Potential borrowers should be prepared to hand over even more information during the mortgage application process... Slater & Gordon shares slump 51% on U.K. whiplash proposals...
ASIC indicates mortgage brokers should be verifying borrowers' expenses
Potential borrowers should be prepared to hand over even more information during the mortgage application process, after the Australian Securities and Investment Commission (ASIC) indicated that brokers should be taking a closer look at peoples finances.
Speaking to MPA's sister publication, Greg Ashe director of Australian Credit Licensing and National Consumer Credit Protection (NCCP) Act specialists QED Risk Services, said he had recently met with ASIC representatives who told him brokers should be taking greater steps to verify borrowers' expenses.
Currently brokers often enquire about the living expenses of borrowers and then compare them to benchmark standards, but Ashe told Australian Broker that the regulator expected brokers to be using documents such as credit card and bank statements to verify claims.
“It was mutual astonishment really. I was completely astonished that that is what their expectation was and they were completely astonished that the industry is not already doing this,” Ashe told Australian Broker.
“They were of the strong impression that they have already made it clear enough that that is what was expected. They were mortified,” he said.
Ashe said he believed the requirement to examine statements is beyond what brokers are bound to do by the NCCP Act.
According to Ashe, chapter 3 of the NCCP Act requires that brokers must “take reasonable steps to verify the consumer’s financial situation” but this requirement does not differentiate between income and expenses, meaning there is no legal requirement for brokers to obtain statements.
“I am certainly not saying that a broker would never want to do this, and this is the beauty of being a broker – you get to have these real conversations with the consumer and establish a rapport with your clients.
“So if a broker thinks something is a bit odd because their client is saying they earn this much and spend this much and it doesn’t sound right then that might be a time when the broker asks to go through their budget in detail and ask for bank statements and credit card statements.”
Slater & Gordon shares slump 51% on U.K. whiplash proposals
(Bloomberg) -- Slater & Gordon Ltd. lost half its value in Sydney trading after the U.K. announced proposals to change the legal rights of people injured in car accidents.
The law firm’s shares tumbled 51 percent to 94 Australian cents on record high volume. Chancellor of the Exchequer George Osborne announced measures on Wednesday to tackle questionable whiplash claims, including removing the right to general damages for minor soft-tissue injuries from a car accident. He also plans to cut legal costs by transferring personal injury claims of as much as 5,000 pounds ($7,560) to the small claims court.
Slater & Gordon doesn’t expect the proposals will affect its earnings in the 2016 financial year, it said in a regulatory filing Thursday. The company has 3,800 employees in the U.K., more than twice as many as in Australia, according to its website.
“People are taking a cautious, worst-case approach,” said Gareth James, a Sydney-based analyst at Morningstar Inc. “There’s a lot of concern around exactly what the earnings are going to be in their U.K. business.”
Thursday’s plunge extended Slater & Gordon’s slide this year to 84 percent.
The firm said in June that it had misreported U.K. cash flows and was responding to queries from Australia’s market regulator over its audit process. Investor concern that it paid too much for Quindell Plc’s personal services division also has weighed on the shares. Slater & Gordon announced the 637 million pound acquisition in April, saying it would create “the number- one personal injury law group in the U.K." In June, the U.K. regulator said it was probing Quindell’s accounting policies.
Potential borrowers should be prepared to hand over even more information during the mortgage application process, after the Australian Securities and Investment Commission (ASIC) indicated that brokers should be taking a closer look at peoples finances.
Speaking to MPA's sister publication, Greg Ashe director of Australian Credit Licensing and National Consumer Credit Protection (NCCP) Act specialists QED Risk Services, said he had recently met with ASIC representatives who told him brokers should be taking greater steps to verify borrowers' expenses.
Currently brokers often enquire about the living expenses of borrowers and then compare them to benchmark standards, but Ashe told Australian Broker that the regulator expected brokers to be using documents such as credit card and bank statements to verify claims.
“It was mutual astonishment really. I was completely astonished that that is what their expectation was and they were completely astonished that the industry is not already doing this,” Ashe told Australian Broker.
“They were of the strong impression that they have already made it clear enough that that is what was expected. They were mortified,” he said.
Ashe said he believed the requirement to examine statements is beyond what brokers are bound to do by the NCCP Act.
According to Ashe, chapter 3 of the NCCP Act requires that brokers must “take reasonable steps to verify the consumer’s financial situation” but this requirement does not differentiate between income and expenses, meaning there is no legal requirement for brokers to obtain statements.
“I am certainly not saying that a broker would never want to do this, and this is the beauty of being a broker – you get to have these real conversations with the consumer and establish a rapport with your clients.
“So if a broker thinks something is a bit odd because their client is saying they earn this much and spend this much and it doesn’t sound right then that might be a time when the broker asks to go through their budget in detail and ask for bank statements and credit card statements.”
In depth: BDM in the spotlight: Vanessa Hyde
This week's ANZ BDM for Queensland has been with the bank for 18 years, 12 of those as a BDM.
This week's ANZ BDM for Queensland has been with the bank for 18 years, 12 of those as a BDM.
Slater & Gordon shares slump 51% on U.K. whiplash proposals
(Bloomberg) -- Slater & Gordon Ltd. lost half its value in Sydney trading after the U.K. announced proposals to change the legal rights of people injured in car accidents.
The law firm’s shares tumbled 51 percent to 94 Australian cents on record high volume. Chancellor of the Exchequer George Osborne announced measures on Wednesday to tackle questionable whiplash claims, including removing the right to general damages for minor soft-tissue injuries from a car accident. He also plans to cut legal costs by transferring personal injury claims of as much as 5,000 pounds ($7,560) to the small claims court.
Slater & Gordon doesn’t expect the proposals will affect its earnings in the 2016 financial year, it said in a regulatory filing Thursday. The company has 3,800 employees in the U.K., more than twice as many as in Australia, according to its website.
“People are taking a cautious, worst-case approach,” said Gareth James, a Sydney-based analyst at Morningstar Inc. “There’s a lot of concern around exactly what the earnings are going to be in their U.K. business.”
Thursday’s plunge extended Slater & Gordon’s slide this year to 84 percent.
The firm said in June that it had misreported U.K. cash flows and was responding to queries from Australia’s market regulator over its audit process. Investor concern that it paid too much for Quindell Plc’s personal services division also has weighed on the shares. Slater & Gordon announced the 637 million pound acquisition in April, saying it would create “the number- one personal injury law group in the U.K." In June, the U.K. regulator said it was probing Quindell’s accounting policies.
In depth: Just being online isn't enough anymore
Brokers, if you're not on the social media bandwagon - now's the time to jump on and make it easier for clients to refer you.
Brokers, if you're not on the social media bandwagon - now's the time to jump on and make it easier for clients to refer you.
