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Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 1

Schedule 1 of the National Consumer Credit Protection Act 2009 is about the National Credit Code. This schedule, being the law of the Commonwealth, has an effect and elaborates the single day for fixation of proclamation. In case of delay of any provision related to the Act and do not occur within the time period of six months. The time period for the six months will begin on the day when the Act will receive the Royal Assent.

Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 2

Followings are the legislations that give authorities to ASIC:

  • Corporation Act 2001
  • Insurance contracts 1984

For the approval of the financial service sector codes of conduct, the power is granted by 1101A of the Bill that applies to the codes of conduct.

Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 3

Following are the key points that describe the features of the Australian Bankers’ Association of code of Banking Practice:

  • It is a new banking code of practice that has established new standards for the services related to the customers.
  • It is the new code and is based on the new reforms and agenda to improve the banking system in Australia.
  • By signing the documents related to the codes, the banks make the commitment to their customers for the behavior based on ethics, lending practices that are fair and responsible, and the protection of the privacy of the customer.
  • This code has the use of technology in banking that has made the transaction process kore accurate and fast.
  • According to the code, the bank takes a stronger responsibility to deliver the services.
  • This new banking code has been approved by the Australian Securities and Investment Commission.

Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 4

  • Home loan application form

The purpose of the home loan form is that the government helps financially to the person who gets a loan for building his or her house for the 1st time. There is a condition that the person acquiring the loan is the resident person. The content of the Home loan application form is as follows:

  • Terms of loan
  • Loan schedule and detail
  • Signature of applicant
  • Amount of loan. ‘
  • Property plan
  • Identification form

The purpose of the identification form is to evidence the ID of the customers and the contracting parties. The contents are as follows:

  • ID card number with the copies
  • Secondary information
  • Passport Copy
  • Driving license copy

Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 5

If someone applies for the loan, the lender is concerned with the capability of the person for the repayment of the loan. An applicant will need to list all the assets that are held by the person. The things can be classified as an asset if a person has control over it and have the economic benefit over its useful life. The verification related to the assets is done by the mortgage company by checking the savings and the investment accounts with the receipts and payments turnover. Similarly, liabilities are the obligation, and these are needed to list the same as assets. Information about the liabilities of the person indicates the undertaking of other loans by the person and its repayment schedule. 

Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 6

In the loan application form, there will be a need to fill the section about the household income and reasonable and necessary monthly expenses. Two sections are required to be filled with the sections and subsections of required monthly Income and expenses. Any person, if makes misstatement regarding Income and expenditure, shall be subjected to penalties based on fines, imprisonment, or both. Following are the components of monthly Income that are required to be mention in the loan application form:

  • Employment income
  • Employment income of the spouse
  • Chile support received
  • Social security benefits
  • Workers compensation
  • Public assistance
  • Other Income

Monthly expenses are as follows

  • Food
  • Housing
  • Utilities
  • Basic communication
  • Necessary medical and dental expenses
  • Necessary insurance
  • Transportation
  • Child/dependent care
  • Private loan payment
  • Other expenses

Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 7

The settlement process is the legal process that is facilitated by the legal and financial representatives. Following are the features of the process of home loan settlement:

  • A mortgage broker is not involved directly in the process of the settlement of the loan but has the authority to assist the client in the process.
  • The settlement agent of the client meets with the sales representative or the lender on the day of the settlement at a certain time to handover and sign the documents and cheques. There is no need for the client or the seller at the time of settlement.
  • The right, responsibilities, and obligations of the client shall be kept in consideration. The broker of loan has got the responsibility to shown and remind the loan details. Loan details include the amount of interest, principal amount, rate of interest, and monthly repayment.

Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 8

Any loan management should have the following features:

  • Loan origination: The management shall be able to handle the tasks related to the profiles of the customers and new loan applications in an effective manner.
  • Loan decision making: An efficient management system has the efficient quality of the decision making regarding the application and the acquisition of loans.

Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 9

The valuation is the detailed inspection so that the lender can assess and estimate the true and fair value of the property so that it can be used as security against the mortgage. The valuation of inspection is the formal report that has been prepared by the person having the qualification as per the requirements of the Act. The valuation date is the date of the application of loans and provides security against the loan. Normally, the house is provided as security. That’s why there is a need for a valuation.

Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 10

Followings are the requirements of loan application form:

  • Compilation of necessary information: This necessary information includes the complete and appropriate lenders forms and signatures and the support of the application in compliance of National Credit Code and other securities policies,
  • Preparation of loan documentation: Preparation of loan documentation includes the financial information as well as personal information of the client. These documents should confirm the requirements of the loan

Prepare Loan Application on Behalf of Finance or Mortgage Broking Clients - Question 11

The types of securities are as follows:

  • Real estate
  • Cash Secures
  • Equipment secured
  • Blanket Liens

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Accounting and Finance Assignment Help

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