Essay Mortgage Brokers Face Important Compliance Requirements – Finance Assignment Help

Assignment Task :

Task 1: Identify and Interpret Compliance Requirements 

1. Identify compliance requirements

Mortgage brokers face important compliance requirements, the foremost among them being the reasonable lending provisions of the NCCP Act. The penalties for non-compliance include loss of license (for businesses) and removal from the industry (for individuals). If fraud is involved there may also be the criminal penalties of fines and/or imprisonment.
Compliance requirements are not static. It is therefore important to stay up to date with them.
Mortgage brokers also need to keep up-to-date with the actions of the regulatory authorities such as APRA and the Reserve Bank. Their actions may not amount to direct regulation, but through their effects on interest rates and bank lending these authorities can have a very direct impact on the business mortgage brokers are able to do.

A key requirement of the responsible lending obligations is the ‘unsuitability test.’ What must a mortgage broker do to comply with the unsuitability test?
No

1. Make reasonable inquiries about the borrower’s requirements and objectives
2. Make reasonable inquiries about the borrower’s financial situation 
3. Take reasonable steps to verify that financial situation

b. List the sorts of items a client’s requirements and objectives could include (as indicated by ASIC).