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Westpac amends loan approval process

by Reporter4 minute read
Westpac

The major bank has introduced a number of changes to its home loan settlement process, which includes the introduction of non-inspection valuations.

Westpac Group – which includes Bank of Melbourne, BankSA and St.George Bank – has informed brokers that it has updated its home loan approval process in light of social distancing measures imposed by government authorities to curb the spread of COVID-19.

The group’s amendments include:

  • Non-inspection valuations – Allow valuers to conduct non-inspection valuations in instances where a physical inspection cannot take place due to COVID-19-related concerns.
  • Settlements with panel solicitors – Westpac will engage with a panel of solicitors to help distribute loan documentation to customers and improve turnaround times.
  • Virtual signing of loan documents – Where a face-to-face meeting with a customer is not possible, the signing of loan documents may be completed virtually in NSW and Victoria only.
  • Virtual appointments with guarantors – Enabling brokers to complete a virtual interview with individual guarantors who are unable to attend an in-person appointment.

Westpac stressed that such changes would only be in place for an interim period.

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“We understand the environment you are in to help your customers is continually changing as more Australians stay home in response to the spread of COVID-19,” Westpac told brokers.

Westpac is the latest bank to announce changes to its home loan approval process in response to the COVID-19 crisis.

Over the past month, a number of lenders have introduced new verification of identity (VOI) arrangements and have encouraged brokers to transition to digital lodgement services.  

Earlier this week, NAB announced that brokers would be required to use the IDyou app to sight, collect and verify identity documents remotely for all applications submitted from 23 April.

However, at the same time, several lenders, including NAB, BankwestINGGateway BankMyState Bank, Heritage Bank, ME Bank and a number of non-banks have tightened serviceability standards for new lending to maintain credit quality 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]

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