Finance and Mortgage Broking (CIVMB_AS_v5A2)

Written Assignment

Certificate IV in Finance and Mortgage Broking (CIVMB_AS_v5A2)

Student identification (student to complete)

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Written assignment overall result (assessor to complete)

First submission
Resubmission (if applicable)








































Result summary (assessor to complete)

Section 1: Case study 1 — Philip and Jennifer BrownFirst submissionResubmission (if required)
Task 1 — Key terms, gathering and documenting client information
Task 2 — Assessing the clients’ situation
Task 3 — Borrowing options
Task 4 — Reasonable enquiries
Task 5 — First Home Owners Grant and home buyer assistance schemes
Task 6 — Professional network and loan settlement process
Task 7 — Interest rates
Section 2: Case study 2 — Richard and Pauline Jackson
Task 8 — Establishing level of financial knowledge
Task 9 — Responsible lending obligations
Task 10 — Self-employed special considerations
Task 11 — Advising on strategies
Task 12 — Impact of credit history
Task 13 — Dispute resolution
Task 14 — Effective access to files
Section 3: Case study 3 — Mary Jane Smith
Task 15 — Prepare and check a loan application
Section 4: Working in financial services
Task 16 — Financial services legislation and industry codes of practice
Task 17 — Design a document
Task 18 — Applying principles of professional practice to work in the financial services industry
Task 19 — Develop and maintain in-depth knowledge of products and services used by an organisation

Please note: To pass this written assignment, you will need to be assessed as DEMONSTRATED in either your first submission or your 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.

Before you begin

Read everything in this document before you start your written assignment for Certificate IV in Finance and Mortgage Broking (CIVMB_ASMG_v5A2).

About this document

This document is the written assignment — half of the overall Written and Oral Assignment.

This document includes the following parts:

Instructions for completing and submitting this assignment

Section 1: Case study 1 — Philip and Jennifer Brown

A case study with a series of short-answer questions:

– Task 1 — Key terms, gathering and documenting client information

– Task 2 — Assessing the clients’ situation

– Task 3 — Borrowing options

– Task 4 — Reasonable enquiries

– Task 5 — First Home Owners Grant and home buyer assistance schemes

– Task 6 —Professional network and loan settlement process

– Task 7 — Interest rates

Section 2: Case study 2 — Richard and Pauline Jackson

A case study and a series of short-answer questions:

– Task 8 — Establishing level of financial knowledge

– Task 9 — Responsible lending obligations

– Task 10 — Self-employed special considerations

– Task 11 — Advising on strategies

– Task 12 — Impact of credit history

– Task 13 — Dispute resolution

– Task 14 — Effective access to files

Section 3: Case study 3 — Mary Jane Smith

A case study and a series of short-answer questions:

– Task 15 — Prepare and check a loan application

Section 4: Working in financial services

– Task 16 — Financial services legislation and industry codes of practice

– Task 17 — Design a document

– Task 18 — Applying principles of professional practice to work in the financial services industry

– Task 19 — Develop and maintain in depth knowledge of products and services used by an organisation

Appendix 1: Key terms

Appendix 2: Client information collection tool/Fact finder

Appendix 3: Loan application.

How to use the study plan

We recommend that you use the study plan for this subject to help you manage your time to complete the written assignment within your enrolment period. Your study plan is in the KapLearn Certificate IV in Finance and Mortgage Broking (CIVMBv5) subject room.

Instructions for completing and submitting the written assignment

Completing the written assignment

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 assignments.

• Name your file as follows: Studentnumber_SubjectCode_Assignment_versionnumber_Submissionnumber
(e.g. 12345678_CIVMB_AS_v5A2_Submission1).

• Include your student ID on the first page of the assignment.

Before you submit your work, please do a spell check and proofread your work to ensure that everything is clear and unambiguous.

Word count

The word count shown with each question is indicative only. You will not be penalised for exceeding the suggested word count. Please do not include additional information which is outside the scope of the question.

Additional research

When completing the ‘Client information collection tool’ in Appendix 2, assumptions are permitted, although they must not be in conflict with the information provided in the Case study.

Throughout the assignment you will also be required to research additional information from other organisations in the finance industry to find the right products or services to meet your client’s requirements or to calculate any service fees that may be applicable.

Submitting the written assignment

Only Microsoft Office compatible written assignments submitted in the template file will be accepted for marking by Kaplan Professional Education. You need to save and submit this entire document.

Do not remove any sections of the document.

Do not save your completed assignment as a PDF.

The written assignment must be completed before submitting it to Kaplan Professional Education. Incomplete written assignments will be returned to you unmarked. The written assignment must be submitted together with the oral assignment. If you do not submit both completed assignments at the one time it will be returned to you unmarked.

The maximum file size is 20MB for the written and oral assignment. Once you submit your written assignment for marking you will be unable to make any further changes to it.

Once you submit your written assignment for marking you will be unable to make any further changes to it.

You are able to submit both assignments earlier than the deadline if you are confident you have completed all parts and have prepared a quality submission.

Please refer to the Assignment submission/resubmission videos in the Assessment section of KapLearn under your ‘Assignment Enrolment’ for details on how to submit/resubmit your written assignment.

Your Written Assignment and Oral Assignment must be submitted together on or before your due date. Please check KapLearn for the due date.

The written assignment marking process

You have 26 weeks from the date of your enrolment in this subject to submit your completed assignment.

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 assignment and return it to you in the Certificate IV in Finance and Mortgage Broking (CIVMBv5) subject room in KapLearn under the ‘Assessment’ tab.

Make a reasonable attempt

You must demonstrate that you have made a reasonable attempt to answer all of the questions in your written assignment. Failure to do so will mean that your assignment will not be accepted for marking; therefore you will not receive the benefit of feedback on your submission.

If you do not meet these requirements, you will be notified. You will then have until your submission deadline to submit your completed written and oral assignment.

How your written assignment is graded

Assignment 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 assignment:

• Assess your responses to each question, and sub-parts if applicable, and then determine whether you have demonstrated competence in each question.

• Determine if, on a holistic basis, your responses to the questions have demonstrated overall competence.

You must be deemed to be demonstrated in all assessment items in order to be awarded the units of competency in this subject, including:

• all of the exam questions

• the written and oral assignment.

Not yet demonstrated’ and resubmissions

Should sections of your assignment be marked as ‘not yet demonstrated’ you will be given an additional opportunity to amend your responses so that you can demonstrate your competency to the required level.

You must address the assessor’s feedback in your amended responses. You only need amend those sections where the assessor has determined you are ‘not yet demonstrated’.

Make changes to your original submission. Use a different text colour for your resubmission. Your assessor will be in a better position to gauge the quality and nature of your changes. Ensure you leave your first assessor’s comments in your assignment, so your second assessor can see the instructions that were originally provided for you. Do not change any comments made by a Kaplan assessor.

Units of competency

This written assignment is your opportunity to demonstrate your competency against these units:

FNSCRD301Process applications for credit
FNSFMB401Prepare a loan application on behalf of finance or mortgage broking clients
FNSFMB402Identify client needs for broking services
FNSFMB403Present broking options to client
FNSFMK505Comply with financial services legislation and industry codes of practice
FNSINC401Apply principles of professional practice to work in the financial services industry
FNSINC402Develop and maintain in-depth knowledge of products and services used by an organisation or sector
BSBITU306Design and produce business documents
BSBCUS301Deliver and monitor a services to customers
BSBCUS402Address customer needs
FNSSAM403Prospect for new clients
FNSFMB501Settle applications and loan arrangements in the finance and mortgage broking industry

Note that the written and oral assignment is one of two assessments required to meet the requirements of the units of competency.

We are here to help

If you have any questions about this written assignment 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.

Section 1: Case study 1 — Philip and Jennifer Brown

Background

Philip and Jennifer Brown are a young couple about to buy their first home. They have been married for five years and during that time have rented an apartment while saving for their own home.

Following a personal referral from Glenn Brown, Philip’s brother you have already had a first meeting with Philip and Jennifer to discuss their objectives and needs. They admitted they have little time to do much research of lenders, have limited knowledge of the loan products available and have approached you to guide them through the process as they are confused.

During (and subsequent) to your first meeting, Philip and Jennifer have provided the basic information documents — pay slips, tax returns, bank statements, property details for review/verification. You have now undertaken your preliminary assessment and need to discuss and present to them the proposal covering the options and your recommendations. It is important to get the proposal moving quickly, as the agent has indicated other parties are interested in the property.

They have been looking at properties for the past three months and have found a 10 year old established apartment that has really caught their eye, although they have some concern over the kitchen which requires some minor renovations.

They have not paid a deposit at this stage, but the Real Estate Agent has provided some guidance on additional fees and charges.

Following is a summary of the details of the property they wish to purchase, the couple’s financial and employment details, and the loan features they require.

The property

AddressUnit 1, 92 Seaside Lane Edgartown (Your state)
Purchase price$490,000
Description2 bedroom, 2 bathroom Strata Title apartment
Agent detailsStephanie Jones
Phone8123 1113
Mobile0412 880 088

The couple

Current addressUnit 12, 22 Wentworth Lane, Highville, (Your state)
Philip and Jennifer have lived there since March 2012
Home phone9123 2121

Funds position

Purchase price$490,000
Clients’ estimate of costs$25,000
Total required$515,000
Loan$440,000 + LMI
Clients’ total contribution (including deposit of $50,000)$75,000

Use fees and charges applicable to your state. If a servicing calculator you are using requires a postcode, select one that would represent a reasonable suburb/location in your city or state.

Assets

Capital Bank savings account (joint)$78,000
Capital Bank cheque account (joint)$1600
Holden Commodore SS 2007 (Philip)$25,000
Kia Cerato Sport 2015 (Jennifer)$9000
Superannuation — Capital Bank (Philip)$28,000
Superannuation — Capital Bank (Jennifer)$62,000
Household effects (insured value)$40,000

Liabilities

Capital Bank personal loan (Philip)$5,600 (repayments $180 p.m.)
Capital Bank Visa card (Philip)$200 (limit $4,000)
Capital Bank Visa card (Jennifer)$1,600 (limit $5,000)

Payments have always been met on time and any prior loans repaid in terms of contracts. The minimum monthly commitment on each of the credit cards should be calculated at 3% of the credit limit.

Living expenses

Annual expenditure for living expenses — $33,000.

Employment and income

Philip (date of birth 21/2/87)

PositionTeam Leader (full time)
EmployerACE Limited 101 City Rd, Westside (Your state)
Phone9800 1111
Income (gross)$58,000 p.a. monthly gross income: $4,833
Employer contactDwayne Johnson, HR Manager
Length of serviceSince October 2005
Driver’s licence8855KL
Email[email protected]

Jennifer (date of birth 8/10/88)

PositionAccountant (full time)
EmployerTech city 804 High Street, City East (Your state)
Phone9910 2033
Income (gross)$95,000 p.a. monthly gross income: $7,917
Employer contactBruce Wayne, HR Manager
Length of serviceSince March 2006
Driver’s licence17016C
Email[email protected]

Solicitor’s details

Jones and Co

22 High Street, City East (Your state)

Phone: 82811382

Email: jonesandco.net.au

The solicitor has quoted a fee of $1,500 for the conveyance.

The loan requirements

• 30 year term

• premium option home loan features

• variable interest rate (for this case use 4.5% p.a.)

• LMI to be capitalised

• proposed settlement date — six weeks from exchange of contracts

• ability to make additional payments from time to time without penalty

• fortnightly repayment option

• redraw facility

• funds access via card.

Note: Loan application fee is waived under Special Offer.

Other information

• They have advised that the Real Estate Agents have indicated they need to make a formal offer within the next 10 days, however they are reluctant to do so until they obtain an approval.

• Jennifer has asked if there are any professional package benefits available because she is an accountant. However, she did confirm she has not maintained her continuing professional development.

• Jennifer previously owned and lived in an apartment with her two older sisters when they attended university but they sold this before she married — they did not make a lot from sale.

• Family plans are five years away.

• They do have plans to take a major overseas trip before family comes along.

• Philip is hoping for a promotion within the next 12 months upon possible retirement of a long-term employee where he works.

  • They have also expressed a concern about the possibility of interest rates increasing.

Assignment tasks (student to complete)

Task 1 — Key terms, gathering and documenting client information

1. Complete the ‘Key terms’ (located at the end of the written assignment in Appendix 1).

2. Using the information provided in Case study 1, complete the ‘Client information collection tool’ (located at the end of the written assignment in Appendix 2).

3. You will also need to complete the Genworth Serviceability Calculator to assess the security, debt service and borrowing capacity for Jennifer and Phillip Brown. To do this, follow these steps:

(a) Use the details in Case study 1.

(b) Read the Genworth Calculator Supplementary Material Guide available in the Kaplearn CIVMBv5 subject room.

(c) Process the loan application using the Genworth Serviceability Calculator accessible here: <https://www.genworth.com.au/lenders/lmi-tools/serviceability-calculator>.

(d) Once you have processed it, download a copy of the PDF and save it to your desktop.

Note: You will need to upload a copy of this pdf with your written and oral assignment submission. This will assist your assessor with providing feedback on your written and oral assignment submission.

Note: Any assumptions you make should be listed and should not be in conflict with the case study information already provided.

Assessor feedback for Task 1 — Key terms, gathering and documenting client information

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 2 — Assessing the clients’ situation

1. Based on the information provided in the case study and any other online tools used, you now need to assess the clients’ loan application paying particular attention that you have met legislative requirements, followed industry codes of practice and met lender credit policy.

Comment on issues such as:

• does it appear to meet legislative requirements (e.g. NCCP)

• maximum borrowing capacity of client

• capacity to meet deposit and total cash contribution for the loan required

• repayment requirements based on the loan required

• what the security will be and if it is appropriate

• do Jennifer and Phillip require Lenders Mortgage Insurance (LMI), and if so, how much will it cost and what are the options to pay the fee

• what loan amount would you recommend, and why

• likelihood that the clients will be able to meet all their financial obligations

• do Jennifer and Philip qualify for concessions on any of the fees and charges

• any other issues that may impact, now or in the future, on the clients’ ability to meet their obligations, including any possible risks.

Provide data to support your comments and conclusions. (750 words)

Note: The assessment of the clients’ needs is a critical prelude to you completing Part 4 of the Oral assignment requirement for this course.

Student response to Task 2: Question 1

Answer here

2. (a) Most lenders stress test loan repayments by adding an additional 2–3% on to the loan repayments to make sure a borrower can afford the repayments. If interest rates moved 3% higher, what would Philip and Jennifer’s loan repayments be and do you think they would be able to cope with the extra repayments? (100 words)

Student response to Task 2: Question 2(a)

Answer here

(b) Identify appropriate product options you can present to the clients that may remove this interest rate risk? (50 words)

Student response to Task 2: Question 2(b)

Answer here

Assessor feedback for Task 2 — Assessing the clients’ situation

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 3 — Borrowing options

Although Philip and Jennifer are looking to borrow at approximately 90% LVR, what other options could you present that would avoid the cost of LMI? (100 words)

Student response to Task 3

Answer here

Assessor feedback for Task 3 — Borrowing options

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 4 — Reasonable enquiries

In the course of gathering information about the couple, you are required under the National Consumer Credit Protection Act 2009 to make all ‘reasonable’ enquiries to determine a borrower’s objectives, requirements and financial situation.

Identify at least six (6) ‘reasonable’ enquiries that you would make with the clients in the case study and explain why these enquiries are important in terms of NCCP compliance. (200 words)

Student response to Task 4

Answer here

Assessor feedback for Task 4 — Reasonable enquiries

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 5 — First Home Owners Grant and home buyer assistance schemes

Describe the First Home Owner’s Grant or home buyer assistance scheme benefits and stamp duty concessions that are available in your State or Territory, who would be eligible and what would be their benefit? Are Philip and Jennifer eligible for any assistance?

Note: Please identify which State or Territory you are from in your answer. (150 words)

Student response to Task 5

Answer here

Assessor feedback for Task 5 — First Home Owners Grant and home buyer assistance schemes

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 6 — Professional network and loan settlement process

1. Name three (3) parties, who are not directly involved in the processing of a loan and what their role is. Explain how you would communicate with them in an efficient and effective manner so that they understand pre-settlement conditions and their involvement required. (100 words)

Student response to Task 6: Question 1

Answer here

2. Explain how you would develop and maintain relevant networks with professionals such as those you detailed above or other professionals to ensure you are up to date with the products or services they provide. (100 words)

Student response to Task 6: Question 2

Answer here

3. You want to ensure that Philip and Jennifer have all the key insurance protections in place in case something unfortunate was to happen to one of them. What process would you follow during your discussion with the clients to ensure you have a good assessment of their needs? (100 words)

Student response to Task 6: Question 3

Answer here

4. Briefly explain why it is important for the broker to remain informed of developments in the lending process despite not being actively involved at every stage. (100 words)

Student response to Task 6: Question 4

Answer here

5. Application form and related documents have now been signed and forwarded to the Lender for approval. Philip and Jennifer have agreed that you will keep their Solicitor informed of progress if/when the loan is approved.

Refer to the ‘Example of an Organisation’s Policies and Procedures’ document in toolbox and explain what the service standards and timelines are up to and including the issue of offer letter and mortgage documents. (100 words)

Student response to Task 6: Question 5

Answer here

6. Clients have now called to execute loan offer and mortgage documents and are nervous that their Solicitor is very busy and difficult to contact. They want to know who will be responsible for what tasks from this point in the lead up to settlement and immediately following settlement.

Explain to Philip and Jennifer who is responsible for completion of what tasks once the loan documents have been returned to the lender and in the lead up to settlement and once settlement occurs. Focus on the lending organisation and the client’s solicitor/conveyancer roles in this part of the lending process. (150 words)

Student response to Task 6: Question 6

Answer here

Assessor feedback for Task 6 — Professional network and loan settlement process

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 7 — Interest rates

1. Conduct your own research and answer the following:

(a) What is the role of the RBA with respect to the movements of interest rates?

(b) Why is it important to have these controls and how do they impact mortgage loans in Australia?

(c) Are banks obliged to follow the RBA cash rate? Explain the reason for your answer.

(200 words)

Student response to Task 7: Question 1(a)–(c)

Answer here

2. Philip and Jennifer from Case study 1, have called to discuss whether they should fix the interest rate on their loan after having received several conflicting viewpoints from family and friends.

(a) Explain the process you would use to research and identify the various product options available to meet the needs of Philip and Jennifer.

(b) Explain to Philip and Jennifer two (2) advantages and two (2) disadvantages of fixing a loan over different fixed rate terms.

(150 words)

Student response to Task 7: Question 2(a)–(b)

Answer here

3. What other option/s can you suggest if they remain uncertain about whether to fix the rate on their loan? (100 words)

Student response to Task 7: Question 3

Answer here

Assessor feedback for Task 7 — Interest rates

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Section 2: Case study 2 — Richard and Pauline Jackson

Background

Richard and Pauline Jackson have a small mowing and gardening business in which they have been working for the last eight years. As it is only the two of them in the business they operate as a partnership.

They have approached you to help restructure their finance, as they are finding the management of their debts a struggle following the loss of one of their major commercial property contracts.

After further questioning, you realise that the situation is more serious than they originally explained; they had missed payments on their mortgage, only pay the minimum on their credit card of 3% each month and the work ute they have on lease is expiring. They have a $15,000 residual payment due and do not have the funds available.

They lost the major contract 12 months ago and fell behind on the mortgage payments soon after. They spoke to their lender (First and Last Bank) and a ‘hardship application’ was approved. The missed payments were corrected by extending the term of their loan. Nothing adverse was recorded on their credit file but they are still struggling with all the monthly commitments.

After reading the case study above and reviewing their funding position below, answer the questions that follow:

Assets

46 Walters Road, Ritchfield$490,000
First and Last Bank savings account (joint)$1,200
Little Saving Building Society cheque account (joint)$2,300
Business debtors (unpaid invoices for work)$6,200
Ford Utility, 3 years old (work vehicle)$25,000
Holden Commodore, 7 years old (family car)$15,000
Superannuation — AMB Insurance (Richard)$46,000
Superannuation — AMB Insurance (Pauline)$29,000
Household effects (insured value)$66,000

Liabilities

LenderSituationInterest rateMonthly repaymentDebt
First and Last Bank (home loan — joint)Currently up to date though had three-month extension to contract after hardship application 12 months ago5.7%$1,567.00$270,000
Big Bank Visa card (Richard)Only able to repay 3% per month for last six months18.95%(pays 3% per month) $240.00$7,800 (limit $8,000)
Little Bank Visa card (Pauline)Only able to repay 3% per month for last six months Is over limit by $80021.5%(pays 3% per month) $90.00$3,800 (limit $3,000)
My Domain Furniture StoreDid not keep to interest free contract and paying debt by instalments28.50%$370.00$3,400
Super Car Loan leaseFour-year contract expiring next month and need $15,000 to pay residualn/a$850.00$15,000 (residual)
Total

$3,117.00$300,000

Assignment tasks (student to complete)

Task 8 — Establishing level of financial knowledge

1. What communication skills would you use to establish rapport and build a relationship with clients. (150 words)

Student response to Task 8: Question 1

Answer here

2. Refer to the ‘Example of an organisation’s policies and procedures’ document found in the toolbox and outline what service standards you should meet to provide a high level of service to clients. Include timelines for returning client enquiries etc. in your response. (150 words)

Student response to Task 8: Question 2

Answer here

3. List two (2) questions that you would use to effectively communicate with the clients to confirm Richard and Pauline’s understanding and knowledge about credit and finance.

List a further two (2) questions that you would ask to identify or confirm their current financial position, including establishing their requirements and objectives with the refinance?

Advise where you would record the client’s responses.

(150 words)

Student response to Task 8: Question 3

Answer here

Assessor feedback for Task 8 — Establishing level of financial knowledge

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 9 — Responsible lending obligations

The National Consumer Credit Protection Act 2009 imposes ‘responsible lending’ obligations on brokers that must be satisfied by all people arranging loan applications. The primary objective under responsible lending guidelines is that the credit facility offered to the borrower is ‘not unsuitable’ for the borrower, meets their requirements and objectives and will not create substantial hardship.

1. Refer to ‘What is substantial hardship?’ available in the toolbox. In your own words how would you define ‘substantial hardship’ (detailed information on this subject is found at RG 209 issued by ASIC)? (150 words)

Student response to Task 9: Question 1

Answer here

2. What are the benefits of debt consolidation for Richard and Pauline? (100 words)

Student response to Task 9: Question 2

Answer here

3. Richard and Pauline have decided to consolidate their debts into their home loan with two splits, one for the existing home loan and a second split for all other debts.

In the template below provide a new liabilities summary once Richard and Pauline have completed the debt consolidation including their new monthly repayments.

Note: They have chosen to refinance with ‘One State Bank’ who are offering a 4.5% interest rate on a variable, principal and interest loan over 30 years.

Student response to Task 9: Question 3

LenderInterest rateMonthly repaymentDebt
Answer hereAnswer hereAnswer hereAnswer here








Total


4. What savings will Richard and Pauline obtain in monthly repayments?
(Remember to show the calculation of how you determined the savings). (100 words)

Student response to Task 9: Question 4

Answer here

Assessor feedback for Task 9 — Responsible lending obligations

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 10 — Self-employed special considerations

1. As Richard and Pauline are self-employed, what documents will you need to obtain to verify and assess their income? (150 words)

Student response to Task 10: Question 1

Answer here

2. If a Low-doc application is an option for the customer, name three (3) extra documents you will need to obtain and assess. Explain how each of these documents will establish their income. (150 words)

Student response to Task 10: Question 2

Answer here

3. Explain how applying for a Low-doc loan could lead the mortgage broker to be accused under NCCP of recommending an ‘unsuitable’ product. (250 words)

Student response to Task 10: Question 3

Answer here

Assessor feedback for Task 10 — Self-employed special considerations

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 11 — Advising on strategies

Following the presentation of your proposal, Richard and Pauline say that they would like your advice on strategies that could help them to repay their home loan as quickly as possible.

• List at least three (3) strategies or methods that will help them achieve their aim.

• Explain how each strategy will result in a home loan being repaid more quickly.

Note to students: You may refer to the MoneySmart website for information on this subject and your answer may also include, but not be restricted to, available mobile phone apps used for debt management. (300 words)

Student response to Task 11

Answer here

Assessor feedback for Task 11 — Advising on strategies

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 12 — Impact of credit history

Richard tells you that his former wife failed to properly meet their unsecured personal loan debt obligations before they separated. Although he eventually repaid the debt, he is afraid that this incident may count against him when he applies for a loan. There are a few things Richard can do as he is concerned about his credit rating. What information would you provide in the following situations?

1. Provide Richard with the details of two (2) major credit reporting agencies and explain what information may be recorded on his credit file. Information can be sourced from the websites of credit reporting agencies and the Office of the Australian Information Commissioner. (200 words)

Student response to Task 12: Question 1

Answer here

2. Richard has decided he would like to obtain a copy of his credit report from either Equifax or illion Data Registries (formerly Dun & Bradstreet). Explain what options are available for the chosen provider, how long it takes to obtain a copy, and the associated costs. (100 words)

Student response to Task 12: Question 2

Answer here

3. If there are errors on file, what are the options for Richard to follow in order to have these errors rectified? To assist you with answering this question, refer to the Equifax website. (150 words)

Student response to Task 12: Question 3

Answer here

4. What obligation does the Privacy Act impose on the Lender to supply the client, in terms of certain information, if they decline an application due to the content of the credit agency file? (100 words)

Student response to Task 12: Question 4

Answer here

5. What alternate options can you suggest to Richard and Pauline in the event that the loan was rejected by the lender you initially proposed due to a credit report? (150 words)

Student response to Task 12: Question 5

Answer here

Assessor feedback for Task 12 — Impact of credit history

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 13 — Dispute resolution

1. Due to delays in loan processing, Richard has lodged a complaint with you about the time it’s taking to get an approval on the loan. Although you’ve explained that this is because of delays with the lenders processing system due to staff shortages, you’re concerned the matter may escalate beyond your control.

(a) You are now required to record Richard’s feedback by completing the Customer Complaint Report below.

Student response to Task 13: Question 1a

Customer Complaint Report
Customer nameAnswer here


Title (Mr, Mrs, etc.)
Family Name (surname)
Given names
Answer here
Answer here
Answer here
Service being provided to client
Answer here
Nature of complaint
Answer here

(b) Provide a response to Richard explaining the process going forward and what actions you will take regarding his complaint in the box below.

Student response to Task 13: Question 1b

Answer here

(c) Refer to the ‘Example of an Organisations Policies and Procedures’ document in the toolbox. Produce a short report which identifies and recommends ways that you may be able to improve these Policies and Procedures, to keep clients like Richard up to date on the progress of the loan application in the box below:

Student response to Task 13: Question 1c

Answer here

2. As a broker it is important to understand the role of the Financial Ombudsman. Explain the function and role of the Australian Financial Complaints Authority (AFCA) in the External Dispute Resolution (EDR) process and the options available to the claimant once a determination is made. (200 words)

Student response to Task 13: Question 2

Answer here

3. What could be the maximum financial compensation limit amount payable to a consumer borrower through AFCA for a claim for direct financial loss? (10 words)

Note: This may require some internet research.

Student response to Task 13: Question 3

Answer here

Assessor feedback for Task 13 — Dispute resolution

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Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 14 — Effective access to files

The loan application is finally approved. Loan offers have been produced by the lender, as have numerous documents that the client needs to access and review. The lender has requested these documents be forwarded as soon as they are available. Richard and Pauline are away at the moment and their email provider has a size limit on the data that can be sent via email. Name a service provider that could assist in solving this problem and explain how the service could assist with solving this problem. (70 words)

Student response to Task 14

Answer here

Assessor feedback for Task 14 — Effective access to files

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Section 3: Case study 3 — Mary Jane Smith

Task 15 — Prepare and check a loan application

Mary Jane Smith: Client Background

Mary Jane Smith is a young professional, excelling in her career within the IT industry. She has saved hard and is ready to purchase a property of her own.

Her objective is to pay the loan down quickly and then use the equity in the property to purchase another. She would like to build a small property portfolio over the next eight to 12 years.

You have met with her a few times and exchanged several emails and telephone calls. She has complimented you on a few occasions for the service and guidance you have provided so far.

Mary has been cautious in finding and then negotiating the purchase of this property. It is now time to get an application to a lender. You have gathered appropriate documents and completed all necessary checks. Everything is looking positive to proceed.

1. Using the details in the Example Fact Find for Mary Jane Smith in the Toolbox, prepare a loan application by completing Appendix 3 in this written assignment.

2. Using the following list, select which basic items below will need to be gathered from Mary as the supporting documentation necessary for her loan application:

Personal details

☐ Birth certificate or driver’s license

☐ Passport or Birth certificate

☐ Bank debit card ☐ Medicare card ☐ Utility/Phone bill

☐ Last six months savings account statements

☐ Last three months credit card statements

Proof of income

☐ Three current pay slips

☐ Signed letter from employer on letterhead (must have ABN)

☐ Latest year’spersonal tax return and tax assessment notice

☐ If self-employed — last two-year financial tax return and assessment notices

☐ If self-employed and no financials — three of the following four:

☐ Last 12 months BAS returns

☐ Original signed letter from accountant detailing net income, and how it was ascertained

☐ Last six months business bank statements

☐ Last 12 months ATO tax portal statements from the ATO

☐ For rental properties — copy of last three months lease statements, copy of agreement or letter from real estate agent

Refinance

☐ Last six months loan statement

Property purchase

☐ Copy of contract/offer including title details

Construction

☐ Council approved plans and specifications

☐ Building contract

☐ Quotes for additional work

3. Before submitting Mary’s loan application, you must check her details thoroughly to ensure accuracy. Using the following two items available in the toolbox, check that the personal details and current employment details section of Mary’s Fact Find document and loan application are accurate and identify three (3) errors. Write your answer in the box below.

• example driver’s license

• example pay slip.

Student response to Task 15: Question 3

Answer here

4. Refer to the ‘Example of an Organisations Policies and Procedures’ document in the toolbox and provide at least two (2) examples in each question of how Mary’s loan application complies with each of the below:

(a) The organisational credit policy.

Student response to Task 15: Question 4(a)

Answer here

(b) Legislative requirements (particularly NCCP).

Student response to Task 15: Question 4(b)

Answer here

(c) Industry Code of Practice.

Student response to Task 15: Question 4(c)

Answer here

Assessor feedback for Task 15 — Prepare and check a loan application

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Section 4: Working in financial services

Task 16 — Financial services legislation and industry codes of practice

1. Conduct some research and identify two (2) websites that you could use to keep up to date with legislative changes and two (2) websites for changes in Industry codes of practice. (50 words)

Student response to Task 16: Question 1

Answer here

2. Describe the key features of:

(a) The National Consumer Credit Protection Act 2009. (150 words)

Student response to Task 16: Question 2(a)

Answer here

(b) The Privacy Act.

Student response to Task 16: Question 2(b)

Answer here

(c) Code of Practice.

Student response to Task 16 Question 2(c)

Answer here

3. How would you communicate any changes in legislation or codes of practice to colleagues? (100 words)

Student response to Task 16: Question 3

Answer here

4. An Australian Credit Licencee must maintain statutory records; such as financial records, membership certificates, insurance policies, training and risk assessment registers.

Explain how these could be managed to ensure they are secure and available for easy retrieval when updating is required. (50 words)

Student response to Task 16: Question 4

Answer here

Assessor feedback for Task 16 — Financial services legislation and industry codes of practice

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 17 — Produce a document

You have recently joined YS Finance, a small broking business. Your employer has asked you to design a personalised ‘CPD Register’ where you will record any training and personal development that you undertake in your role as a mortgage broker.

Using the organisational requirements from the ‘YS Finance Personalised CPD Register checklist’ in the toolbox, you will need to create a CPD Register in a new word document.

Your CPD Register should include a table with the following column headings:

• date

• activity

• duration

• content

• method

• location

• CPD points allocated.

Once you have created your CPD Register, you will need to do the following:

1. Save a copy of the CPD Register to your desktop.

2. Print the document.

3. Take a clear photo of the document and a screen snipping of the document from your screen.
To do this you will need to use the Snipping Tool on your device and a camera.

4. Insert a copy of the photo and the screen snipping into the box below.

Remember to do the following:

• Proofread your CPD Register prior to printing, to ensure there are no spelling errors.

• Adhere to all of the organisational requirements outlined in the ‘YS Finance Personalised CPD Register checklist’.

Student response to Task 17

Answer here

Assessor feedback for Task 17 — Produce a document

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Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 18 — Applying principles of professional practice to work in the financial services industry

As a mortgage broker, you are required to complete 20 points per annum of Continuous Professional Development (CPD). This task requires you to identify and evaluate appropriate professional development (PD) opportunities available to you in the industry. In this task, you will need to visit the Education and Events page on the Mortgage and Finance Association of Australia (MFAA) website: <https://www.mfaa.com.au/education-events/courses>.

Identify two (2) professional development events that you would like to attend after your studies and complete the table below.

Note: You can list events that are available online.

Student response to Task 18

Course NameDescribe what the event is aboutWhy have you selected this event?How will this event help you to develop professionally in industry?As a non-member, what is the fee associated with participating in this event?What is the CPD value?
Answer here
Answer here
Answer here
Answer here
Answer here
Answer here
Answer here
Answer here
Answer here
Answer here
Answer here
Answer here

Assessor feedback for Task 18 — Applying principles of professional practice to work in the financial services industry

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Task 19 — Develop and maintain in-depth knowledge of products and services used by an organisation

1. There are three (3) main types of products used in finance and mortgage broking: variable rate home loans, fixed interest rate home loans and a line of credit.

Using the table below, define each product, its strengths, its weaknesses and how it is promoted. You should list at least two (2) strengths and two (2) weaknesses for each product.

Write this in your own words.

Student response to Task 19: Question 1


Product/service definitionStrengthsWeaknessesPromotion
Variable rate home loansAnswer here
Answer here
Answer here
Answer here
Fixed interest rate home loansAnswer here
Answer here
Answer here
Answer here
Line of creditAnswer he reAnswer here
Answer here
Answer here

2. This exercise requires you to compare refinancing options for a home loan to report on the benefits and disadvantages of selecting a particular refinancing option.

To complete this task, you will need to visit <www.canstar.com.au>.

What service does Canstar provide?

Student response to Task 19: Question 2

Answer here

3. You now need to examine the current rate, comparison rate and monthly repayment applicable to refinancing a home loan by comparing home loans.

Enter the following details to compare:

Loan amount: $350,000

Loan purpose: Refinance

Type: Variable rate loan

State: NSW

Using the Sort feature on the website, fill in the table below for the product with:

Student response to Task 19: Question 3(a)–(c)


Provider nameLoan type:Current rateComparison rateMonthly repayment
(a) lowest comparison rate?Answer here
Answer here
Answer here
Answer here
Answer here
(b) highest monthly repayment?Answer here
Answer here
Answer here
Answer here
Answer here
(c) highest star rating?Answer here
Answer here
Answer here
Answer here
Answer here

4. Answer the following questions about home loan products.

(a) As a mortgage broker, how would you keep informed about updates to the various home loan product options in your organisation or elsewhere?

Student response to Task 19: Question 4(a)

Answer here

(b) Describe one (1) emerging trend in variable rate home loans.

Note: This may require some internet research.

Student response to Task 19: Question 4(b)

Answer here

Assessor feedback for Task 19 — Develop and maintain in-depth knowledge of products and services used by an organisation

(Insert Feedback)
Question(s) that need to be resubmitted (if required)(List question numbers)
First submission
Resubmission (if required)

Appendix 1: Key terms

1. In your own words, and using the grid below; define and explain loan transaction terminology and definitions of the following:

Lender and borrowerAnswer here
Lessor and lesseeAnswer here
Mortgagee and mortgagorAnswer here

2. In your own words, and using the grid below; explain what the different documentation required by a lender is:

Credit check authority signedAnswer here
GuaranteesAnswer here
Loan contractAnswer here
Periodical payment authorityAnswer here
Signed application formAnswer here

3. In your own words, and using the grid below; describe:

The negotiation processAnswer here

Appendix 2: Client information collection tool/Fact finder

Appointment date: Student to insert date

Appointment time: Student to insert time


Applicant 1Applicant 2
SurnameAnswer here
Answer here
Other namesAnswer hereAnswer here
Contact detailsAddressAnswer hereAnswer here
Phone (W) Phone (H)Answer hereAnswer here
MobileAnswer hereAnswer here
EmailAnswer hereAnswer here
EmploymentAnswer hereAnswer here
How long?Answer hereAnswer here
Previous employer (if less than two years)Answer hereAnswer here
How long?Answer hereAnswer here
Employment type
(FT/PT/Casual/Self-employed)
Answer hereAnswer here
Gross income (p.a.)Answer hereAnswer here
Number of dependantsAnswer hereAnswer here
Motor vehiclesAnswer hereAnswer here
Loan purposeAnswer here
Purchase price/ValuationAnswer here
Deposit on propertyAnswer here
Loan amountAnswer here
Borrowing capacity (using Genworth serviceability calculation)Answer here

Assets and liabilities

AssetsLiabilities
DetailsMarket valueDetailsMonthly paymentsAmount owing
Owner Occupied Property at:Answer hereMortgage with:Answer hereAnswer here
Investment Property at:Answer hereMortgage with:Answer hereAnswer here
Cash at bank
(includes fixed deposits)
Answer hereCar leasingAnswer hereAnswer here
Other cash
(includes offset accounts)
Answer herePersonal loans 1. 2.Answer hereAnswer here
Deposit paid on property (only if paid)Answer hereOverdraftAnswer hereAnswer here
Motor vehicles: 1. 2.Answer hereOther loans: 1. 2.Answer hereAnswer here
Personal effectsAnswer hereCredit card limit: Answer hereAnswer hereAnswer here
Business value (if self-employed)Answer hereCredit card limit: Answer hereAnswer hereAnswer here
Shares and investmentsAnswer hereOther:Answer hereAnswer here
SuperannuationAnswer hereOther:Answer hereAnswer here
Other assets (give details)Answer hereOther:Answer hereAnswer here
Total assetsAnswer hereTotal liabilitiesAnswer hereAnswer here

Surplus/deficiency: (Total assets less Total liabilities) $Answer here

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


MONTHLY LIVING EXPENSESAnswer here

Needs analysis

1Name of your current lender?Answer here
2What type of mortgage loan do you have?Answer here
3Why did you choose this particular loan and lender?Answer here
4What is the interest rate?Answer here
5What are your payments?AmountAnswer here
6FrequencyAnswer here
7Do you know the fees and charges?Answer here
8What is your proposed purpose for the loan you are applying for?Answer here
9Branch access available with current lenderAnswer here
10Internet banking available with current lenderAnswer here
11Phone banking available with current lenderAnswer here
12Lenders not to be consideredAnswer here
13Type of loan soughtAnswer here
14Preferred Interest rate rangeAnswer here
15Payment frequencyAnswer here
16RedrawAnswer here
17OffsetAnswer here
18Salary creditingAnswer here
19Low fees and chargesAnswer here

Notes

NB: Providing substantive notes here is a compulsory part of your assessment.

Answer here

Anticipated fees and charges

Anticipated purchase priceAnswer here
Deposit on propertyAnswer here
Loan amountAnswer here
LVRAnswer here
Purchase costs
Stamp duty on transfer (include transfer fee)Answer here
Solicitor/conveyancer (estimate)Answer here
Rates and land taxes (estimate)Answer here
Pest inspection (estimate)Answer here
Building Inspection (estimate)Answer here
Borrowing costs
Application/establishment feeAnswer here
Valuation feeAnswer here
Security admin feeAnswer here
LMIAnswer here
Registration of mortgageAnswer here
Release of mortgageAnswer here
Search feesAnswer here
OtherAnswer here
Total purchase and borrowing costsAnswer here

Funds to complete

PURCHASE AND LOAN COSTS:AVAILABLE FUNDS:
Purchase price:Answer hereDeposit if paidAnswer here
Lender application/valuation fees:Answer hereCash savings:Answer here
Transfer stamp duty/transfer feeAnswer hereSale proceeds:Answer here
Government registration feesAnswer hereGift:Answer here
Solicitors fees:Answer hereFHOG:Answer here
OtherAnswer hereOther:Answer here
Lenders Mortgage Insurance Added to Loan Yes / NoAnswer hereOther:Answer here
TOTAL COSTS (A):Answer hereTOTAL OWN FUNDS (D):Answer here
LOAN AMOUNT REQUESTED (B):Answer hereOWN FUNDS REQUIRED (A–B) = C:Answer here
OWN FUNDS REQUIRED (A–B) = CAnswer hereSURPLUS/SHORTFALL (D–C)Answer here

Loan interview diary

Name(s) of client(s) present at interview

Answer here



Date of interview

Answer here

Location of interview

Answer here

Indicate all clients who were interviewed in person

Answer here



Do all of the clients appear to clearly understand English? Y/N

If not, have the services of an interpreter been recommended? Y/N

Do all of the clients clearly benefit from taking out this loan? Y/N

If not, what inquiries have been made to ascertain the level of benefit to each party of the loan?

Answer here



Are any clients acting as though they are under duress or other disability? Y/N

Are any clients acting as though they are unsure of anything about the loan? Y/N

Are any of the clients acting as though they are unable to comprehend their obligations? Y/N

Are there any guarantors? Y/N

If yes is answered to any of the above questions, have the clients been advised to seek
the services of a lawyer or financial adviser? Y/N

Provide details of other pertinent information obtained during the loan interview which may be of interest or of any unusual circumstances you may wish to record.

Answer here

Appendix 3: Loan application

Cover sheet

Applicant nameAnswer here
Broker nameAnswer here
Contact phone/MobileAnswer here
Email addressAnswer here

Solicitor/conveyancer details

NameAnswer here
AddressAnswer here
Contact phone/MobileAnswer here
Email addressAnswer here

Loan summary

Loan amountAnswer here
Loan termAnswer here
Variable or Fixed rateAnswer here
Principal and Interest or Interest onlyAnswer here

Broker notes and recommendation

Answer here

Loan application details


Applicant 1Applicant 2
Personal details
SurnameAnswer here
Other namesAnswer here
Date of BirthAnswer here
Marital StatusAnswer here
Number of DependentsAnswer here
Contact detailsCurrent addressAnswer here
Time at addressAnswer here
Phone (W) Phone (H)Answer here
MobileAnswer here
EmailAnswer here
Previous Address (if less than 2 years)Answer here
Current employment details
Employer and contact detailsAnswer here
Job TitleAnswer here
Employment type
(FT/PT/Casual/Self-employed)
Answer here
How long?Answer here
Previous employer (if less than two years)Answer here
How long?Answer here
Employment type
(FT/PT/Casual/Self-employed)
Answer here
Income details
Gross salary per annumAnswer here
Monthly net salaryAnswer here
Social securityAnswer here
PensionAnswer here
Other — specifyAnswer here

Loan details

Loan product 1

Product nameAnswer hereLoan amountAnswer here
Loan term (years)Answer hereInterestAnswer here
Loan purposeAnswer here
Options required

Security details

Security property 1

Address of propertyAnswer here
Estimated value/purchase priceAnswer here
Property typeAnswer hereNumber of bedroomsAnswer here
LVRAnswer hereApprox. floor area (if known)Answer here

Assets and liabilities

Savings, term deposits and other accounts

Name of institutionAccount typeOwnerCurrent balance
Answer hereAnswer hereApplicant 1: % Applicant 2: %Answer here

Investments including superannuation, life insurance, shares, trusts

Name of institutionInvestment typeOwnerCurrent balance
Answer hereAnswer hereApplicant 1: % Applicant 2: %Answer here

Motor vehicles

Make and modelYear builtOwnerMarket value
Answer hereAnswer hereApplicant 1: % Applicant 2: %Answer here

Other assets including personal effects, cash, boats, tools of trade etc.

Personal effects and household items
(furniture, electrical goods, clothing, jewellery, etc.)
Applicant 1: % Applicant 2: %Answer here
OthersApplicant 1: % Applicant 2: %Answer here
Total assetsAnswer here

Liabilities

Credit cards

Name of LenderBorrowerInterest rateLimitBalance
Answer hereApplicant 1: % Applicant 2: %%Answer hereAnswer here
Answer hereApplicant 1: % Applicant 2: %%Answer hereAnswer here

Other loans

Lender and loan typeBorrowerLoan repaymentLimitBalance

Applicant 1: % Applicant 2: %$$$
Total liabilitiesAnswer here





Surplus/deficiencyAnswer here

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