravi has responded to your email asking some questions. To: Broker 1 Broker1@CCF&MB.com.au From: ravi.patel@jayzar.com.au Re: Recommendation Dear broker, Thank you for providing your recommendation for the home loan product for our refinance application. I have some questions I am hoping you can answer for us: 1.Can you please explain our rights for obtaining a written assessment. 2.Do you have to provide us with a comparison rate with your home loan product recommendations, and can you please explain the difference between the interest rate and the comparison rate? 3.We would like to negotiate the application fee or the interest rate for the product you’ve recommended. Can you please advise how much you can negotiate for either the interest rate or the application fee on our behalf? Thank you and regards, Ravi Patel Send a reply email to Ravi to respond to those questions. (100 words) Student response to Task 24: Question 3 Document classification: ConfidentialPage121of128
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FWD:To: Ravi Patel ravi@jayzar.com.au From:broker1@CCF&MB.com.au Re: Recommendation The right is to know all the information. The comparison rate is provided clearly. Negotiation is applicable over the application fees of the loan. The interest rate is fixed in nature which is not negotiable. Assessor feedback for Task 24 — Preparing a loan proposal (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage122of128
Task 25―Loan contracts and security documentation Task 25: Question 1 When checking the loan offer contracts received from the lenders, what key points should you check to ensure the documents are accurate? List a minimum of six (6) points.(20 words) Student response to Task 25: Question 1 All requirements of the form need to be submitted with proper doscuments. Task 25: Question 2 If there is a guarantor involved, what type of professional should you recommend the client refer their loan contracts to prior to signing and why is this so important? Include which code you would be adhering to in doing so.(20 words) Student response to Task 25: Question 2 The professional from the bank is admissible for this purpose. This is important to authorize the entire loan. Task 25: Question 3 The clients have chosen to sign their contracts with you, in your capacity as a broker. Describe how you would explain the loan offer and security documentation to the client, as well as gain confirmation of their understanding of approval conditions of their finance. Hint/Tip: Include the sections of the loan offer that you would cover in your explanation to the client. Refer to the topic notes and the sample Letter of Offer in the subject room. (100 words) Student response to Task 25: Question 3 The loan term and condition will disclose all the conditon related to the loan. The confirmatory via email will provide. Document classification: ConfidentialPage123of128
Task 25: Question 4 (a)Now that the client has signed the documents, explain how you will submit the documents to the lender. (b)Include a comprehensive list of the documents that the lender will require in order to proceed with settlement. This may also include lender-specific documents for the new loan account etc. (50 words) Student response to Task 25: Question 4 (a)The document will be submitted to the lender. The relationship officer hold the responsibility to collect the document and submit it further. (b)The document like check list, processing document and such other are need to submit. Task 25: Question 5 Explain to your client how you will communicate with them throughout the settlement process; include the method of communication and the timeframes.(This should be in line with the organisation service standards as outlined in the Toolbox.) (20 words) Student response to Task 25: Question 5 The email will be used to communicate about the loan. Task 25: Question 6 You have just received a call from the lender to advise the documents have been executed correctly. Describe how you will notify the client.(15 words) Student response to Task 25: Question 6 This is to inform that the documents are executed correctly. Assessor feedback for Task 25 — Loan contracts and security documentation (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage124of128
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Task 26―Preparing the loan for settlement Although a broker does not participate in the settlement process, they still need to remain in touch with all the stakeholders until the loan settles. Before the loan can settle the borrower needs to adhere to pre-settlement conditions. Task 26: Question 1 In the pre-settlement phase, there are items that need to be checked and satisfied. For each one, explain why it is required (i.e. what is the importance of each of item): (a)building insurance (b)independent legal advice. (40 words) Student response to Task 26: Question 1 (a)Building insurance need to verify and check. It is important and essential to hold. (b)This is done by the individual to provide the legal advice. Independent legal advice allow to support the authentic legal advice. Task 26: Question 2 Explain the settlement process to the client, include the personnel who are involved at each step. (100 words) Student response to Task 26: Question 2 The settlement process involve the complete settlement of the loan. The settlement involve the different individuals such as loan officer, collection agent, person taken the loan and such other individuals. The recovery of loan is very essential part and require all the stakeholders to involve in the process. The recovery agent will be involve in each individual stage part of the recovery process. The role of the various stakeholders is to support the proper recovery of the loan value. IN each step all these stakeholders will be a part of the process so that recovery can be done appropriately. Task 26: Question 3 Explain a minimum of four (4) examples of issues that can occur which may delay or prevent a settlement. (80 words) Student response to Task 26: Question 3 –Bank issue is a major challenge that causes to delay in settlement. –Property concern is also a major issue causes to delay in settlement. –The three day grace period. –Penalty interest being charged. Task 26: Question 4 Explain the steps in the process of registering security documentation.(50 words) Document classification: ConfidentialPage125of128
Hint/Tip: In addition to the topic notes, you may also be required to undertake your own research. Student response to Task 26: Question 4 Security documentation can be registered with the proper legal process. The ownership need to be claimed whole registering the security document. This is top be done with the proper use of the process that involve claiming the ownership, depositing fees that is required and carrying out all other process involve with the security document registration. Document classification: ConfidentialPage126of128
Task 26: Question 5 When the lender is ready for settlement, they will contact the borrower’s solicitor and inform them of the expected settlement date, and request details of funds to be distributed at settlement. The lender will then prepare a pre-settlement costing sheet and forward to the borrower’s solicitor in preparation for settlement. With the broker working closely with the borrower’s solicitor, when they receive a copy of the costing sheet, the broker can then make sure that all the particulars are correct. For this task you are required to prepare the following pre-settlement statement for the purchase of the investment property for Ravi and Alice Patel. Student response to Task 26: Question 5 Purchaser/s:RAVI AND ALICE PATEL Property:HOUSE Purchase Purchase price:$660,000 Less: Deposit paid0($) Subtotal$660,000$ Adjustments$25,000 Plus $30,000Council rates$ Less Amount due on settlement to vendor Disbursements0 Eastern Conveyancing0 Land transfer duty & fees0 Amount due on settlement from purchaser$715,000 Document classification: ConfidentialPage127of128
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Task 26: Question 6 You are now at the closing stages of the loan process with this client. (a)How and where do you file the information you have communicated with them? (b)Once the settlement concludes, what else would you do to ensure you communicate with this client effectively? (30 words) Student response to Task 26: Question 6 (a) The information can be found with the proper verification of the legal records and documents. The proper analysis will be done with the proper support of document verification and such other practices. (b) The communication be done effectively with the email and other mode of communication that involve phone call and such other techniques. Assessor feedback for Task 26 — Preparing the loan for settlement (Insert Feedback) Question(s) that need to be resubmitted (if required)(List question numbers) First submissionNot yet demonstrated Resubmission (ifrequired)Not applicable Document classification: ConfidentialPage128of128