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Most brokers uncertain about writing low doc loans are hesitant now purely because of the media hype that followed ASIC’s recent broker audit, Mario Rehayem has claimed.
Speaking to the MortgageMix, the Pepper Home Loans director for sales and distribution said the issues that surrounded the low doc reprimand also surfaced in the same audit for full-doc loans.
“But they were not spoken about,” he added.
“The fact is, under the NCCP legislation both loan categories are required to follow the same verification principals. There is no difference,” Rehayem said.
He also made the point that one upshot of the new credit protection is the requirement for more fact finding - for brokers to verify income and fulfill their responsible lending obligations.
He said the ‘old days’ of writing low doc loans are gone, and that brokers will now need to spend more time preparing credit applications.
“An extra hour spent proving income in front of a client might save months later on in front of a magistrate,” he said.
About broker education, Rehayem said Pepper intended to ‘invest heavily’ in specialist lending instruction in 2012.
He said the training regime would be comprehensive, including webinars and workshops.
ASIC will be merciless, legal consultant warns on low docs - Kym Dalton principal at mortgage broker advisory firm SAKS Consulting has said his intuition tells him that ASIC is a "mailed fist in a velvet glove" - while it appears amiable on the outside, underneath the financial services regulator is entirely merciless.
Low docs fail ASIC’s first NCCP test - ASIC’s first mortgage broker review has found some risks of non-compliance with the responsible lending requirements of the NCCP - particularly in the low doc space.
Pepper Home Loans: Too early to get excited - Australian housing prices will continue to dip slightly over the next few months then level out, Mario Rehayem has predicted.
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