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Brokers should not baulk at offering low doc loans to their clients under NCCP requirements, Pepper’s director of sales and distribution Mario Rehayem has claimed.
Last week ASIC said that following a review of broker activity low doc loans were highlighted as a growing area of compliance concern under the new NCCP.
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According to ASIC, the major non-compliance risk associated with offering low doc loans was the steps taken to verify a consumer’s income.
While the ASIC review will undoubtedly make some brokers nervous about writing low docs, Mr Rehayem said any extra caution was unnecessary.
“At Pepper we don’t just get a loan application and approve it. We abide by the responsible lending requirements and make sure borrowers have the ability to pay back the loan,” he said.
“We wouldn’t put our licence in jeopardy, so brokers need not be worried that ASIC is going to suspend their license for failure to meet the new requirements.
“As long as brokers are cautious and take all the right steps, then they should continue to write low doc loans as per normal.”
