FNSFMB501 - Loan Arrangements: Client Advice and Scenario Analysis

This assignment provides solutions to three scenarios related to loan settlement in the finance and mortgage broking industry (FNSFMB501). The first scenario involves advising a client, Robbie, on managing a delayed loan settlement, including communication strategies with the vendor and potential outcomes. The second scenario addresses whether to rely on a vendor's pest inspection report, advising the client to obtain an independent report to ensure the property is free from pests. The third scenario advises a client, Jane, on her legal position regarding required devices at a property, stating she is not liable as she is not yet the titleholder. The assignment references academic sources to support its analysis and recommendations.

F N S5 0 315 Dipl o m a of F in a n ce an d Mortg ag e Broki n g
M an a g e m e n t
F N SF M B 50 1 S e ttl e ap p li catio ns an d l o an arr ang e m e nt s i n the fi nan c e
an d
mortgage broking industry
Asse ssm e n t 2

Assessment information
You are a practicing settlement agent and are involved in a number of residential mortgage
settlements each week.
Instructions to complete this assessment
In order to complete this assessment, you are required to complete the following sections
consecutively. Details and specific instructions are provided within each section and on the
form/templates provided.
Supporting documents
To find the relevant supporting documents, please refer to the Assessment Resources folder,
located within the FNSFMB501 Settle applications and loan arrangements in the finance
and mortgage broking industry section of your course. (Note: Not all units have
assessment resources.)
S ect i on 1 – Re view t he S et tl ement Ag en t S cen ar i os
R e qui r em en ts
St ep 1 : Do wn lo ad an d r evie w the S e ttle m e nt Ag e nt S c e na ri os , lo c a te d in t he A ssessm ent
Resour ces
folder.
S ec tion 2 – Pr epare Adv i ce
for Cl i en ts R equ i re me nts
Re spond to the sc e nar i os in ste p 1 an d , i f n eces s ar y, r efer t o th e Co nv e ya nci ng Po li c y a nd
Proc e d ure M anua l ( A ss essm ent Resour ces fo ld er) when d e v elo p ing yo ur r esp on ses:
2.1 Re. Scenario 1: As Robbie’s settlement agent: what advice would you communicate to
Robbie and how will you assist your client with his settlement problem?
Being a settlement agent, it is my prime duty that I have to convey clearly with the clients whose
name Robbie in order to settle the loan proceedings. In order to resolve the settlement problems, I would
call and discuss with the vendor regarding the extension of the date. It means I will arrange a meeting
with the Robbie and its home vendor and communicate that the delay in their loan settlement is because
of the reason of large workload and turnaround of banks. So, settlement of loan might take some time.
Further, I will request the vendor to handover the house to Robbie as loan settlement require some time as
Robbie bank is not in a position to settle the loan quickly. This conversation and communication with the
vendor might cause both positive and negative outcome (Courchane and Ross, 2019). The positive

outcome of this meeting was that in case if the vendor get agreed on the extension of settlement date, then
the clients able to get their loan, and they further provide it to the seller of house. But on the other side,
the negative outcome of this meeting is such that if I fail to secure the loan by settlement date, then the
client might need to pay interest and penalty fees. Along with this, the seller can also cancel the sale of
house and also keep the deposit of Robbie with themselves. So, it is important for me to communicate
calmly with the both client and vendor.

2.2 Read Scenario 2, then provide your client with advice about whether a vendor’s pest inspection
report should be relied upon at the time of loan settlement.
I would advise Robbie that they should say No to the vendor to involve in the pest inspection. It is
because the pest inspection is one of the necessary measure at the time of loan settlement to resolve any
pest issues. Further, the pest inspection needs to a non-biased independent inspection and are separate
from a home inspection thus it must be independently done with the involvement of client only
(Davradakis and Santos, 2019). It is advisable to the client that they should hire their own timber pest
inspector for producing the pest inspection report in order to make sure that the property they are buying
is not infected by termites or any other timber pest. It is important for the health of the buyer because
such insects and timbers can cause serious health issue to Robbie and their family.
2.3 Read Scenario 3, then advise your client Jane what her legal position is regarding the required
devices.
In the given scenario, it is advisable to Jane that they are not liable for the installation of devices
at the property because they are not the titleholder of property. Being the titleholder of land property, the
vendor need to uphold and comply with this change government legislation along with the timber pest
inspection. It might be because of the reason that Jane has entered into the contract prior to this change
and the ownership of the property has not yet transferred on the name of buyer (Gomber and et.al., 201).
So, they are not entitled to make any changes in the property thus it is advisable to the client that should
say no to the seller of the land.

REFERENCES
Books and Journals
Courchane, M. J. and Ross, S. L., 2019. Evidence and actions on mortgage market disparities: Research,
fair lending enforcement, and consumer protection. Housing Policy Debate. 29(5). pp.769-794.
Davradakis, E. and Santos, R., 2019. Blockchain, FinTechs and their relevance for international financial
institutions (No. 2019/01). EIB Working Papers.
Gomber, P. and et.al., 2018. On the fintech revolution: Interpreting the forces of innovation, disruption,
and transformation in financial services. Journal of management information systems. 35(1).
pp.220-265.