Make sure your broker knows current policy

My broker submitted a loan for me a few weeks back, with a lender who had already tightened their servicing calculators. We had discussions that things had changed and she provided me with the new borrowing capacity for that lender. We went ahead, and today after playing circus games for a few weeks I've been declined due to not servicing. Turns out she wasn't aware how servicing had changed in terms of adding our liabilities to the calculator and now we have no capacity at all with that lender.

I know this sounds like a lesson for dummies, but perhaps in this climate we need to ask the broker to check with their BDM for confirmation on servicing before they submit a loan. As an ex broker I tend not to rely on the broker's word as gospel and ask many questions but even this didn't stop me from being stung.

BTW it's not a broker from here. From what I've read on here to date you guys are very much on top of things.

 

At this point it's not the new policies that are the tricky component of an application, it's what's not being said by the lenders.

Servicing policies should be a no brainer for any broker as the lenders provide a calculator which we should be checking against. If in doubt, the broker should be calling the bank, asking some questions and getting it right. Whilst this might cause a false start on the recommendation, it shouldn't lead to a bad application.

The real challenge is around the less tangible aspects such as the lenders risk assessment. They don't publish policies around this, the comment tends to be, "too high risk", without any real clarification on why. How do you tell a client that the bank thinks they're too high risk when their own Veda score says they're low risk?

 

Was it a Mac or Nab deal?

If it's not servicing due to the lender loading your liabilities with their new assessment rate - consider looking at Adelaide Bank and Firstmac who continue to assess other banks debt at actual. Get in quick though.

Cheers

Jamie

 

Only a couple days left of the Adelaide Bank gravy train unfortunately - but Firstmac are certainly actively reminding brokers their policy hasn't changed.

As per the original poster, it is increbibly important for brokers to be up to date with the current and near future policy changes of lenders - I'd wager the majority on this forum are well up to speed.