Submitting an Application hand book - Mortgage House · 2011-02-21 · Guide to obtain the...

Submitting an Applicationhand book

the Mortgage House way

21 February 2011mortgagehouse.com.au1

After completing the e-Interview…


Generate the Borrowing Capacity Guide

Be intimate with entire content (Refer to Borrowing Capacity hand book)


Follow the script and generate the Documentation Checklist or Pre Approval Letter

Refer to the Pre Approval Letter hand book or the Documentation Checklist hand book for a detailed process specification

Select the “Continue” button

To formally lodge an application, you will need to complete:


• Systematic NCCP Act compliance• Record of Interview with the

Customer (wants and needs, etc.)• Safe guard against future claims of

“unsuitable” loan placement• Formalised initial meeting “road

map”

Retail Customer Record Form

• Accurate and complete loan submission

• Proactively steer the loan submission to a quick approval

• One submission basis to reduce RFI’s

• Quick settlement

Actionable Credit Submission Form

Retail Customer Record (RCR) Form


Location: Document Manager,

Document Library,

“Interview and Scenario

Stage”

Accuracy is the key


Don’t assume, ask the Customer about their

current wants/needs, and their future intentions (e.g. looking for a new job, etc.) This becomes a legal document

upon completion

Significant changes in the future


Investigate the Customer’s personal circumstances and document them in

this section

It is the loan writer’s responsibility to make it their business to understand the true position of the Customer

Complete this section by asking the questions from the form and documenting the responses

Refinances


See Borrowing Capacity Guide to obtain the

“Proposed” details for the new loan

The intention is to reduce the Customer’s interest

expense

If Customer is refinancing to a higher interest rate

loan, understand and document why this is the case (product features,

etc.)

Ensure that any excessive exit fees (e.g. break costs)

are documented and accommodated for when

calculating surplus available at settlement

Obtain factual data from existing loan contract, or a

payout figure

Borrower’s Requirements & Objectives


In the lead process, you would have

been prompted to enter a comment

detailing the Borrower’s

Requirements & Objectives

Copy/ Paste the time and date stamp

from the above comment into the

space provided

Enter the lead number where this comment is saved

In conclusion…


• Complete the acknowledgement

• Electronically sign

• Image the completed RCR, whilst sending the comment to “Sales Updates”

Actionable Credit Submission (ACS) Form


Location: Document Manager,

Document Library,

Refer to relevant

product section

Quick turnaround times are a balance of high quality submissions and efficient processing:


Incomplete submission

Quick settlement

Submission quality dictates turnaround times…


ACS completed in full

All supporting documents

imaged in full colour under correct Doc

Type

Efficient processing through

Operational Departments

How to


Follow the “how to use this document” box at the beginning

of the ACS for guidance

Section 1 – Customer Meeting Record


Click here to go back to the Retail Customer Record section for more information

Section 2 – e-Interview


Refer to e-interview hand book for a detailed process specification

House keeping


Submission notes

explaining the application are

mandatory

Copy and paste the actual

comment time/ date stamp

into the section

provided

Instant credit based business rule(s) feedback!


The methodology of the Borrowing Capacity Guide is used

in formal approval assessment

There are hundreds of credit policy rules built in to the system

(e.g. if policy excludes casual income where employment is less than 12 months, this income will

not transpose into servicing assessment)

Cloud credit - Cyberspace


If the loan amount does not service here, it will not service when lodged

Read the “Review Required” section and ensure that all items have been

actioned (failure to do so will result in an in accurate servicing result)

If used accurately, you can conduct a pre-lodgement credit assessment

instantly

Always


Refer to the Borrowing Capacity Guide hand book for a detailed process specification

Prerequisites


Generate the “Best Interest Rate Mortgage

Calculator”

This will provide a test to ensure that the

product offered is the cheapest (comparison) rate we can offer for

the client’s loan amount and LVR sought

Image the result

Prerequisites


Generate the “Home Loan Comparison Calculator”

This will provide a comparison of the cheapest (comparison) rate we can offer, to either:• another Mortgage House product• the client’s existing home loan

product

Image the result

Section 3 – Application Form


Generate the application form from Document Manager

Having completed the e-interview

accurately, all names, addresses, etc. would

have been copied from core

documents such as a passport

Complete the Funds Position

Customer(s) to sign the completed

application form

Unacceptable:


Manual amendments to the Application Form

Replacing pages within the Application Form with ones printed at a later point in time

The use of “liquid paper” or “white out”

Applications signed more than 1 month from submission

Section 4 – Credit History


Ask the Customer(s) whether they have any adverse credit (e.g. defaults) or

current directorships, or if they have applied for finance recently

If adverse credit criteria exists, image:


Written and signed

explanation of the

circumstances around the

listing,

Evidence that it has been paid/ settled, if the

credit report is not updated to

reflect same

Compelling reason bringing comfort to the Lender as to assure of it’s

non-reoccurrence

If current directorships exist, obtain and image either:


Last 2 years Tax Returns for each current directorship, including corresponding years Profit &

Loss and Balance Sheet statements

A signed letter from a Registered Tax Agent confirming that the each company is trading at a

profit, or no longer trading with no outstanding liabilities

If recent applications for credit made:


Document the reason for the application

finance and the outcome of the

enquiry in submission comments

Section 5 – Identification


Obtain a completed Details Verification

form from Document Manager

Having completed the e-Interview

accurately, all names structures would have been copied

from core documents such as a

passport

Complete an Applicant Details

Verification form for each individual attached to the

application

Complete a Company Details

Verification form for each company attached to the

application

Important


You are required to physically sight original identification documents in order to complete the Details Verification Forms

See end of the form

House keeping


Full colour images of

Identification required

validating the full name structure

(no copies or faxes)

Identification should not be expired-

follow the Applicant Details Verification form for guidance

on acceptable age of documents

Ensure copies of identification are not

cut off

All letters and digits should be visible, and you need to be able

to see the photo

Things you should know


Access a pre-filled Applicant Details Verification Form from Document Manager to proceed

If the Customer name varies from document to document,

attempt to identify the client via another option in the one full

name, e.g.

Passport = John Smith Driver’s licence = John James Smith

In this case, option A has been attempted but failed

Seek to identify the client by using any number of

combinations in option B (preferably the full name,

however either name would be acceptable)

Inconsistencies:


If you have followed the previous step, you would have arrived at a

name structure for the Customer

Where the name structure does not match title:

Property Purchase: the Contract of Sale will need to be amended

Existing Property: ensure that the individual who has been identified is the same person

registered on title, and include a note in the submission comment that title will need to be updated

Section 6 – PAYG Full Doc applicants


Pay careful attention to

payslips and letters of employment to ensure that they

are dated within 1 month

Ensure Applicant name, Employer name and ABN

evident

Ensure the YTD figure is visible

Check the payslips for any deductions-if they exist, ensure they are contained in the application form as a liability

Check the YTD figure- does it make sense compared to

duration of employment?

House keeping


Where income documents are hand written and/ or inconsistencies exist, seek and image:

Last 3 months account statements showing employer salary credits

Latest financial year’s Tax Assessment Notice

Obtain last 2 year’s PAYG Payment Summaries where additional components of income are required for servicing (e.g. overtime, commission, bonuses) where LMI is required

Helpful hint


• If TFN’s are visible, you will be asked to have them removed via a Help Request, and then re-image the document/s

Always remove Tax

File Numbers (TFN’s) before

imaging any documents

Section 7 – Self Employed Full Doc applicants


The earlier year’s financials should be no more than 18

months old

E.g. if 2008 and 2009 Tax Returns are provided, they

will expire on 1 January 2010, where 2009 and 2010

Tax Returns will be required

Verify that any corresponding business Tax Returns cover the same 2

financial year’s as the Individual Tax Returns

provided

The latest financial year’s tax assessment notice

needs to of the latest Tax Return financial year

Section 8 – Self Employed Lo Doc applicants


Ensure that the accountant’s declaration is

completed on the 2nd

page of the Lo Doc Declaration

Include the historical search of the ABN to confirm it has been

actively registered for the last 2 years

Where this is not the case, an accountant’s letter will be required to confirm why this is

the case

If LVR exceeds 60%, check to ensure the

loan purpose is accommodate via the product specifications

(including LMI criteria)

Check the GST registration against

the ACS requirements

Section 9 – Other Income


This may include:

Current Centrelinkstatement

Current real estate agent’s statement or

lease agreement

Last 2 year’s Individual Tax Returns for

share income/ dividends/

investments

Current Superannuation

statement

Section 10 – Property Purchases


• These may alter the assessable security value

Request the front page of the Contract of Sale, along with any/all conditions and annexure(s)

Funds to complete:


See bottom of the first page of application

form, may include:

Genuine savings – House keeping


Copy of latest 6 months statements where genuine savings are required to be

evidenced, generally > 80% LVR, for Advantage loans

Must represent 5% of the

purchase price in the latest statements

Check debits and credits and

ensure that there are no

inconsistencies with the debts and incomes

declared in the application

form

If they exist, update the

application and regenerate for

signing

Ensure that all pages of the

statement are provided/ imaged in

order

Imaged in chronological order (oldest to newest) so

it flows

Clarify source of large any lump sum deposits



Copy of latest 3 months statements where genuine savings are required to be evidenced, generally > 80% LVR, for non

Advantage loans

Must represent 5% of the

purchase price in the latest statements

Check debits and credits and

ensure that there are no

inconsistencies with the debts and incomes

declared in the application

form



signing

Ensure that all pages of the

statement are provided/ imaged in

order

Imaged in chronological order (oldest to newest) so

it flows

Clarify source of large any lump sum deposits



Copy of property sale contract and written confirmation from solicitor advising the net sale proceeds available to the Applicant(s)

Copy of deposit paid receipt, and corresponding account statement showing where deposit came from

Copy of an original statement (showing account number/s and Applicant/s names imaged) where internet statements are provided

Copy of latest original savings/ term deposit account statement

More


Gift Policy Statutory Declaration (Form 2507E) where a gift is being received

Completed and signed FHOG application form, and required supporting documents

Other loan refinance/ Increase formal approval

Caution


If no agent is acting on the purchase,

ascertain why this is the case and include in your

submission notes

Section 11 – Refinances/ Existing Property as Security


Ensure that all pages of the statement are provided (e.g. page 1 of 3, page 2 of 3, page 3 of 3)

Validate that Customer name and account numbers are evident

Ensure statements end no more than 1 month from submission

House keeping


Image in chronological order (oldest to newest) so

it flows

Check debits and credits and ensure

that there are no

inconsistencies with the debts

and income declared in the

application form



signing

Be prepared


Request a written and signed

explanation has been provided for

any adverse entries

e.g. reversals, late fees, dishonours,

over limit instances, etc

Also ensure that evidence that the account has been brought back into order is imaged

Internet statements


Image of original statement(s)

showing account number(s) and

applicant(s) names

Section 12 – Cash out/Equity Release funds are released direct to Applicant


Only include a breakdown of funds which will be released direct

to Customer at settlement

E.g. Consolidation of a credit card is not cash out/equity release

Ensure that all surplus funds have been accounted for in this section

to avoid delays


Load the security value into the system

as the cost to construct plus land

value (purchase price or estimate if land is

already owned)

Cost to construct should include all

variations

Pre approvals can be considered where the land and/or

construction cost has not yet been finalised

or documented

Liaise with the Customer to ensure

that they have sufficient funds to inject into the loan before first draw

down

Section 13 – Construction loans

Avoid a shortfall:


Usually the full construction cost less deposit paid to builder will be retained by the

lender, e.g.

Land purchase price $150,000 +

Construction cost $200,000 = Security value of $350,000

LVR of 90% = Loan of $315,000

Funds available at land settlement calculated

as $315,000 -Construction cost

$200,000 = $115,000

Note that this is not 90% of the Land purchase price

Section 14 – Reduced Equity Fee (REF) Policy via 1st Rate Mortgage


Reduced Equity Fee policy is available via the 1st Rate Mortgage range

It is basically a replacement of LMI from 80%-90%

Complete the REF Checklist as directed for eligibility criteria

Section 15 – External Lender specific


Completed where the loan is being lodged to an external Lender

Complete a Finance Broking Contract for all loans (not required for Mortgage House loan products)

Interviewer Declaration


Complete this section accurately

If you have not met with Customer(s) at this stage, or have not sighted original

supporting documentation, tick the appropriate box

to signal

This should be avoided in all cases,

as you will be required to

undertake these steps prior to

settlement

NCCP Act requires for this to be undertaken

In conclusion…


• Complete the acknowledgement

• Electronically sign

• Image the completed ACS

It’s now time to, electronically submit the application:


You are now ready to formally lodge your application:


Simply enter a comment to Sales Support advising that a new submission is ready for assessment

You have now formally lodged your submission for assessment


INTELLECTUAL PROPERTY STATEMENT AND DISCLAIMER

The information presented is current at the time of printing and may at the sole discretion of Mortgage House, change without notice. All logos, graphics, text and information is owned by,

or licensed to; Mortgage House Pty Ltd

ACN 129 091 372 and is subject to copyright.

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Submitting an Application hand book - Mortgage House · 2011-02-21 · Guide to obtain the...

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