A non-bank lender has announced changes to its credit policy, effective immediately for all new home loan applications.
Following NAB’s move to update its lending guidelines, newly branded non-bank Resimac has introduced credit policy changes for its Ultra Plus home loan product to ensure it “continues to lend responsibly”.
The changes, which came into effect on Monday (10 December), include the adoption of the Australian Securities and Investments Commission’s (ASIC) credit card guidelines, which will require brokers to assume a credit card holder is repaying debt within a three-year period, regardless of contractual terms, with Resimac changing its “affordability rate for credit cards” from 3 per cent to 3.8 per cent.
Further, as well as updating its “band values” associated with its use of the Household Expenditure Measure (HEM), Resimac has amended its Living Expenses Worksheet (LEW) to require brokers to provide commentary regarding details of conversations with clients.
“Ensuring we capture the right level of commentary around expense values is critical to our responsible lending obligations,” Resimac said.
As also outlined by NAB, Resimac stated:
- An expense category with a “$0” value will require a mandatory comment to provide an explanation as to why an expense is zero.
- All commentary must include a reason related to expenses.
- Where the LEW is incomplete or does not provide sufficient commentary, the credit assessment team will contact brokers and request a completed LEW. If a broker is asked to provide further commentary, he or she will need to access the original serviceability calculator, provide the requested information, and regenerate and send an updated PDF.
Resimac added: “We are introducing this process to ensure that we continue to do the right thing by our customers and that we have the ability to make an assessment as to whether the credit contract is ‘not unsuitable’ for their needs, including capacity to service the requested loan.”
[Related: Major bank changes credit policy]