Part -1:
1. During an initial appointment with a prospective client, the client asks you "What the mortgage broking process is and how it all works". Please provide a brief written response answering the client's query.
2. The same client then goes on to explain that he had heard something about the 'Responsible Lending Obligations & Conduct'. Please provide a written response to explain the key concepts and ideas behind the Responsible Lending Obligations & Conduct, and the objectives of the Responsible Lending Obligations.
3. During the initial interview with the client, you present them with a Credit Guide. As a Credit Representative, please provide an explanation of what type of information would be contained in the Guide and its purpose in the mortgage broking process?
4. Please provide an overview of the various credit disclosure documents required to be provided when providing credit assistance (as a Mortgage Broker).
5. Explain the importance of ethical behaviour when acting in the capacity of a Mortgage Broking, and include the concept of ‘agency' relationships that Mortgage Brokers have with their clients (the Law of Principals and Agents).
6. Describe 3 methods that you could use to keep up-to-date with products, services and the competition.
7. If you work in a financial services workplace, please select 3 products/services that are used in your organisation. If you are not in a financial services workplace select 2 financial products/services that you would like to learn about. For each of the financial products and/or services provide an overview of:
1. The characteristics of each financial product / service
2. The promotional strategy used
3. Compliance implications
4. The customers suited to the product
The following table is a guide as to what your overview should address.
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Heading
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Guide
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Financial Product/Service
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Purpose
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The characteristics
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Strengths, weaknesses, terms and conditions
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The promotional strategy
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Strategic, marketing and promotional plans of the organisation
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Compliance implications
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For example: NCC requirements, industry code of practice, Acts, Product disclosure statement
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The customers suited to the product
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For example: ability to change service, age, amount of savings and income, family concerns, flexibility of service
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Comparison with other products
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Name other similar products and identify the similarities and differences
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8. A client is interested in taking out a loan, but is unsure how much collateral they should contribute. They have heard about Lenders Mortgage Insurance (LMI) and have the view that LMI is designed to protect them (the borrower) should they lose their job or become ill. Please explain the concept of LMI, who LMI is designed to protect, who calculates the LMI premium, and the options to pay the LMI premium.
Part -2:
1. Explain what the ‘Six C's of Lending' are and their importance in relation to a Mortgage Broker demonstrating they have acted in accordance with the ‘Responsible Lending Obligations'.
2. Name and explain the various types of security that may be required by lenders.
3. Provide an overview of the Settlement Process, and be sure to include information about the parties involved and the documentation required for settlement.
4. Describe how you keep up with the changes, issues and laws relating to disclosure and compliance of legal environment for the finance industry.
5. When negotiating with a client regarding a loan, what techniques might you use in the negotiation and why?
6. Describe in writing the tasks that need to be done and the documents that need to be completed to prepare for settlement of finance approval and the mortgage advance. Develop an action plan of tasks in priority order - include dates etc.
Please include:
- the parties that you need to liaise and communicate with, what needs to be communicated and at what point
- any other settlement issues
- approving personnel.