Loan Application Process Assessment - AAMC Training Group

This assessment covers loan application process for finance or mortgage broking clients. It includes case study, report and written test. The case study involves preparing a loan file from initial contact with the clients to preparing the loan application for lodgement with the client’s lender of choice, through to settlement. The report should indicate the choice of loan product for the client and the information about the loan product that was presented to them. The assessment is conducted by AAMC Training Group.

Loan Application Process
Assessment cover sheet
In order for your assessment to be marked you must complete and upload all tasks
and this cover sheet via the AAMC Training Group portal. Your assessment tasks must
be uploaded in an electronic format i.e. Word, Excel, PDF or Scan. A maximum of five (5)
attachments (maximum 20MB each) can be uploaded for this assessment. Please see the
step-by-step instructions in your Member Area on how to upload assessments.
Student details
Course name
Assessment name Loan Application Process Assessment
Surname Given name
Address Postcode
Email
Phone Phone (other)
Current occupation
Industry Years in industry
When you upload your assessment you will be asked to confirm that your assessment submission to
AAMC Training is your own work and NOT the result of plagiarism or excessive collaboration, and that all
material used from any third party has been identified and referenced appropriately. AAMC Training may
conduct independent evaluation checks and contact your supervisor to discuss your assessment.
Checklist of attachments:
☐ Task 1 – Case Study ☐ A OR ☐ B
☐ Task 2 – Report/Written Test
☐ Task 3 – Report/Written Test
☐ Task 4 – ☐ A (Activity) and ☐ B (Short Answers)
Please indicate style of course undertaken:
☐ Face to face Trainer’s name:
☐ Correspondence ☐ Online
Once your assessment has been successfully uploaded it will be pending review with your
nominated course assessor. Your assessor will mark your assessment and you will receive an
email advising you if you have been assessed as satisfactory. If you are marked as not yet
satisfactory you will be contacted and asked to provide additional information or re-visit the
assessment and re-upload your amended case study or written tasks.
Please contact our head office if you need assistance with your assessment:
Office: [phone] Fax: [phone] Email: [e-mail]
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Loan Application Process
LOAN APPLICATION PROCESS ASSESSMENT
CREDIT TRANSFER
You may be able to claim credit transfer for a unit/s of competency that you have previously
completed with AAMC Training or another RTO. If you have been awarded a record of result
or statement of attainment for any of the units detailed below then please go to the Credit
Transfer tab in your Learning Centre and follow the prompts.
This assessment relates to the following units of competency:
 FNSFMB401 Prepare loan application on behalf of finance or mortgage broking clients;
 FNSFMB402 Identify client needs for broking services
 FNSFMB403 Present broking options to client
 FNSINC402 Develop and maintain in-depth knowledge of products and services used by
an organisation or sector
 FNSFMB501 Settle applications and loan arrangements in the finance and mortgage
broking industry
 FNSCUS501 Develop and nurture relationships with clients, other professionals and
third party referrers.
 FNSCRD301 Process applications for credit (this unit is only applicable to those
completing the Certificate IV in Finance and Mortgage Broking FNS40815 course).
Please refer to AAMC Training’s full Recognition Policy for further details.
IMPORTANT NOTES: AAMC Training only wants to see your own work. Please do not
upload blank assessment tasks or instructions on how to complete same. When this
extra information is uploaded it presents unnecessary work for the assessors and in turn
delays our assessment responses.
Task 1: You will notice that there are two options of Case Study within this assessment – the
first (A) is more specifically for Mortgage Brokers, the second (B) for brokers in the Plant &
Equipment and Motor Vehicle field. Please complete only the stream relevant to you
and indicate this on the assessment cover sheet.
Either the Mortgage Finance or Motor Vehicle Equipment Checklist must be submitted with the
fully completed assessment. This must encompass all documents from initial contact with the
clients until settlement of the loan. Documents must be submitted in a suitable logical order
and consist of all relevant NCCP documents.
The documentation required should be consistent for all submissions, however student
submissions will vary in regards to outcomes based on the interpretation of the data and
“client” responses during the interview process.
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Loan Application Process
Task 1: Case Study – Loan application preparation
You will notice that there are two options of Case Study within this assessment –
the first (A) is more specifically for Mortgage Brokers, the second (B) for brokers in
the Plant & Equipment and Motor Vehicle field. Please complete only the stream
relevant to you and indicate this on the assessment cover sheet.
Choosing only one of the case studies presented below, prepare a loan file from your initial
contact with the clients to preparing the loan application for lodgement with the client’s
lender of choice, through to settlement. Please refer to the document checklists in this Task
for the relevant steps required.
In completing this task, you need to demonstrate to your assessor that you are competent in
the following areas and able to:
 communicate ideas and information
 collect, analyse and organise information
 plan and organise activities
 work with others in a team
 use mathematical ideas and techniques
 solve problems by providing solutions
 use technology.
To do this you will need to compile a report (Client Needs Review/Fact Find) indicating your
thoughts and processes on different aspects of your application. These may include, but are
not limited to:
 the choice of loan product for your client and the information about the loan product that
you presented to them. Where you located the product information. Remember there is no
right/wrong answer to this area, it is always subjective.
 the use of technology to compare the product/fees, find information on the products etc.
 how you would work in a team situation with your co-workers, lenders, real estate agents,
mentor etc.
In areas where you do not have copies of actual supporting documentation, insert a page with the
name of the document you would include e.g. copy of driver’s licence for the client.
There are a number of templates in the Member’s Area under ‘Useful Resources’ that you
could use in your submission.
Remember there is no right or wrong answer as each client you see presents a new challenge
and if you can provide solutions for those challenges you will be well regarded and successful
in this industry.
Because this course is taken nationally, we ask that you localise addresses and
places of employment so that you can have familiarity with the assessment.
You will have to take into account any necessary adjustment of stamp duty
concessions for first home buyers. This will have to be considered when discussing
and setting out the fees and costs with your clients. You will have to contact your
Office of State Revenue to determine the correct amount of benefits to which your
clients are entitled.
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Loan Application Process
Case study A (Residential mortgage)
Background
Henry Leslie from Leslie Accounting Services has referred you his clients Frederick John and
Margaret Anne Everybody. He has mentioned that they are looking to purchase their first
home. Whilst in their early ‘40s, they have previously not owned a home due to the
husband being an engineer with the Australian Defence Forces. Because of this and
constant moving they really weren’t in a position to buy in one location. Frederick has since
left the services and has been working with BHP Billiton on their mining projects. This
entails working on a ‘two weeks on, one week off’ basis. Frederick enjoys an annual income,
paid monthly, of $115,000 with a subsidised rent when on location on the job.
Margaret works at the local council child care centre on a permanent/part time basis and earns
$29,000 annually, paid weekly. She is a qualified nurse.
They have two children. Joshua, 18, is employed fulltime, lives at home and pays $75.00
per week board. Melanie, 13, is in her first year at high school and is dependent on her
parents.
Currently the couple is renting in a suburb near you and paying $420.00 per week to the
local Ray White real estate office. Due to diligent saving and being beneficiaries of a family
deceased estate they find themselves in a sound financial position and ready to purchase
their own home and settle into one area. They are conscious of the current economic times
and wish to entrench their current situation by also considering future investment
opportunities.
One of the most important questions you will ask when completing your Client Needs
Review is about Risk Protection. Have the clients considered the ramifications of financial
hardship caused by illness, accident or death? The Q & A component of the CNR covers this
adequately. You are made aware their contents are insured but they have no insurance
policies covering life, trauma and income protection. This is where you ask what cover they
consider is enough in view of the financial commitments they are now planning? Will
Margaret have to visit Centrelink if an unforeseen event happens to Frederick? Should they
have to change their lifestyle? Just remember your Duty of Care.
They have around $184K plus the FHOG available and are looking to buy land with a
purchase price of $240K and construction in the vicinity of $350-360K. (Students in all
jurisdictions will have to adjust the land and construction costs to fit in the
capped amount criteria.) They estimate they will spend an additional $60K on
furnishings and garden. You are to interview the clients and propose a loan structure that
will suit their needs. They have indicated that they would like to be provided a minimum of
three (3) sound lending strategies acceptable with different providers. They normally clear
(swipe) their credit cards monthly with the exception of Mrs Everybody’s Myer 1 account.
It may be to their benefit to clear the car loan account with Esanda. These are the points of
discussion that should appear in your interview notes.
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CASE STUDY ASSESSMENT OPTIONS:
1. If you are in a State or Territory that FHOGs are available to both forms of home
purchasing, choose either an existing or new home acquisition for your case study (you do
not have to complete one of each).
Answer:
Loan application for Fredrick John Everybody and Margaret Anne Everybody
Loan amount:- $6,60,000
Last date for approval:- 31/08/2018
2. If you are in a State or Territory that only offers a FHOG on new and not established
homes, you will have to choose that option for a case study.
Answer:
Reasons for loan
Mr. Frederick John Everybody was a former engineer in Australian Defence Forces. For
this reason, the family could not live in one place. But now as Mr. Fredrick is being working for
BHP Billiton Company, the family can have a stable place to live in. For this reason, they are
looking for to buy a new house to settle down in one area. Their financial condition is also stable
at present.
Employment
Mr Frederick is an engineer working on the mining projects of BHP Billiton Company and Mrs.
Margaret is currently working at a local council child care centre as a nurse. Both of them are
working as a permanent employee in their companies.
Income
The income of Mr. Frederick is calculated as $115,000 per annum which is paid to him monthly.
Apart from this, Mr. Frederick enjoys a subsided rent when on location on the job. Mrs. Margaret
earns $29,000 annually which is paid to her in weekly basis.
Recommendation
The loan application is recommended to this family for several reasons. At first, they are having a
permanent job and enjoying a decent amount of money as their salary every month. They are also
having a stable financial condition which made them think of buying their first house. The income
of the family is annually $144,000 and the liabilities made by them are being paid regularly. The
amount of their total assets is $531,001 and the total amount of their liabilities is $638.29. They
are also eligible to receive a FHOG of over $184,000. Thus it can be considered that the family is
totally eligible for the loan.
If at some later stage the FHOGs rise or fall, please adjust the applicable purchase
prices to cater for those changes as this task forms an important part of the
assessment process and must be completed.
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STATEMENT OF ASSETS & LIABILITIES
for
Frederick John Everybody (FJE) and Margaret Anne Everybody (MAE)
As at / /
ASSETS LIABILITIES
Limit Owe Payment Lender
$ $ $ $
Bank Savings (ANZ) 17,000
Cash Management A/c
Bankwest 167,000
2010 Holden Commodore Sedan 33,000 28000 588.29/m Esanda
2004 Toyota Corolla 2,000
Furniture 95,000
Collectables 40,000
Share Portfolio 70,000
Superannuation (FJE) 77,860
(MAE) 29,141
CREDIT CARDS
ANZ VISA (FJE) 14,000 684.00 (cleared monthly)
Westpac MasterCard (MAE) 4,000 1,278.00 (cleared monthly)
MYER 1 Card (MAE) 1,000 673.00 50.00/m
TOTALS $ 531,001 $19,000 $30,635 $638.29

Loan Application Process
Case study B (Plant & Equipment, Motor Vehicles)
Billy and Lisa Smith have decided to upgrade their main vehicle and will give their
Mitsubishi to their son. The Holden ute will still be used by Billy to travel to work.
They are seeking to fund the full purchase of a Nissan X Trail and have provided you with
an Invoice from the dealer. The new vehicle is required to do a lot of country travel and tow
a caravan as they intend to take a number of trips.
Mr and Mrs Smith have full time employment and been working for the same companies for
over 5 years since moving from interstate.
Mrs Smith is the bookkeeper for FSR Consulting Pty Ltd and is responsible for all invoicing
and reporting. Mr Smith works fulltime for Large Mining Group Pty Ltd.
They have also completed a personal statement of position which is enclosed with the
documents.
Other information provided: Intend to keep the vehicle for at least 5 years Wish to keep repayments as low as possible Happy to consider a Residual which would be reflective of the value of the vehicle at
end of loan Fixed Rates and flexibility important with the loan being sought May look to purchase own premises in about two years Have asked for advice on Insurance for the vehicle. Have own superannuation funds but not averse to having them reviewed
 Both clients are unsure of what personal insurances they have but have made an
estimate of coverage
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Client statement of position
Referred by: Peter Michael Consultant: Ian Harris
Date: 27/10/20XX Source: Accountant- 3 Smith St,
Nth Sydney-
Ph 02 94250000
Applicant 1: Mr/ Mrs/ Ms/ Miss Applicant 2: Mr/ Mrs/ Ms/ Miss
Surname: Smith Surname: Smith
First name: Billy First name: Lisa
Date of birth: 21/10/62 Date of birth: 13/06/67
Address: 1 Joseph Street Address: 1 Joseph Street
Huntingdale NSW 2132 Huntingdale NSW 2132
Phone: [phone] Phone: [phone]
Mobile: [phone] Mobile: [phone]
Business: Large Mining Group Pty
Ltd
Business: FSR Consulting Pty Ltd
Occupation: Storeman Occupation: Bookkeeper
Business gross profit: Business gross profit:
Income-gross-net $82,003 $54,762 Income-gross-net $54,086 $37,381
Current lender: ANZ FSR bank detail Westpac 032 000 123456
Estimated market
value:
$540,000 Mortgage balance: $100,000
Payment: $933.00 Mthly/Fortnightly/Weekly
Years to run: 4 Interest rate: 7.05%
Asset
values
$
Liabilities
amount
owing $
Monthly
payments
$
Lender
Existing properties:
1. 540,000 100,000 933.00 ANZ
2.
Furniture 100,000
Motor vehicles:
2002 Holden Ute 22,000
Credit card (1) Limit $5000 1,000 150.00 ANZ
(2) Limit $10000 3,000 300.00 Citibank
Overdraft
Personal Loans:
Superannuation: Mr 160,000
Mrs 230,000
Insurances: Mr Mrs
Life: y/n 400,000 300,000 700,000
Trauma: y/n 100,000 50,000
Income prot. 61,502 40,564
Wills: y/n
Power of attorney: y/n
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Loan Application Process
Undelivered notices should be returned to:
GPO Box 5300
Sydney NSW 2001
Lisa Smith
1 Joseph Street Your Tax file number is
Huntingdale NSW 2132 456 259 725
Date Issue
3 July 20XX
Income Tax Assessment Act 1936
NOTICE OF ASSESSMENT
For the year ended 30 June 20XX (or substituted accounting period)
Your Taxable Income is $54,086 $
Tax on Taxable Income A 12648.12DR
Medicare Levy O 811.29DR
Your HECS repayment is X 3245.16DR
- based on a debt of $9413.00 (excludes any debt incurred since 1 June 20XX)
PAYG withholding credits E 19744.00CR
Tax Offsets and other credits G 484.00 CR
Balance of this assessment L 3523.43CR
A refund cheque for this amount is below
**************************Additional information***************************
Tax offsets and Other Credits include $20.00 Franking tax offset.
PAYG amounts withheld for HECS are included in the total credit at label E
PLEASE SEE THE REVERSE FOR IMPORTANT INFORMATION ABOUT YOUR ASSESSMENT.
S.C. Ashmore-Smith
Deputy Commissioner of Taxation
Sydney Office, Sydney NSW
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Loan Application Process
FSR Consulting Pty Ltd
ABN: 91 765 432 100
ACN: 7654321
Detailed Balance Sheet
as at 30 September, 20XX
30/09/20XX
$
30/06/20XX
$
Current assets
Shareholders loans 111,837 89,878
Total current assets 111,837 89,878
Non-current assets
Plant and equipment 2,197 2,197
Less accumulated depreciation (443) (350)
Total non-current assets 1,754 1,847
Intangible assets
Formation expenses 1,142 1,142
Total assets 114,733 92,867
Current liabilities
GST owing 4,271 4,423
PAYG tax payable 7,040 5,031
Total current liabilities 11,311 9,454
Non-current liabilities 0 0
Total liabilities 11,311 9,454
Net assets 103,422 83,413
Shareholders equity – retained profits 103,422 83,413
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Loan Application Process
Fantastic Nissan
ACN: 009 071 444
ABN: 47 009 071 444
TAX INVOICE
To:
Billy and Lisa Smith
For delivery to:
Billy and Lisa Smith
INVOICE DATE INVOICE/STOCK NO NEW/USED VEHICLE
MAKE
MODEL REGISTRATION
NUMBER
17/10/20XX 1425361 NEW NISSAN X-TRAIL T1
AUTOMATIC
TBA
ENGINE
NUMBER
CHASSIS NUMBER COMPLIANCE
DATE
COLOUR CONTACT ORDER NUMBER
QR25230948 JNITBNT30A0044491 20XX TWILIGHT CLINT
NESBITT
Due on receipt
QUANTITY DESCRIPTION AMOUNT
1 Nissan X-Trail
Window Tint
Genuine Tow Bar
Dash Mat
Floor mats
Rear Cargo Tray
Full tank
Pre Delivery
$34,718.18
450.00
450.00
Included
Included
110.00
Included
995.00
Sub Total 36,723.18
GST 3,672.32
Stamp Duty 2,379.00
Registration 535.00
Total Price $43,309.50
Total amount payable $43,309.50
Make all cheques payable to Magic Nissan
ABC
ABC Financial Services
TAX INVOICE
Date: October 29, 20XX
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ACN: 91 987 987 987
ABN: 04 791 987 987
INVOICE 78
To:
Macquarie Leasing Pty Ltd
GPO Box 5435CC
Melbourne VIC 3001
DESCRIPTION AMOUNT
Upfront broking commission – $
Sub Total
GST
Total price
Payments/credits
Balance due $
Make all cheques payable to ABC Financial Services
Thank you for your business!
NB: Where evidence is required i.e. payslip/offer & acceptance/financials etc., AAMC Training will accept the
evidence being typed on a blank piece of paper rather than supplying copies of the required evidence.
For example: “This represents the payslips for Frederick John Everybody for the periods ending 14th and 28th
February 2015.”
A sample of the forms mentioned above can be found in the AAMC Members’ Area under “Useful Resources”
(www.aamctraining.edu.au)
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AAMC TRAINING DOCUMENT CHECKLIST
LOAN APPLICATION PROCESS ASSESSMENT
MORTGAGE FINANCE
EVIDENCE ENCLOSED
Y N N/A
1. A fully completed AAMC Training Assessment Cover Sheet ☐
2. A fully completed AAMC Training Document Checklist (this page) ☐
Case Study - Loan Application Preparation (Task 1)
3. File notes from first contact through to settlement in chronological order ☐ ☐ ☐
4. Authorised Credit Representative Credit Guide and Licensee Credit Guide ☐ ☐ ☐
5. Client Needs Review or Fact Find ☐ ☐ ☐
6. Privacy Statement and Consent form ☐ ☐ ☐
7. Combined Credit Quote and Proposal ☐ ☐ ☐
8. Product Comparison Report (at least three options) ☐ ☐ ☐
9. Preliminary Assessment ☐ ☐ ☐
10. Costing sheet for Fees and Charges ☐ ☐ ☐
11. Fully completed Lender Loan Application or Copy of Online lodgement ☐ ☐ ☐
12. Lender’s loan Document Check List (Normally forms part of loan application) ☐ ☐ ☐
Process Applications for Credit (Task 2)
13. A completed serviceability calculator (refer to useful resources) ☐ ☐ ☐
14. Loan Comments/Lender Comments ☐ ☐ ☐
15. Evidence of Income (Pay slips, Employers Letter, PAYG Summaries) ☐ ☐ ☐
16. Evidence of an Offer & Acceptance or a Contract of Sale or a Purchase contract ☐ ☐ ☐
17. Evidence of Council approved plans (House and Land , Off the Plan packages) Plus a
Fixed Price Building Contract ☐ ☐ ☐
18. Evidence of savings/ equity and other loan commitments ☐ ☐ ☐
19. First Home Owners’ Grant application (These can be downloaded from your Office of
State Revenue) ☐ ☐ ☐
20. Anti Money Laundering/Counter Terrorism Financing ID requirements
Note: 2 forms of identification is required for each applicant to the loan and a
separate AML ID form is required for each applicant.
☐ ☐ ☐
21. Evidence of Valuation successfully completed ☐ ☐ ☐
22. A Compliance file checklist ☐ ☐ ☐
Completing Customer File (Task 3)
23. Fully completed Settlement document pack (Refer to the Settlement File Checklist to
ensure all relevant documents are completed and submitted)
☐ ☐ ☐
24. Create a customer/referrer database (Task 4 A)
You are required to prepare and submit your data-base on contacts made from this
transaction by using your internal CRM or a suitable program i.e. Excel.
☐ ☐ ☐
25. Short Answer Questions (Task 4 B)
Complete and submit all Short Answer questions ☐ ☐ ☐
NB: Where evidence is required i.e. payslip/offer & acceptance/financials etc., AAMC Training will accept the
evidence being typed on a blank piece of paper rather than supplying copies of the required evidence.
For example: “This represents the payslips for Frederick John Everybody for the periods ending 14th and 28th
February 2015.”
*Samples of the abovementioned forms can be found under Useful Resources of the Utilities tab at your
login Dashboard – either in the Loan Application, Complex Lending or Useful Forms folders.
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Loan Application Process
AAMC TRAINING DOCUMENT CHECKLIST
LOAN APPLICATION PROCESS ASSESSMENT
MOTOR VEHICLE & EQUIPMENT
EVIDENCE ENCLOSED
Y N N/A
1. A fully completed AAMC Training Assessment Cover Sheet ☐
2. A fully completed AAMC Training Document Checklist (this page) ☐
Case Study - Loan Application Preparation (Task 1)
3. File notes from first contact through to settlement in chronological order ☐ ☐ ☐
4. Authorised Credit Representative Credit Guide and Licensee Credit Guide ☐ ☐ ☐
5. Client Needs Review or Fact Find ☐ ☐ ☐
6. Privacy Statement and Consent form ☐ ☐ ☐
7. Combined Credit Quote and Proposal ☐ ☐ ☐
8. Product Comparison Report (at least three options) ☐ ☐ ☐
9. Preliminary Assessment ☐ ☐ ☐
10. Costing sheet for Fees and Charges ☐ ☐ ☐
11. Fully completed Lender Loan Application or Copy of Online lodgement ☐ ☐ ☐
12. Lender’s loan Document Check List (Normally forms part of loan application) ☐ ☐ ☐
Process Applications for Credit (Task 2)
13. A completed lenders serviceability calculator (refer to useful resources) ☐ ☐ ☐
14. Evidence of Income (Pay slips, Employers Letter, PAYG Summaries) ☐ ☐ ☐
15. Evidence of the Offer To Purchase/Suppliers Sales Tax Invoice showing serial numbers
etc., to identify title ☐ ☐ ☐
16. Evidence of Motor Vehicle Registration Papers (Some lenders require this information) ☐ ☐ ☐
17. Evidence of Trade-in equity, Cash Contribution (Receipt) and other loan commitments ☐ ☐ ☐
18. Anti Money Laundering/Counter Terrorism Financing ID requirements
Note: 2 forms of identification is required for each applicant to the loan and a
separate AML ID form is required for each applicant.
☐ ☐ ☐
19. A Compliance file Checklist ☐ ☐ ☐
Completing Customer File (Task 3)
20. Fully completed Settlement instruction document pack (Refer to the Settlement File
Checklist to ensure all relevant documents are completed and submitted)
☐ ☐ ☐
21. Evidence of qualifications and experience of Third Party Declarer/Observer ☐ ☐ ☐
Create a customer/referrer database (Task 4A)
22. You are required to prepare and submit your data-base on contacts made from this
transaction by using your internal CRM or a suitable program i.e. Excel.
☐ ☐ ☐
Short Answer Questions (Task 4B)
23. Complete and submit all Short Answer questions ☐ ☐ ☐
NB: Where evidence is required i.e. payslip/offer & acceptance/financials etc., AAMC Training will accept the
evidence being typed on a blank piece of paper rather than supplying copies of the required evidence.
For example: “This represents the payslips for Frederick John Everybody for the periods ending 14th and 28th
February 2015.”
*Samples of the abovementioned forms can be found under Useful Resources of the Utilities tab at your
login Dashboard – either in the Loan Application, Complex Lending or Useful Forms folders.
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Settlement File Checklist
The provision of all the information detailed below will ensure prompt issuance of your qualification.
Any omissions will cause AAMC Training to seek the missing data which can prove costly to both
parties. You must include this checklist in the submission of your assessment.
DOCUMENTS
MORTGAGE (M) AND/OR
PLANT, EQUIPMENT, VEHICLE FINANCE/COMMERCIAL LENDING (PEVC)
Type Data
Enclosed
Y N N/
A
M/PEVC File Notes from first contact through to Settlement in chronological order ☐ ☐ ☐
M/PEVC Evidence of loan approval ☐ ☐ ☐
M only Loan/letter of offer from lender ☐ ☐ ☐
M/PEVC Borrowers checklist (Document sign-up) ☐ ☐ ☐
M only Correctly signed home loan contract (including transfer of land and mortgage of
land relevant to the State.) ☐ ☐ ☐
PEVC Correctly signed Consumer Loan contract for the Lender chosen ☐ ☐ ☐
M/PEVC Insurance details – Home Certificate of Currency or Motor Vehicle Certificate of
Currency ☐ ☐ ☐
M only Borrowers Authority and Instructions ☐ ☐ ☐
M only Evidence of settlement related communications between all parties. (IE. Broker,
Conveyancer, Lender, Client) e.g. a letter or email showing settlement
communications between all parties.
☐ ☐ ☐
M/PEVC Letter of successful settlement from broker ☐ ☐ ☐
M/PEVC Service Questionnaire or relevant example of feedback from client ☐ ☐ ☐
Other
☐ ☐ ☐
☐ ☐ ☐
☐ ☐ ☐
o
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Samples of the below-mentioned forms can be found under Useful Resources of the
Utilities tab at your login Dashboard – either in the Loan Application, Complex
Lending or Useful Forms folders.
1. Financial Services
Credit Guide/Credit
Guide
Along with the ACR’s profile this guide is handed to the clients at initial
interview and it sets out the services that are offered along with the Privacy
Policy of that organisation and the complaints procedure.
2. Authority to Act &
Privacy Consent Form
The authority to act allows the finance broker to act on behalf of the client
when dealing with the lender and other related parties to loan. The privacy
consent form allows the finance broker to store and use relevant client
information to assist in the loan application process without breaching privacy
laws. This will most likely be contained in the credit proposal
(mentioned below).
3. Authorised Credit
Representative profile
This form is which sets out the Authorised Credit Representative’s profile and
authority to act on behalf of a credit licence holder and what products the
ACR can introduce to under that authority. At initial interview the clients must
be handed a copy. This may be an addendum to the Credit Guide.
4. Data Collection –
Business or Personal
Consumer Client
Needs Review/fact
Find
By using a Client Needs Review/Fact Find you will have all the information
required to form an opinion as to what type of loan best suits the clients’
requirements. At the same time you are acting with due diligence in asking
the clients questions about their financial security in the event of an
unforeseen circumstance that causes financial hardship. You have a legal
obligation to yourself and the clients to make them aware of the ramifications
of an unexpected illness, accident or even death. By signing a Client Needs
Review they can accept your offer of a referral to an insurance professional or
alternatively decline your recommendation, thereby you have documentary
evidence of your professionalism. You do not have to sell Risk Products but
you have complied with the requirements under the Duty of Care by having
adopted the above actions.
5. Costing sheet for fees
and charges Estimate of total fees and charges payable to the financier in relation to applying
for the finance will form part of the credit proposal. However the broker may
want to complete a cost analysis to determine savings or equity versus costs
associated with the purchase and finance. This is not a requirement of the
submission but may rather be a process you may want to adopt for
purchases.
6. Interview notes A file copy of your interview notes will go a long way to avoid any adverse
opinions from any audit that may be undertaken by any aggregator company or
ASIC official. Whilst documents required under NCC such as a fact find/client
needs review, preliminary assessment and credit proposal will highlight
requirements and recommendations they may cover all conversations/ time lines
between the broker and client.
7. Preliminary
Assessment
Based upon your enquiries as to the financial situation, requirements and
objectives of your client you are required to conduct a preliminary
assessment to determine whether the proposed credit contract/lease is ‘not
unsuitable’ for the client. This must be done prior to suggesting the client
applies for, or providing assistance applying for a particular credit contract.
8. Credit Quote and Credit
Proposal Documents
These forms may be incorporate into the one document.
The Credit Quote outlines the maximum fees and charges payable to the credit
representative and licensee for credit assistance. Must be provided before
credit assistance is provided.
The Credit Proposal document outlines the fees, charges and commissions
relating to the particular credit contract or consumer lease and to whom/by
whom they are payable.
9. Statement of
Credit/Mortgage
Advice
This is the document the client signs giving the Authorised Credit Adviser
authority to act on the client’s behalf and also give privacy consent for the
personal details to be passed onto the lending institution. It also advises the
amount of commission a broker will receive as well as the costs involved in
taking out the loan. A copy of this appointment must be given to the client
and a copy kept on your file. This document may be a combination of
industry known documents as stated above and not required if you
have completed credit proposal and credit quote
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10. Evidence of income Lenders require documentary evidence of income to support a loan application.
Verifying employment may be in the form of two or three consecutively dated
payslips plus a PAYG summary that indicates regular overtime or
allowances/commissions. A letter or employment contract from the employer
will also suffice in the absence of payslips. Other income will require
documentary evidence as determined by the lender.
11. Self-employed/
Commercial clients
A copy of the last two years individual’s and company tax returns/financial
statements along with a serviceability assessment for self-employed
individual/partner.
12. Signed statement of
assets & liabilities (SOP)
This information allows lenders to readily ascertain the financial standing of the
applicants.
13. Cash flow forecast When you are arranging funding for the larger type loans, whether it is for plant
and equipment or say, a commercial factory unit a Cash Flow Forecast is
essential as it will assist the lender in appreciating where the business is
headed. But remember it will have no bearing on the lender’s decision-
making as it will look only at anecdotal evidence.
14. Serviceability When submitting an application you are to include a Serviceability Assessment
sheet which shows the lender you have ensured the clients can afford the loan.
You will find these assessment tools form part of the lenders’ online broker
toolkit and are relatively simple to use.
When you undertake your accreditation training each lender will provide the
facility or you will have access to all the tools through your aggregator.
15. Copy of the Offer and
Acceptance (WA) or
Contract of Sale
Lenders need a copy of the completed O&A or COS to verify the purpose of the
loan and for the ordering of valuations, if required. You will be advised of their
requirements when you complete the accreditation courses. It is also worth
noting that some lenders will only carry out a kerb-side valuation when the LVR
is 80% or less.
16. First Home Owners
Grant application
Whilst the Federal Government provides the funding for these concessions
each State and Territory Government administers the schemes. Therefore so
your clients can get the maximum benefits available, your task is to research
this area of funding thoroughly by visiting the Office of Revenue in the
jurisdiction in which you operate.
These forms are to be completed to accompany your case study files.
17. First Home Buyers
Stamp Duty Concession
application
As explained above there are variances in what concessions are available.
However notwithstanding the fact that in some areas solicitors/conveyancers or
settlement agents handle this aspect of the transaction, we at AAMC believe it
is up to the Broker to ensure that there is a smooth settlement transition. This
will happen if the Broker provides the clients with the necessary paperwork,
has it completed correctly and keeps it on file for presentation to the correct
parties when settlement is due to take place.
18. Fully completed loan
application
Let us first accept that all lenders require the same information, however with
the layout of their application forms it just appears in different places. You are
not only expected to provide the clients’ full personal details, but you are
obliged to be honest and frank about the information you are submitting. As a
Broker you are also obliged to inform either the lender or the client of any
information of which you become aware that may have a material effect on
the transaction. If you do not follow this principle you could well become the
subject of legal action from either party.
The application forms are quite simple to complete provided, however, you
have gathered all the information to make it a simple task.
There is one area on confusion and that is the completion of the “Declaration
of Purpose”. By completing this incorrectly you may jeopardise your clients’
rights under the National Consumer Credit Protection CT 2009.
19. Notes to Lender/ Lenders when assessing a loan rely heavily on information provided. They do
not have the privilege of sitting down and interviewing the clients. As you
have already learnt, Brokers must provide as much information as possible
when submitting a loan application, of any nature, to ensure a fair and
reasonable decision can be made by the lender.
Therefore it is in everybody’s interests to highlight valid points in a Cover
Sheet. Shown below this table are two options that tell a tale. Please do not
just copy these examples and submit – use your initiative and present a
cover sheet along similar lines as we have demonstrated.
There will be many and varied reasons why you think an application should
be approved so let the lender share your reasons. Don’t make them second
guess.
If you follow this path, it will stand you in good stead with the lenders and
exhibit a standard of professionalism that unfortunately not enough Brokers
take seriously. Half measures or the attitude “Close enough is good enough”
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does not wash in today’s competitive economic climate. Lenders that receive
half-baked applications will put them to one side and get on with the fully
detailed ones to acknowledge the correct presentation.
20. Lenders/Broker
document checklist
All lenders have a checklist to ensure you have submitted the application
correctly with all the supporting documentary evidence. Please ensure this is
completed.
21. Anti Money Laundering/
Counter Terrorism
Financing
Due to criminal activities and money laundering you have to provide the
necessary identifying documents to support the application. Where you are
dealing with a client’s existing lender, note on your cover sheet that you
haven’t supplied the information because client is known to the lender.
Some lenders carry out their own verification through their branch network.
22. Business Registration/
Constitution and/or
Trust Deed
Business registration legitimises the authenticity of the applicant.
The Constitution and/or Trust Deed reflect the authority of those able to act for
and on behalf of the company.
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NOTES TO LENDER TEMPLATE
This form is for guidance only, you will need to create your own method.
YOUR LETTERHEAD
Loan application for XXXXXX & XXXXXXXX
Loan amount $00000000
Latest date for approval ………/………/…………
Please find loan attached application for the above clients.
OPTIONS
Reason for loan
They have just arrived in Australia
They have moved from interstate due to employment transfer
They shared first division in Saturday’s lotto
Mum & Dad gifted them $80000
They are upgrading
Refinancing to use equity for investment or renovations, holidays or for whatever
Divorce – marriage split
Downgrading- kids left home
Employment
Just received promotion
Changed jobs for more income and permanency
Stable employment
Interstate transfer
Income
Single income is supported by Serviceability Assessment
Joint
Permanent staff for long period and expecting promotion.
RECOMMENDATION
We recommend this application in view of the following:
Stable employment
Stable address
Sound financial position
Sound income
Nothing adverse known
Security is in new expanding area
We recommend this application in view of the following:
SIGNED…………………………………………………………… Date…………/…………/………………
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Task 2: Report/Written Test
Process Applications for Credit (Mortgage Loans Only)
You are required to demonstrate that you understand the lenders policy and procedures for
processing an application for credit i.e. from the point of view of a lenders credit analyst. Once
your loan application is ready to be submitted you must provide supporting evidence that you
have:
 Checked and verified application details including all information to support the
application are in accordance with the lenders credit policy and procedures.
 Your assessment decision to recommend the credit application refers to/is within the
lenders policy and procedures.
 Maintaining application records and completing necessary documentation are according
to the lenders legislative requirements and lenders organisational policy and
procedures.
Overall, to support your understanding of how an application for credit is processed by the
lender; you are required to complete research and provide the following information which is
also covered in the learning material:
 Detailed notes regarding the lender’s organisational approval policy and procedures for
the chosen product in your selected case study. Briefly explain why the loan met the
policy guidelines and how you researched the product and the guidelines. Including
maximum LVR, serviceability ratio, minimum loan etc. If you are unable to access the
lenders information readily the alternative is to access the Lender Mortgage Insurers (i.e.
Genworth/QBE) guidelines which are readily available on their web pages. Although the
case studies provided did not require LMI it is helpful to understand policy guidelines as
many types of lenders and loans require LMI cover.
 Explain the approval guidelines i.e. who can approve/delegation; timeframes etc.
 Ensure you are adherence to relevant legislation with reference to checking and verifying
application/client details and maintaining records i.e. how file and records are maintained,
how movements/milestones are monitored etc.
Answer:
The Australian banks and lenders mortgage insurers have specific lending criteria that they use to
assess loans applications. If the client failed to fulfil those criteria, the bank or mortgage insurers
cannot provide the loan to that individual client. For an individual loan, the person must be 18
years or above in age and must be a permanent citizen of Australia. In case of non-residents of
Australia, the loan amount which is to be sanctioned is 90% of the LVR for the citizens of New
Zealand and 70% of the LVR for other non-residents. A guarantor is also required to take loan
form a bank or mortgage insurers. Some savings may also be required in order to take loan from
the lender. The percentages of saving determine how much the person can get from their LVR. The
amount of income and the employment status is also necessary for applying for loan from a bank.
There are several criteria for getting loan from a bank. The person must be working for minimum
12 months with the current employer to be eligible for the loan. The 100% income of the person
will be accepted if the person fulfils the employment criteria. The Loan to Value Ratio (LVR) is
one of the major indicators of risk and a primary consideration that banks and mortgage insurers
take into account. The maximum base LVR is 95-97% including capitalised LMI. The maximum
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loan amount is also based on the percentage of LVR. The higher the LVR will be, the maximum
loan amount will be decreased. Where a person can take up to $750,000 loan for 95% LVR, the
same person can borrow up to $2500000 of loan for 60% LVR. There are exposure limits also for a
borrower or a group of borrower for the maximum amount of loan that can be borrowed from the
mortgage insurer. In this case, the amount is disclosed as $2.5 million. The minimum amount of
loan that the mortgage insurer can provide is of $10,000.
As time advances, the lenders are shortening the approval timeframes of approving loans to
the borrowers. But still the approval process follows certain guidelines to approve loans. As soon
as the loan application is submitted, the loan officer reviews the form and submits the loan
application to the computer system. Then the credit report of the borrower is cross-checked again.
After that another investigation can be done to ensure the truthfulness of the documents. Then the
income source of the borrower is being examined. Thereafter the assets list that the borrower
provided is being evaluated. The lender also checks the credit history and outstanding debt of the
borrower. The insurance report of the borrower for the property is also required to met the
coverage standards. After that the file is being reviewed and scrutinised by the lender. Then
additional reports or documents can be required if the lending authority needs it. Then the loan
package is being forwarded to the underwriter. Hence the loan can be approved if the underwriter
finds each and every document is legit.
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Loan Application Process
Task 3: Report/Written Test – Completing Customer File
You are to submit a fully completed loan application form as well as:
 A lenders cover sheet detailing the background of the applicants, structure of the loan,
loan product applied for, serviceability criteria.
 Supporting documents for the loan submission as requested by the lender
Finally as a result of your client interview, completing relevant client documents and loan
application for the lender; you are now required to complete the remainder of customer file
supporting several of your obligations and responsibilities as a Finance Broker. These
important steps being the approval process, documentation, settlement and ongoing
relationship management. In areas where you do not have copies of actual supporting
documentation, insert a page with the name of the document, an explanation of the
document and its purpose. You would include e.g. copy of formal/unconditional approval
stating conditions of settlement.
There are a number of templates in the Member’s Area under ‘Useful Resources’ that you
could use in your submission.
You are required to submit your customer as determined by the chosen case study. Therefore
your file information must contain the following:
1. Adding to your Interview Notes - Customer Contact Sheet/Record
You should have already documenting regular communication pre your loan submission.
These interview notes incorporate all the correspondence from initial contact to loan
preparation and submission. You are now required to provide interview notes from loan
submission to post loan application process; with all parties specifically including:
- Customer
- Bank/s
- Referrer/s
- Government bodies, i.e. Stamp Duty, FHOG/ Revs
- Property Valuators
- Settlement Agent
2. Advice of Loan Approval
Evidence of communication with customer and other relevant parties regarding:
- Communication of formal/unconditional approval to customer i.e. lender letter of offer;
- Letter to client regarding documentation/settlement expectations;
- Communication with Real Estate Agent, Settlement Agent, etc.
3. Document Sign-Up/Settlement Preparation
- Document sign-up checklist and covering letter /communication;
- Correctly signed mortgage documents;
- Insurance details;
- Authority to disburse funds;
- Settlement checklist.
4. Advice of Transaction Completed/Finalised
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- Communication of successful settlement;
- Letter/survey to client asking for client satisfaction feedback on services/support provided.
You may wish to ask for referral to friends and family.
Answer:
Task 3
To get an approval for a loan, several criteria have to be fulfilled and certain methods have to be
followed. In this process, there are other authorities who are engaged apart from the borrower and
the lender. At first, when a customer needs a loan, he/she search for the best possible policy for a
loan which can be suitable for his/her needs. In most of the cases, the customer takes the help of a
referrer. The referrer works as a middle man between the borrower and the lender. The referrer
suggests or advice the customer about certain loan policies which can be more suitable for him.
Thus the referrer creates a link between the borrower and the lender. Then the application form is
submitted to the bank. At first the bank needs to make it sure if the application data can meet their
criteria or not. If yes, then the bank has to follow the guidelines of several government bodies such
as stamp duty, FHOG etc. After all the verification, if the borrower proved eligible for the loan, the
borrower has to mortgage equivalent property to the bank for security. Thus it is the duty of the
property valuators to provide proper information about the property. If the loan is sanctioned to the
customer, and he/she failed to repay it, then the settlement agent has to sell the mortgaged property
of the customer for the bank to compensate for the losses.
It is the duty for the agent to make customer aware of each and every details regarding the
loan. The policies of the loan, the offers that the lender can provide or the required documents for
the loan are included. It is also required to make sure about the condition of the Real Estate Agent
and Settlement agents.
It is also required to inform the client about all the necessary documentations for a hassle-
free application. The documents should be correctly filled and signed. The mortgage documents
and insurance details are needed to be proper and accurate. The policy of settlement should also be
cross-checked to avoid any harassment in future.
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Task 4: A (Activity) and B (Short Answers)
Create a customer/referrer database
A. The relationships built in Task 1 Case Study were the clients, referrer, settlement agent
and real estate agent.
Prepare a database on contacts made from this task by using your internal
customer record system or suitable program, i.e. Microsoft Excel spreadsheet.
You are required to submit the Excel file (or PDF/screenshot if other software is
used), showing your database layout.
B. Please answer the following questions in relation to your database and building/managing
your business contacts:
1. Why is important to build a database of clients/referral sources?
answer
It is important to build a database of clients/referrals sources because these sources can
bring more revenue to the business in future.
2. Why is it important to develop professional relationships?
answer
It is important to develop professional relationships because there is a chance that the
client might need another help from the business organisation or he/she can refer other
people to that organisation due to the good service and relation with the organisation.
3. When is it not appropriate to contact a person and why?
Answer:
If the client is busy, disturbed, going through a hard time or not interested in other things,
it is not appropriate to contact a person because it may hamper the relationship with the
client and that may affect the future transactions with the client.
4. Why is it important to have effective interpersonal styles and methods when dealing
with clients/referrers? Why is it important to consider special needs, culture, race,
religion, origin, demographics?
Answer:
To deal with the client properly, the agent should adapt the different moods and situations
based on the client. It is very important to consider the special needs, culture, race,
religion, origin and demography of the client to make an idea of the behaviour of the
client.
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5. Explain why you think it would be important to follow up any business referrers as
quickly as possible.
Answer:
It is important to follow up any business referrers as quickly as possible because the
referrers can bring new clients to the business.
6. What methods could you use in developing new business i.e.; advertising and
promotion of your services?
The good relationship with the clients and referrers, good quality of service,
behave with the clients and referrers according to their moods can be useful in
developing a new business and good for advertising and promoting the service.
Assessment V2.3 © AAMC Training Group A25