Login
ISCOVER
Westpac, St. George and RAMS are the latest lenders to tighten up on their policy for self-employed borrowers.
As of 5:00pm today, RAMS Home Loans will require all low doc loan applications to be supported by Business Activity Statements (BAS) for the past 12 months, an Australian Taxation Office Lodgement Reference Number and account statements for the last three months that show evidence of tax payments.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
RAMS’ head of product Joanne Reid told Mortgage Business the changes were introduced to bring the company’s policy in line with that of the competition.
“We are always reviewing our competitive position,” Ms Reid said.
“We understand that some subtle changes can improve our position in this competitive environment.”
According to Ms Reid, the changes will help RAMS address their servicing issues including extended turnaround times.
“We have employees on staff that are currently working 6 to 7 days a week in order to reverse the situation,” she said.
RAMS is not the only mortgage provider to introduce policy changes to their low doc loans.
Last week St George announced that all low doc home loan applications must be supported by a BAS for the last 12 months, the last statement being no more than 3 months old at the date of application.
Westpac also recently implemented similar changes.
Effective from the 23 September 2009, the bank stipulated that all low doc applications must be supported by 12 months worth of BAS as part of the application document requirements.
Greg Strachan, national sales manager for Better Mortgage Management, said the changes to low doc loans by St George, Westpac and RAMS was good news for non-bank lenders.
“These changes help even out the playing field and will allow non-bank lenders to be more competitive in the self-employed sector,” Mr Strachan told Mortgage Business.
“CBA, ANZ and NAB all changed their low doc loan policies six or more months ago. St George and RAMS have now brought themselves in line with the other lenders.”
While Mr Strachan said the changes would mean fewer self-employed borrowers would qualify for the low doc loans, he said the there was still strong demand in this sector, and as such, a lot of opportunities for non-bank lenders and brokers alike.
