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ISCOVER
Staff Reporter
The new regulations have made writing solid volumes more “challenging”, industry pundits have claimed.
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Speaking to The Adviser, Smartline’s Kevin Lee said the responsible lending conduct obligations as detailed under Chapter 3 of the National Consumer Credit Protection Act had made lenders more meticulous and particular than ever.
“The banks have got responsible lending guidelines that they have to adhere to. They all have their own interpretation of what those guidelines mean, so there is no consistency amongst all the lenders. They all require different information, which means it now takes twice as long to write a loan,” he said.
“In addition, some of Australia’s lenders have no concept of what responsible lending means, so they want a lot more information on every single deal. A deal that is so simple that it would have been approved within hours three years ago, now has the ability to drag out over days and weeks.”
Mr Lee‘s comments are largely echoed by Custom Finance’s David Chapman.
Mr Chapman agreed with Mr Lee and said NCCP had given the lenders the right to be “overly pedantic” with loan submissions.
“They are definitely asking for more information and they won’t hesitate to question the tiniest thing,” he said.
“If a loan is rejected and you question it, they will blame it on NCCP and their responsible lending obligations.”
But while some brokers believe NCCP is slowing down the whole loan process, it seems not everyone agrees.
First Choice Home Loans’ Brad Oliver said while lenders were asking for more information on every loan submission, the time to settlement has not changed greatly.
“It is taking about the same amount of time to process a loan as it used to. I have no real issues dealing with the enhanced responsible lending obligations.”
