FNS40815 Fnsfmb 401 Assessment 3 Answers Ans PDF

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The adviser should use dollar amount rather than percentage and generic phrases to clients for them to clearly understand the likelihood of reaching a target return or outcome and also the risk of possible loss to market volatility. Discussing using actual dollars will be an indicator to the adviser...

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FNS40815 Certificate IV in FINANCE & MORTGAGE BROKING FNSFMB401 Prepare loan application on behalf of finance or mortgage broking clients Assessment 3

FNS40815_FNSFMB401 Assessment 3 V1.0

REAA

Released January 2019 Page 1 of 9

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Activity 1 Describe the responsible lending obligations of a mortgage broker.

Activity 1 Answer The responsible lending obligations of a mortgage broker require them to make reasonable inquiries of the customer in regards to their overall financial situation, as well as their objective and requirements of a credit product and after having gone through their situation, objective and requirements, make an assessment on the suitability of the credit contract towards the customer. Only in the event that the credit contract is not unsuitable, can the application be proceeded with. Finally, if the customer requests a credit assessment summary, it must be provided to the customer.

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Released January 2019 Page 2 of 9

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Activity 2 Identify the regulatory framework under which finance and mortgage brokers operate.

Activity 2 Answer Finance and Mortgage Brokers operate under a regulatory framework which at its basis is the National Consumer Credit Protection Act 2009, which is designed to protect credit consumers as well as making sure the professional practices and standards in the industry are ethical. This means that all lenders and mortgage brokers are required to hold and maintain a credit license or be registered as an authorized representative of a license holder. ASIC then enforces these rules for lenders and brokers, conducting regular audits and quality checks to ensure that the rules are followed. Additionally, the MFAA Code of Practice binds its members to the regulatory "commandments" if you will, that is elaborated on in the document. This promotes fair and ethical professional standards and practices.

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REAA

Released January 2019 Page 3 of 9

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Activity 3 Identify and describe the four elements which are required to determine the legal validity of handwritten signatures.

Activity 3 Answer 1. Integrity - The signature must be signed with the actual intent to be signing the contract with awareness and agreement. 2. Non-repudiation - a simple assurance by way of the law to make sure that this signature can not be denied or disputed. 3. Authenticity - Proper identification of the parties involved in the transaction. 4. Confidentiality - Keeping all documentation and communications confidential and private.

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Released January 2019 Page 4 of 9

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Activity 4 Why are the debt commitments of a home loan applicant important information for brokers and lenders?

Activity 4 Answer Debt commitments of a Home Loan application is important information as it impacts the customer's Capacity and if not disclosed or explored in detail, it could end up with the customer being given false hope or misinformation and ultimately end in a very poor experience. Sometimes debt commitments can also be quite telling of an individual's Character as well.

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REAA

Released January 2019 Page 5 of 9

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Activity 5 Identify situations where a lender my not need to comply with the Privacy Act as it applies to personal information.

Activity 5 Answer 1. Where disclosure is compelled by law. 2. Where there is a duty to the public to disclose. 3. Where the lender's interests require disclosure. 4. Where disclosure is made with the client's express or implied consent.

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Released January 2019 Page 6 of 9

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Activity 6 Identify and describe the obligations and responsibilities of home loan applicants.

Activity 6 Answer 1. To provide true and complete information about their entire financial situation, including information such as income, employment status and credit score. 2. Making the repayments on time and consistently so as to not default on their contract. 3. Clients need to understand how to meet lending criteria - broker will assist in this regard.

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Released January 2019 Page 7 of 9

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Activity 7 In what circumstances might someone, other than the applicant, complete home loan application forms on behalf of an applicant?

Activity 7 Answer When the client seeking to obtain assistance from a Broker or Lending Officer to help on behalf of the client. This includes all correspondence, liason, communication would be manager by the Mortgage Broker.

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Released January 2019 Page 8 of 9

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Activity 8 Describe some services that a mortgage broker could provide to clients after a home loan has been approved and settled.

Activity 8 Answer 1. Mortgage broker can continue to provide up-to-date financial information such as interest rate changes. 2. Offer them rate reviews annually to ensure that they are in the best position. 3. Be a point of contact for any potential questions or concerns as well as educating the customers how best to manage their loan accounts. 4. Swap them to fixed or half fixed half variable options.

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REAA

Released January 2019 Page 9 of 9...