Certificate IV in Finance and Mortgage Broking Assignment

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Section 4: Case studies

Case study 1: Philip and Jennifer Brown

The case study is located in the subject room in KapLearn.

Often client meetings occur in the form of a face-to-face meeting, typically at the broker’s office or in the client’s home or workplace. As technology has developed, it has made different forms of client contact possible using software such as Zoom. Conducting online meetings has become more acceptable and can also be quite convenient for some clients.

Task 16 ― Case study: Purchasing an owner-occupied home

It is time to prepare to meet with your first client, Philip and Jennifer Brown. As the broker, you need to consider a range of obligations when dealing with a customer. This section will consider some of these obligations.

Task 16: Question 1

You have just made an appointment over the phone to meet with Jennifer and Philip.

Prepare an email outlining the purpose of your first meeting. In the email, make sure you also cover the following points.

(a) What documents would you attach to the email?

(b) Include the following information in your email:

(i) the services, values and capacity your organisation has to offer

(ii) your background, credentials and your role as their broker

(iii) the commercial relationship that your firm has with the product providers (i.e. the lenders on your panel).

Task 17 ― Completing the fact find

Task 17: Question 1

From the information in Case Study 1 for Jennifer and Philip Brown, complete the following tasks.

(a) Using the client information collection tool/fact finder below, complete:

(i) assets and liabilities

(ii) needs analysis

(iii) credit representative notes

(iv) anticipated fees and charges

(v) funds to complete.

Student response to Task 17: Question 1

Client information collection tool/Fact finder

For the client information collections tool/fact finder tasks, you will need to calculate government fees and charges as well as LMI where applicable.

For this assignment, Genworth is your lender’s LMI provider. Please use the Genworth LMI calculator for all LMI calculations. There are links provided in the Toolbox to help you calculate the applicable fees and charges.

Assets and liabilities

Assets		Liabilities
Details	Market value	Details	Monthly payments	Amount owing
Owner occupied property at:		Mortgage with:
Investment Property at:		Mortgage with:
Cash at bank (includes fixed deposits)		Car leasing
Other cash (includes offset accounts)		Personal loans 1. 2.
Deposit paid on property (only if paid)		Overdraft
Motor vehicles: 1. 2.		Other loans: 1. 2.
Personal effects		Credit card limit:
Business value (if self-employed)		Credit card limit:
Shares and investments		Other:
Superannuation		Other:
Other assets (give details)		Other:
Total assets		Total liabilities

CURRENT MONTHLY LIVING EXPENSES (Provide a breakdown of the total amount listed in the case study — use your discretion)
Food/housekeeping
Insurance (e.g. motor vehicles, home contents/ building, medical, life/income protection)
Utilities (e.g. rates, gas, electricity, transport)
Transport (e.g. public transport, petrol, registration, repairs)
Education (e.g. school, college, university)
Dependants support (e.g. childcare, child maintenance)
Entertainment (include online subscriptions, e.g. Netflix/Stan)
Other (detail below):
MONTHLY LIVING EXPENSES

Needs analysis

1	Name of your current lender?
2	What type of loans do you have?
3	Why did you choose this particular loan and lender?
4	What is the interest rate on your current loan?
5	What are your payments?	Amount
6		Frequency
7	Do you know the fees and charges?
8	What is your proposed purpose for the new loan you are applying for?
9	Branch access available with current lender
10	Internet banking available with current lender
11	Phone banking available with current lender
12	Lenders not to be considered
13	Type of loan sought
14	Preferred Interest rate range
15	Payment frequency
16	Redraw
17	Offset
18	Salary crediting
19	Low fees and charges

Anticipated fees and charges

Anticipated purchase price
Deposit on property
Total Loan amount
LVR %
Purchase costs
Stamp duty – Transfer of Land
Registration fee – Transfer of Land
Solicitor/conveyancer fee
Rates and land taxes (estimate)
Pest inspection (estimate)
Building inspection (estimate)
Borrowing costs
Application/establishment fee
Valuation fee
Security admin fee
LMI
Registration of mortgage
Discharge/Release of mortgage fee
Search fees
Other
Total purchase and borrowing costs

Funds to complete

PURCHASE AND LOAN COSTS:		AVAILABLE FUNDS:
Purchase price:		Deposit if already paid to agent:
Lender application/valuation fees:		Cash savings:
Stamp duty payable ― Transfer of Land		Sale proceeds:
Registration fee – Transfer of Land
Registration of mortgage ― Land Titles Office		Gift:
Solicitors fees:		FHOG:
Other		Other:
Lenders mortgage insurance ― added to loan		Other:
TOTAL COSTS (A):		TOTAL OWN FUNDS (D):
LOAN AMOUNT REQUESTED (B):		OWN FUNDS REQUIRED (A–B) = C:
OWN FUNDS REQUIRED (A–B) = C		SURPLUS/SHORTFALL (D–C)

Task 18 — Assessing the clients’ situation

Based on the information gathered in the initial client meeting with Philip and Jennifer Brown (see Case Study 1) and any other online tools used, you now need to assess the clients’ loan application, paying particular attention that you have met regulations, legislative requirements, followed industry codes of practice, and met lender credit policy.

Provide data to support your comments and conclusions.

Task 18: Question 1

Assume you have conducted your initial face-to-face meeting and have provided and sought the necessary information from your clients. Explain a minimum of three (3) regulatory and legislative requirements that you have met so far in dealing with this application. Include the documents you would have provided to the client in the initial meeting.

Task 18: Question 2

As part of assessing the clients’ situation, a broker is required to determine the approximate cost of LMI.

(a) Will Jennifer and Philip be required to pay LMI and why or why not?

(b) If so, what would the premium be?

Task 18: Question 3

In the previous question you used the Genworth LMI calculator to work out the LMI premium for Philip and Jennifer Brown. There are other helpful tools located on the Genworth site that can assist you with the preparation of a loan application.

On the Genworth website, under ‘Tools’, select the appropriate calculators to complete the following:

(a) What is Philip and Jennifer’s maximum loan amount according to Genworth serviceability calculation?

(b) What is their combined total gross and net incomes?

(c) What is the proposed monthly loan repayment, based on the actual interest rate? (Tip: capitalise the LMI cost onto the loan amount.)

Task 18: Question 4

Based on what they have disclosed to you, does the client have the capacity to meet the deposit and total cash contribution required for the property purchase? Explain why or why not.

Task 18: Question 5

What is the security offered for this loan? Is it an appropriate type of security?
If so, explain why or why not.

Task 18: Question 6

Prior to submitting the application, you are required to obtain a valuation on the property.

For the purposes of the assignment, the broker is to arrange the valuation of the security prior to submitting the loan application.

(a) Complete the template below and prepare a letter to instruct the valuer to conduct a valuation for Philip and Jennifer Brown.

(b) One completed and submitted, how and where would you file this for future reference?
(Consider correct document policies and procedures including legislation and security.)

Student response to Task 18: Question 6

Property Valuation Request

Broker details	Name	Contact details

Client name	Loan type	Loan amount

Loan purpose

Purchase 0 Refinance 0 Consolidation 0 Equity release 0

Property type

Residential 0 Commercial 0 Vacant land 0 Land and construction 0

Property address:

Title details

Volume:

Folio:

Folio identifier:

Description

Year of construction
Number of bedrooms
Number of bathrooms
Car accommodation
Other rooms
Other features

Property value

Purchase price $ Date of contract — / — / —-

Land purchase price $

Building contract $

Refinance ― estimated value range

From $

To $

Property use

Owner occupied 0

Investment 0

Holiday rental 0

Rental income

Rent per month $ .00 Actual/Proposed

Valuation type:

Full valuation: 0

Kerbside: 0

Desktop: 0

Task 18: Question 7

After considering the client’s financial position, what loan amount would you recommend, and why?

Task 18: Question 8

What is the likelihood that the clients will be able to meet all of their financial obligations once the loan is in place?

Task 18: Question 9

Under Responsible lending requirements, brokers also need to consider foreseeable changes in a client’s financial position. What issues may impact the clients’ ability to meet their financial obligations, including any possible risks, now or in the future?

Task 18: Question 10

Most lenders stress test home loan repayments by adding a 3.0% buffer to the interest rate to make sure the borrower can afford the repayments over the medium term. If interest rates increased by 3.0%, what would Philip and Jennifer’s loan repayments be, and do you think they would be able to cope with the extra repayment amount?

Task 18: Question 11

(a) Identify appropriate product options you can present to the clients that may remove this interest rate risk?

(b) What advantage would this type of product provide for the customer?

Task 19 — Presenting borrowing options and potential benefits

Task 19: Question 1

Although Philip and Jennifer (Case Study 1) are looking to borrow at approximately 90% LVR, what other options may be available to them that would avoid the cost of LMI? Provide at least three (3) options.

Task 19: Question 2

Describe the First Home Owner’s Grant or home buyer assistance scheme benefits and stamp duty concessions that are available in the state where Philip and Jennifer are purchasing their home. Are Philip and Jennifer eligible for any assistance? Explain why or why not?

Task 19: Question 3

Philip and Jennifer have called to discuss an issue in relation to the product option you have proposed. They are wondering whether it would be better to fix the interest rate on their loan after having received several conflicting viewpoints from family and friends.

(a) Explain the process you would use to research and identify the various product options available to address the issue raised and still meet the needs of Philip and Jennifer.

(b) Explain to Philip and Jennifer two (2) advantages and two (2) disadvantages of fixing a loan over different fixed rate terms.

Task 19: Question 4

What other option/s can you suggest if Philip and Jennifer remain uncertain about whether to fix the rate on their loan?

Task 19: Question 5

You want to ensure that Philip and Jennifer have all the critical insurance protections in case something unfortunate happened to one of them.

(a) What process would you follow during your discussion with the clients to ensure you have a good assessment of their needs?

(b) Explain who you should refer Philip and Jennifer to obtain advice on these types of products.

Task 20 – Supporting the client to settlement

Although a broker does not participate in the settlement process, they still need to remain in touch with all of the stakeholders until the loan settles.

Task 20: Question 1

Why it is important for the broker to remain informed of developments in the lending process despite not being actively involved at every stage?

Task 20: Question 2

The application form and related documents have now been signed and forwarded to the lender for approval. Philip and Jennifer have agreed that you will keep their solicitor informed of progress if/when the loan is approved.

(a) To improve your service delivery standards and ensure you are communicating effectively with Philip and Jennifer for the remainder of your interactions with them, you thought this was an appropriate time to review your client service standards. Refer to the ‘Example of an organisation’s policies and procedures’ document in the Toolbox under the section ‘client service standards’. What evidence would you consider in your review of the service delivery standards?

(b) Considering organisational policy and procedure, how would you document the improvements and to whom in your organisation might you submit your review of the standards?

Case study 2: Mary Azacca

Case study 2 for Mary Azacca is located in your subject room in KapLearn.

Task 21 ― Case study 2: Refinancing a home loan

One of your clients, Adib Bursal, who has used your service for several years, has referred a work colleague who is considering their options to refinance their loan. The colleague’s name is Mary Azacca.

The initial meeting with Mary was conducted over Zoom. Following the meeting, Mary forwarded basic information and documents sufficient to prepare a preliminary assessment.

Task 21: Question 1

A preliminary assessment is a document prepared by the broker and given to the borrower upon request. However, before the assessment is prepared, the broker must have a comprehensive idea of what the client requires.

To collect the information necessary to prepare a preliminary assessment, refer to case study 2 for Mary Azacca and complete the following tasks.

(a) Using the client information collection tool/fact finder, complete:

– assets and liabilities

– needs analysis

– anticipated fees and charges

– funds to complete.

Assets and liabilities

Assets		Liabilities
Details	Market value	Details	Monthly payments	Amount owing
Owner occupied property at:		Mortgage with:
Investment property at:		Mortgage with:
Cash at bank (includes fixed deposits)		Car leasing
Other cash (includes offset accounts)		Personal loans 1. 2.
Deposit paid on property (only if paid)		Overdraft
Motor vehicles: 1. 2. 3.		Other loans: 1. 2.
Personal effects		Credit card limit:
Business value (if self-employed)		Credit card limit:
Shares and investments		Other:
Superannuation		Other:
Other assets (give details)		Other:
Total assets		Total liabilities

CURRENT MONTHLY LIVING EXPENSES (Provide a breakdown of the total amount listed in the case study — use your discretion)
Food/housekeeping
Insurance (e.g. motor vehicles, home contents/ building, medical, life/income protection)
Utilities (e.g. rates, gas, electricity, transport)
Transport (e.g. public transport, petrol, registration, repairs)
Education (e.g. school, college, university)
Dependants support (e.g. childcare, child maintenance)
Entertainment (include online subscriptions, e.g. Netflix/Stan)
Other (detail below):

MONTHLY LIVING EXPENSES

Needs analysis

1	Name of your current lender?		Answer here
2	What type of loans do you have?
3	Why did you choose this particular loan and lender?
4	What is the interest rate on your current loan?
5	What are your payments?	Amount
6		Frequency
7	Do you know the fees and charges?
8	What is your proposed purpose for the new loan you are applying for?
9	Branch access available with current lender
10	Internet banking available with current lender
11	Phone banking available with current lender
12	Lenders not to be considered
13	Type of loan sought
14	Preferred interest rate range
15	Payment frequency
16	Redraw
17	Offset
18	Salary crediting
19	Low fees and charges

Task 22 ― Preparing a preliminary assessment

Preparing a preliminary assessment is required under the NCCP Act. In this task, you are required to prepare a preliminary assessment for Case study 2: Mary Azacca.

Task 22: Question 1

Before preparing the preliminary assessment, under best interest duty, you need to assess if there is a benefit to the customer by switching loans.

To determine if there is a benefit for the client you need to go to the MoneySmart website. Using the mortgage switching calculator, you need to:

(a) provide the result using the calculator

(b) explain if the customer will benefit from switching lenders.

The MoneySmart link can be located in the Toolbox.

Task 22: Question 2

Will Mary be required to pay LMI? Explain why or why not.

Task 22: Question 3

Using the information gathered from your customer, Mary Azacca, you are required to prepare the preliminary assessment.

Part of the preparation will require you to use a home loan comparison website and use that information to prepare the preliminary assessment below.

Preliminary Assessment

Student response to Task 22: Question 3

	Applicant 1
Full name (Client 1)
REQUIREMENTS AND OBJECTIVES
Reasons for seeking credit or reviewing an existing contract, and the resulting benefit
Specific features requested, and any risks or costs

		MONTHLY FINANCIAL POSITION
		Current		Proposed
Total monthly after tax income: (A)
Total monthly repayments: (B)
Total monthly living expenses: (C)
TOTAL MONTHLY NET SURPLUS (A-B-C)
Foreseeable material financial changes, and resulting plan to meet the ongoing obligations
RECOMMENDED PRODUCT PARTICULARS
	PRODUCT 1		PRODUCT 2		PRODUCT 3
Lender’s name
Loan product:
Loan Amount:
Term in years
Monthly repayments

CONFLICT OF INTEREST DISCLOSURE: Has any conflict of interest which may disadvantage the client been identified in relation to the recommended product?
SUITABILITY:
I consider that based on the information provided by the client and further enquiries that the loan proposal is ‘not unsuitable’ for the client.Indicate yes or no and provide supporting comments.

Task 22: Question 4

Of the three loans recommended in the preliminary assessment, which loan product would you recommend to Mary, and why?

Task 22: Question 5

Does Mary qualify for any government concessions or stamp duty reductions?
Explain why or why not.

Task 22: Question 6

What other issues may impact, now or in the future, on the Mary’s ability to meet her obligations, including any possible risks?

Task 22: Question 7

You are required to present your analysis and recommendations to your client. On this occasion you will make your presentation in an email. You will gather some of the information from your preliminary assessment and you will also need to include the following information.

Provide a brief summary of your understanding of the clients’ needs (this could be an outline summary of their proposed loan structure).
Provide a brief summary of the clients’ current financial position (use information from the case study).
Give an explanation of the product options evaluated that meet their needs (you should have researched at least three (3) lenders as part of the preliminary assessment) and details of the loan features. Use the internet or, if working in the industry, internal software to do this.
Explain the option you recommend and the reasons for the recommendation — including the loan amount, term and repayments. Explain how the recommended product meets the clients’ needs (refer to the case study)
Invite questions from the client and respond in a follow-up email accordingly.
Seek agreement from the client to proceed with the product recommendation.

Task 22: Question 8

Mary has responded to your email asking some questions.

To: Broker 1

Broker1@CCF&MB.com.au

From: mary.azacca@gmail.com

Re: Recommendation

Dear broker,

Thank you for providing your recommendation for the home loan product for my refinance application.

I have some questions I am hoping you can answer for me:

1. I want to open a bank account to make sure there is somewhere for any disbursement of surplus funds from the refinance settlement and also for my periodical payments to be debited from. What options do I have to apply to open a bank account?

2. What ID will I need to provide to open a new bank account?

I look forward to receiving your reply.

Thank you.

Mary Azacca

Student response to Task 22: Question 8

FWD: To: Mary Azacca

mary.azacca@gmail.com

From: broker1@CCF&MB.com.au

re: Recommendation

Task 22: Question 9

In the course of your interactions with Mary, you have gathered or completed a number of documents, which include, for example, the completed fact find with credit representative notes, the preliminary assessment and assorted communication with her. How and where would you file this information?

Case study 3: Ravi & Alice Patel

Case study 3 for Ravi & Alice Patel is located in the subject room.

Task 23 ― Case study: Purchasing an investment property

Ravi and Alice Patel have approached you to arrange finance to purchase an investment property. The clients have already paid the 10% deposit, so you will need to act fast as they need to settle in 60 days.

Following the initial meeting, the clients have provided all of the essential documents to prepare a loan submission.

Task 23: Question 1

To commence the process, you need to enter the information collected into your aggregator’s CRM system. This will include:

(a) client information collection tool/fact finder

(b) assets and liabilities

(d) credit representative notes

(e) anticipated fees and charges

(f) funds to complete.

Assets and liabilities

Assets		Liabilities
Details	Market value	Details	Monthly payments	Amount owing
Owner occupied property at:		Mortgage with: Answer here
Investment property at:		Mortgage with:
Cash at bank (includes fixed deposits)		Car leasing
Other cash (includes offset accounts)		Personal loans 1. 2.
Deposit paid on property (only if paid)		Overdraft
Motor vehicles: 1. 2.		Other loans: 1. 2.
Personal effects household effects		Credit card limit: Answer here
Business value (if self-employed)		Credit card limit: Answer here
Shares and investments		Other:
Superannuation Applicant 1: Applicant 2:		Other:
Other assets (give details): Answer here		Other:
Total assets		Total liabilities

CURRENT MONTHLY LIVING EXPENSES (Provide a breakdown of the total amount listed in the case study — use your discretion)
Food/housekeeping
Insurance (e.g. motor vehicles, home contents/ building, medical, life/income protection)
Utilities (e.g. rates, gas, electricity, transport)
Transport (e.g. public transport, petrol, registration, repairs)
Education (e.g. school, college, university)
Dependants support (e.g. childcare, child maintenance)
Entertainment (include online subscriptions, e.g. Netflix/Stan)
Other (detail below):

MONTHLY LIVING EXPENSES

Funds to complete

PURCHASE AND LOAN COSTS:		AVAILABLE FUNDS:
Purchase price:		Deposit if already paid to agent:
Lender application/valuation fees:		Cash savings:
Stamp duty payable ― Transfer of Land		Sale proceeds:
Registration fee ― Transfer of Land
Registration of Mortgage ― Land Titles Office		Gift:
Solicitors fees:		FHOG:
Other		Other:
Lenders mortgage insurance Added to loan		Other:
TOTAL COSTS (A):		TOTAL OWN FUNDS (D):
LOAN AMOUNT REQUESTED (B):		OWN FUNDS REQUIRED (A–B) = C:
OWN FUNDS REQUIRED (A–B) = C		SURPLUS/SHORTFALL (D–C)

Task 24 ― Preparing a loan proposal

After completing your investigation into what loan options are available, you are ready to proceed and prepare a loan proposal for the clients Ravi and Alice.

During discussions with the clients, they have confirmed their willingness to cross-collateralise their
owner-occupied property as equity to purchase the investment property. So, you have agreed to send them an email and propose two options to finance the investment property.

Firstly, you are required to complete the credit proposal disclosure to attach to your email presentation.

Credit proposal disclosure

This document provides information on commissions and certain fees and charges the broker or other parties may receive in relation to the proposed loan or lease.

Task 24: Question 1

You now need to complete a credit proposal. For this task you will need to use an online loan comparison website and to complete the template below.

Lender information: The lender is paying an upfront commission of 0.65% of the loan amount and a monthly trail based on 0.15% of the loan balance.

Student response to Task 24: Question 1

Customer(s) full name(s)
Address
Phone and email
Proposed finance Interest rates and repayments may change if the lender changes its interest rate.	Lender:
Split 1	Purpose: Finance amount: Interest structure: Interest rate: Term: Repayments: Other features
Split 2	Purpose: Finance amount: Interest structure: Interest rate: Term: Repayments: Other features:

Total loan amount	$
Fees payable by you to us. These fees are payable by you.	$
Commission is payable for:
Commission payable by:
Commission payable to:
Reasonable estimate of commission:	X% of the amount of credit limit shortly after the finance is provided. We estimate this to be $ . X% per annum of your amount owing from time to time payable monthly. We estimate the largest monthly payment to be $ .

Estimate of total fees and charges payable to the financier in relation to applying for the finance.
These fees are payable by you.Note: These figures are estimates only and the final figures will be shown in your credit contract or lease.
Some (or all) of these fees may be paid from the finance proceeds.

We are not aware of any other fees or charges payable to anyone else in relation to the application for finance, but the financier may impose some additional requirements.

Application fee:

Establishment fee:

Lenders mortgage insurance:

Valuation fee:

Transfer duty fees

Refinancing fees:

Discharge fee:

Other known costs

Total

Task 24: Question 2

Now that you’ve completed the credit proposal disclosure, you will need to write your email to the client. You must cover the following points, namely:

a summary of your understanding of the clients’ needs (this could be an outline summary of their proposed loan structure)
a brief summary of their current financial position (use information from the case study)
your explanation of the minimum of two (2) product options evaluated that meet their needs and details of the loan features (use the internet or, if working in the industry, internal software)
the option you recommend and the reasons for the recommendation — including the loan amount, term and repayments; explain how the recommended product meets the clients’ needs (refer to the case study); and explain why you recommend this lender.
invite questions from the client and respond in a follow-up email accordingly
provide a section for the client to provide you with permission to proceed.

Task 24: Question 3

Ravi has responded to your email asking some questions.

To: Broker 1

Broker1@CCF&MB.com.au

From: ravi.patel@jayzar.com.au

Re: Recommendation

Dear broker,

Thank you for providing your recommendation for the home loan product for our refinance application. I have some questions I am hoping you can answer for us:

1. Can you please explain our rights for obtaining a written assessment.

2. Do you have to provide us with a comparison rate with your home loan product recommendations, and can you please explain the difference between the interest rate and the comparison rate?

3. We would like to negotiate the application fee or the interest rate for the product you’ve recommended.
Can you please advise how much you can negotiate for either the interest rate or the application fee on our behalf?

Thank you and regards,

Ravi Patel

Student response to Task 24: Question 3

FWD: To: Ravi Patel

ravi@jayzar.com.au

From: broker1@CCF&MB.com.au

Re: Recommendation

Task 25 ― Loan contracts and security documentation

Task 25: Question 1

When checking the loan offer contracts received from the lenders, what key points should you check to ensure the documents are accurate?

List a minimum of six (6) points.

Task 25: Question 2

If there is a guarantor involved, what type of professional should you recommend the client refer their loan contracts to prior to signing and why is this so important? Include which code you would be adhering to in doing so.

Task 25: Question 3

The clients have chosen to sign their contracts with you, in your capacity as a broker. Describe how you would explain the loan offer and security documentation to the client, as well as gain confirmation of their understanding of approval conditions of their finance.

Task 25: Question 4

(a) Now that the client has signed the documents, explain how you will submit the documents to the lender.

(b) Include a comprehensive list of the documents that the lender will require in order to proceed with settlement. This may also include lender-specific documents for the new loan account etc.

Task 25: Question 5

Explain to your client how you will communicate with them throughout the settlement process; include the method of communication and the timeframes. (This should be in line with the organisation service standards as outlined in the Toolbox.)

Task 25: Question 6

You have just received a call from the lender to advise the documents have been executed correctly. Describe how you will notify the client.

Task 26 ― Preparing the loan for settlement

Although a broker does not participate in the settlement process, they still need to remain in touch with all the stakeholders until the loan settles. Before the loan can settle the borrower needs to adhere to
pre-settlement conditions.

Task 26: Question 1

In the pre-settlement phase, there are items that need to be checked and satisfied. For each one, explain why it is required (i.e. what is the importance of each of item):

(a) building insurance

(b) independent legal advice.

Task 26: Question 2

Explain the settlement process to the client, include the personnel who are involved at each step

Task 26: Question 3

Explain a minimum of four (4) examples of issues that can occur which may delay or prevent a settlement.

Task 26: Question 4

Explain the steps in the process of registering security documentation.

Task 26: Question 5

When the lender is ready for settlement, they will contact the borrower’s solicitor and inform them of the expected settlement date, and request details of funds to be distributed at settlement.

The lender will then prepare a pre-settlement costing sheet and forward to the borrower’s solicitor in preparation for settlement. With the broker working closely with the borrower’s solicitor, when they receive a copy of the costing sheet, the broker can then make sure that all the particulars are correct.

For this task you are required to prepare the following pre-settlement statement for the purchase of the investment property for Ravi and Alice Patel.

Student response to Task 26: Question 5

Purchaser/s:
Property:
Purchase
Purchase price:
Less:
	Deposit paid	($)
Subtotal		$
Adjustments
Plus	Council rates	$
Less
Amount due on settlement to vendor		$
Disbursements
	Eastern Conveyancing
	Land transfer duty & fees
Amount due on settlement from purchaser

Task 26: Question 6

You are now at the closing stages of the loan process with this client.

(a) How and where do you file the information you have communicated with them?

(b) Once the settlement concludes, what else would you do to ensure you communicate with this client effectively?

For REF… Use: #getanswers2002088D