Type of Project
Please note: It is a requirement for students to make their submissions using this electronic assessment booklet. At the facilitator’s discretion any submissions made in another format may not be accepted. If you are completing the course via various computers, please save the one booklet on a USB so you can send the submission in using the one file
Please insert your NAME, DATE and the Manual Version Number on the first page of your Assessment Booklet.
Answering Assessment Questions
Each Assessment Booklet contains blank spaces for following assessment items:
When submitting Assessment Booklets for marking, please ensure that the entire booklet is completed.
Short Answer Questions
Using the space/s provided, please complete your answers making sure to:
Referencing Your Answers
Students undertaking the course must exhibit a range of skills in order to be confirmed as competent in their course. These skills include:
Please make sure that all assessments are documented in a way that exhibits your personal study and/or research. To that end would you please acknowledge all material and sources used in the presentation of your assessment whether they are books, articles, reports, Internet searches, or any other document or personal communication. For example, if:
Please note that no more than 5% of direct quoting which is referenced is deemed to be acceptable and no amount of direct quoting without referencing is deemed acceptable. Any direct quoting should form only a small portion of any answer and the answer should demonstrate the student understands and can interpret the question and provide an appropriate answer.
Whilst this will require more work for you I hope you will understand that we are trying to maintain high standards and support your progression into further qualifications.
Document Naming Instructions:
Save this file to your computer and please use the following protocol when naming the file:
SUBMISSION this relates to the number of times the file has been submitted. For example, your first submission would be S1, with any re-submission the file name should be recorded S2.
Note: If you are submitting handwritten assessments all questions must be completed in blue or black pen. If assessments are received in pencil or with illegible handwriting, a resubmission will be required.
Note: It is your responsibility as a student to keep a copy of all assessment submissions. IIT do not take responsibility for the loss of any submissions.
Distance Education Students
I understand that by completing this form I am bound by the following declaration.
To the best of my knowledge and belief, no part of this assignment for the above unit has been copied from any other student’s work or from any other source except where due acknowledgment is made in the text, or has been written for me by another person.
Name: Kiran Pandravada Date:26/09/2021
FBP: Chapter 3
International Institute of Technology © 6 VR240919
Short Answer Question 1
(a) Which sort of loans does the National Credit Code cover?
|· Credit cards
· Investment loans
· Hire purchase agreements
· Personal and home loan
· Mortgages and guarantees
(b) What evidence would So Sweet as a holder of an Australian Credit License be required to prove the following?
|So sweet has an Australian Credit License holder is required to be prove that they fulfil the rules ASIC have of them. Aggregators and ASIC could audit the Australian Credit License holder and require evidence that they are fulfilling their responsibilities. An Australian Credit License holder should not only ensure they have the requisite systems in place but also ensure they are updated.
An audit should be regularly undertaken to prove that the requirements are fulfilled. The process is about providing evidence that the requirements have been fulfilled. As an example, take the requirement to maintain an Australian Credit License.
To prove that the license exists the auditor would ask to sight the license, being careful to insist that it is the original rather than a copy, which could be manipulated. The auditor could take a photocopy of the original and place it on the audit file complete with their initial and the date under a statement that the original has been sighted.
It is important that the auditor proves that the license is still current so they should require proof that the annual fee has been paid to keep the license current. The invoice coupled with the evidence of payment e.g., the relevant bank statement or credit card would be good evidence that it was paid.
Other requirements could be proved using the same theory for example authorizations with their aggregator, mortgage brokers Continuing Professional Development requirements or audit loan documentation requirements. The process involves what documents would prove the responsibilities are being undertaken currently
(c) What would you do to implement an audit of loan documentation for staff and authority holders?
(d) What statutory records does a financial services organisation need to maintain?
Short Answer Question 2
(a) How can a mortgage broker avoid perpetrating unconscionable conduct?
(b) What are the most common client complaints?
Short Answer Question 3
You as part of a team have been requested by So Sweet to produce a Credit Guide. Your role is to emulate the credit guide which is located on the elearning platform under supporting documents called “Student Credit Guide Assistance”.
You must use your own address and phone number as the office address and number and your date of birth as the Australian Credit Licence Number i.e. ddmmyy.
Include a footer to show where the document is stored electronically. The document should be named so that the content and author are easily identifiable.
Use the following Style Guide to prepare the Credit Guide
Heading 1 Main headings – Calibri 16pt, Bold
Heading 2 Sub-headings – Calibri 11pt, Bold
Normal Normal text – Calibri 12 pt. at 1.15 spacing
Signature – Lucida Handwriting 16 pt.
Short Answer Question 4
(a) Briefly explain the most common types of frauds perpetrated in the mortgage industry?
|The most common type of mortgage fraud is falsifying the information on relevant
documents. The most common ways to commit a mortgage fraud are
· The application forms may contain falsified information about income, debt, employment and other issues
· Tax returns are also commonly manipulated documents because the information on a tax return may be altered to leave the impression of higher income
· Employment verification documents are also subject to manipulation because changes may be made to employment dates, hourly or salaried earnings, job position or other work-related information
· Bank deposit documents may be inflated e.g. a large deposit can be made from an outside source such as a credit card, friend or relative in order to increase the current balance, which leaves the impression of having more cash on hand than is actually true
· The valuation process can also be subject to fraud, which can be committed by the borrower, the valuer, or both e.g. the borrower could alter the valuation on the actual document, the valuer could inflate the home’s value, or the borrower could pay the valuer to inflate the home’s current value to obtain a larger amount of credit
· Fraudulent documents can be used to support the application for a very high-level loan; where the documents give the impression that the property is owned by a particular person when it is not, or where the value of a particular property that is being used as the security for the finance is inflated or ‘jacked up’, valuation fraud exists
· Forged title deeds and/or stolen identities can also be used to re-mortgage the property of unsuspecting homeowners and take the funds
· A Certificate of Title in the wrong hands allows a con artist to pretend they are the homeowner, perpetrate a fraud and obtain loan funds
(b) If a client perpetuates fraud, will the mortgage broker be liable?
Short Answer Question 5
One afternoon, Millicent asks if you would help with a client. She introduces you to Bob Butler who is one of Ying’s clients and then leaves. You invite Bob to sit down and ask him how you can help. Bob, who is 80 years old, launches into a tirade. You are able to move past his emotion and begin to determine whether there are genuine causes for what appears to be a pressing complaint.
Firstly, according to Bob, Ying has failed to return his phone calls for the past two weeks. This means that Bob has been experiencing great difficulty in obtaining a refund of the brokerage fee. Bob wants a refund because Ying failed to explain the terms and conditions of the prospective loan and because she refused to answer his questions. According to Bob, when his ‘solicitor friend’ read the fine print, the loan was of an ‘interest only’ nature.
Bob claims he specified that he was not interested in this kind of loan. He later found out that the other product Ying had recommended was out of date. Ying also refused to comment on the impact of an easement that appeared on the title of the property.
As an aside, Bob notes an administrative error in the invoice which he considers to be irrelevant because, in his words, he has “no interest in paying an incorrect invoice for an incorrect product rendered through inadequate service by an incompetent and inept broker”.
When Bob finishes venting, you explain that Ying was in a car accident and has been on sick leave for two and a half weeks. You immediately apologise for the firm’s oversight and failure to divert her phone calls, adding that you forwarded an email to Ying only this morning so that you can guarantee her ‘out of office’ reply is active. Bob, however, is old school and uses Australia Post or fax rather than email.
Believing you are making excuses for your colleague, Bob snaps back that he is “not interested in empty placations but rather workable solutions”. He stops, breathes and asks point blank, “Why am I always the mug that has to deal with idiots? What are you going to do to fix this mess?” Thankfully, at that moment, Bob’s mobile rings. He looks at the caller ID and tells you it is an important call; you offer to return in five minutes to continue the discussion.
You go straight to your office and access the ‘Credit Policies and Processes Manual’ which are available on the portal. You read the ‘Code of Conduct’ to determine what is expected of both you and Ying as financial advisers. You also search the document for two key words; ‘dispute’ and ‘complaint’.
The computer does not return any hits for either word. Given the time limit, you resign yourself to having to remember basic dispute resolution protocols from last week’s in-house training session. You analyse the situation as you know it and prepare yourself to continue dealing with the complaint.
iii. What are the key issues and how are you going to address them? Consider Ying’s actions, Bob’s expectations, Bob’s and Ying’s rights, basic dispute resolution procedures, and opportunities you can develop to enhance the quality of service your firm provides.
(b) When you return to the conference room, Bob demands you give him Ying’s contact number because his complaint is with her and not with you.
(c) Write an email to Millicent to document how you handled this matter (take a screen shot of the email to fulfil this aspect ensuring you include the email address it is being sent from). Also identify ways that you believe the office’s processes and standards can be improved as a result of the issues Bob raised.
(d) How did you monitor Bob’s level of satisfaction during your conversation? What signs did you look for to determine whether Bob left a satisfied customer?
Legislative and Regulatory Frameworks in Mortgage Broking