Brokers will no longer be able to submit their own personal mortgage applications following Westpac Group’s policy changes, which also include a requirement for supporting “evidence” when residential investor loans turn owner-occupier.
Under changes to the group’s residential lending policy, as of Saturday (28 April), Westpac will no longer accept loan applications where the broker is the applicant or one of the applicants.
Subsidiaries BankSA, Bank of Melbourne and St. George will likewise follow suit on Monday, 30 April.
The banking group has highlighted that brokers will still be able to submit loans for their family (as long as they are not an applicant) and they will also still be able to have another broker within their group submit a loan on their behalf.
Several other major banks have introduced changes relating to self-submissions, with ANZ announcing earlier this year that it would no longer pay commissions to brokers that submit asset finance (including commercial) applications for themselves (or for loans in which they are party).
From next Monday (30 April), all the banks in the Westpac Group will also require new supporting evidence for some loan purpose or category switches.
From Monday, brokers submitting applications that will involve the borrower switching from Residential Investment (IPL) to Owner-Occupier (OO) will require a copy of one of the following documents:
The name on the document must match at least one of the borrower’s/account holder’s names, and the mailing address on the document must match the property address securing the home loan.
Those switching from OO to IPL and requesting an Interest-Only (IO) repayment extension will still need to follow the usual serviceability process.
In a statement, the bank said: “These changes will help us protect the interests of our customers and ensure we continue to meet our regulatory requirements and strengthen our controls in assessing a customer’s loan category existing and proposed debts.”
However, the requirement for more evidence relating to investors becoming owner-occupiers follows the announcement that the Australian Prudential Regulation Authority will remove its 10 per cent benchmark on investor loan growth, which it has said was always a temporary measure.
For the 10 per cent benchmark to no longer apply, Australian banks will be expected to confirm that:
For those banks that do not meet the required commitments, the benchmark will continue to apply.
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