A non-major lender has removed its low-doc loan offering for new and existing customers to “align with industry changes” designed to work in the “best interests of customers”.
Adelaide Bank has announced that following a review of its offering, it will be removing its low-doc (low-documentation) credit policy for new and existing customers, and by extension, withdraw its SmartDoc product range, effective 25 February 2019.
“This considered decision aligns with industry changes, specifically in terms of working in the best interests of customers,” the lender noted.
“The Adelaide Bank product suite remains robust and in line with our ongoing commitment to meeting the changing needs of our partners, customers and industry.”
As part of the changes, SmartDoc applications will no longer be accepted for assessment as of close of business Friday, 22 February 2019.
Existing SmartDoc customers will also be required to provide standard income verifications in line with current full-doc policy for any further lending.
Western Australia-based lenders Bluebay Home Loans and Resolve Home loans, which are funded by Adelaide Bank, have also withdrawn their low-doc loan offerings, also effective 25 February 2019, with new applications no longer accepted as of 22 February.
The Adelaide Bank-funded lenders informed brokers that post-settlement policies (credit increases, product conversions, partial discharges and substitutions of security) will be updated to accommodate existing customers with low-doc credit accounts, with no additional funds or increases to existing limits permissible.
Bluebay and Resolve’s existing low-doc customers will be able to change to a fixed rate up to and including 30 June 2019.
However, in tandem with Adelaide Bank, the lenders reported that existing low-doc customers who would like additional funds or increases to existing limits will be required to provide standard income verifications in line with current full-doc policy.
Applications submitted for Bluebay and Resolve’s low-doc products will no longer be accepted for formal approval as of close of business Friday, 22 February 2019.
Adelaide Bank is the latest lender to announce its withdrawal from the low-doc space, with several lenders, including the Commonwealth Bank of Australia (CBA) and Bank of Queensland (BOQ), also ceasing their low-doc offering.
In response to such changes, non-banks, including Resimac, have sought to fill the void in the low-doc lending environment.
[Related: Non-bank aims to fill void in low doc space]
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