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Brokers urged to ramp up borrower probes

by Charbel Kadib4 minute read

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A non-bank lender has called on its broker partners to “ask additional questions” to their clients amid the economic uncertainty surrounding the COVID-19 crisis.

Non-bank lender Resimac has issued a notice to brokers, urging them to exercise greater vigilance in the loan application process and ensure they capture the full extent of the COVID-19 crisis’ impact on their clients.

Resimac’s general manager, distribution, Daniel Carde, said that while the lender’s product range, credit policy or responsible lending obligations remain unchanged, the fallout from the COVID-19 pandemic may be limiting a greater number of borrowers’ ability to service a loan.

“The current environment has made it necessary for both brokers and lenders alike to ask additional questions about the impact this global event may have on an individual’s circumstances,” he said.

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“A broad cross-section of the community may be experiencing some type of change in circumstance as a result of COVID-19 precautions, which we won’t necessarily know about unless brokers ask the right questions.”

Resimac has suggested that brokers ask the following questions to borrowers:

  • Has your business or place of employment been impacted by COVID-19? If yes, to what extent?
  • Has your role within your business or place of employment been impacted by COVID-19? If yes, to what extent?
  • If your business or place of employment has not yet been impacted by COVID-19, is this likely to occur over the coming months? If yes, to what extent?
  • Have there been, or are there likely to be, any other impacts of COVID-19 on you or your family? If yes, to what extent?

This follows an announcement from NAB earlier this week, which now requires brokers to complete a COVID-19-specific template as part of a home loan application.

The template would include considerations of a client’s job/income security and any COVID-19 relief assistance they have received or requested, including loan repayment freezes or the JobKeeper wage subsidy

Several lenders have also updated their credit policy, including BankwestINGGateway BankMyState Bank, Heritage Bank, ME Bank amid forecasts of a spike in defaults.

Other stakeholders in the lending industry have also adjusted their risk appetites, with mortgage insurer QBE Australia imposing an “embargo” on the provision of lender’s mortgage insurance to borrowers employed in industries hardest hit by the outbreak. 

Deposit bond provider Deposit Power has also revised its underwriting policy for short-term deposit guarantees, doubling the equity requirement for home equity products from one to two times the deposit amount.

[Related: NAB clamps down on serviceability]

Brokers urged to ramp up borrower probes
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Charbel Kadib

Charbel Kadib

AUTHOR

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

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