broker distribution operations manual

98 Pages·2017·0.7 MB·English

ANZ.800.314.0003
BROKER DISTRIBUTION
OPERATIONS MANUAL
11.16
ANZ.800.314.0004
DISCLAIMER
© Copyright
Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522.
Australian Credit Licence Number 234527. ANZ's colour blue is a trade mark of ANZ.
The purpose of this document is to provide you with information on ANZ's products to
assist you to market and promote ANZ’s loan products under and in accordance with
the Originator Agreement (‘OA’). This document is not to be used for any other purpose.
The information contained in this document does not constitute financial advice and
does not purport to contain all the relevant information that you may require in
performing your duties under the OA. You should advise your customers to conduct
and rely upon their own investigations and analysis of whether to purchase the
products. ANZ recommends that any decision to purchase our products should be
based on the appropriate product Terms and Conditions. Please refer to the Brochures
and Onboarding section on the broker Portal (www.anz-originator.com.au).
Neither the issue of this document nor any part of its contents constitutes an offer
to sell or solicitation of an offer to buy ANZ's products.
In no circumstances will ANZ or its related bodies corporate and their respective
directors, employees, advisers, agents and contractors (together known as "ANZ"),
be responsible for any costs or expenses incurred by you or your clients in connection
with the investigation of a possible purchase of the products. Except to the extent
permitted at law, ANZ accept no liability (including negligence), for loss or damage
arising in connection with the information contained in this document.
The information contained in this document is current as at the date of publication
and is subject to change. ANZ will not be responsible for informing you of any specific
changes made to the information contained in this document.
NOTICE OF CONFIDENTIALITY
The information disclosed in this document is provided to you strictly on a
commercial-in-confidence basis. Except where required at law or with ANZ's written
consent, you may not disclose the information contained in this document to any
person other than for the purpose of assisting you to perform your duties under the
OA and only if you have made such person aware of your obligations under this
document before you disclose information to them.
ANZ.800.314.0005
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Table of contents 4.3 Residential Investment Loans 23
4.3.1 Residential Investment Variable Loan 23
1. Background 5 4.3.2 Residential Investment Fixed Loan 24
4.3.3 Residential Investment Simplicity PLUS Loan 26
1.1 Background of Australia and New Zealand Banking
Group Limited 5 4.3.4 Residential Investment Land Loan 27
1.2 Approved originators 5 4.3.5 Residential Investment Supplementary
Variable Loan 28
2. Legislative Requirements 6
4.3.6 Residential Investment Supplementary Fixed Loan 29
2.1 Responsible Lending 6
4.4 Home And Residential Investment Loans In A
2.1.1 Responsible Lending 6
Company/Trust Name 31
2.1.2 Mortgage Application Timeframe Overview 6
4.4.1 Standard Variable Home Loan – in a company name 31
2.1.3 Understanding the First Decision Date (FDD) 7
4.4.2 Fixed Home Loan – in a company name 32
2.2 National Consumer Credit Protection Act (NCCP) 7
4.4.3 Residential Investment Loan Variable -
2.2.1 Regulated Loans 7 in a company name 34
2.2.2 Unregulated Loans 7 4.4.4 Residential Investment Loan Fixed –
2.2.3 The Tests 7 in a company name 35
2.2.4 Applying the Tests 8 4.4.5 Equity Manager in a Company Name 37
2.2.5 The Entity Test - Who is borrowing the money? 9 4.5 Lines of Credit 38
2.2.6 The Purpose Test - Why are they borrowing 4.5.1 Equity Manager 38
the money? 9 4.6 ANZ Offset Accounts 38
2.2.7 The Exceptions Test 9 4.6.1 ANZ One 38
2.2.7.1 Notes 9 4.6.2 ANZ Business Mortgage Loan Offset 39
2.2.8 Declaration of Purpose 10 4.7 Lock Rate Facility 39
2.2.9 Marketing Regulated Loans 10 4.7.1 ANZ Lock Rate Application Process 40
2.3 Code of Banking Practice 10 4.7.2 ANZ Lock Rate Frequently Asked Questions 40
2.4 The Australian Consumer Law and The ASIC Act 11 4.8 Guarantee 40
2.4.1 Unconscionable conduct 11 4.9 Packages 44
2.4.2 Misleading and deceptive conduct 11 4.9.1 ANZ Breakfree Package 44
2.4.3 False representation 11
5. Lending Criteria 46
2.4.4 Harassment and coercion 11
5.1 Income Verification 46
2.5 Privacy Act 12
5.1.2 Self employed (Non PAYG) definition 49
2.5.1 Australian Privacy Principles 12
5.2 Acceptable Securities 55
2.5.2 Types of information 12
5.2.1 Standard Residential Property 55
2.6 Financial services - the Corporations Act 12
5.2.1.1 Residential vacant land 55
2.6.1 Which Products are affected? 12
5.2.1.2 Homes under construction 57
2.6.2 Mortgage Offset Accounts 13
5.2.1.3 Residential homes 57
2.6.3 What is “Advice”? 13
5.2.1.4 Residential units 57
3. Authorised Officers (Brokers) 14 5.2.1.5 Residential townhouses 57
4. Loan Products 15 5.2.1.6 ACT leasehold 57
4.1 Types of Loan Products 15 5.2.1.7 Rural residential housing – up to 10 hectares 57
4.2 Home Loans 16 5.2.2 Non-standard residential 57
4.2.1 Variable Home Loan 16 5.2.2.1 Development land 58
4.2.2 Fixed Home Loan 17 5.2.2.2 Property development 58
4.2.3 Simplicity PLUS Home Loan 18 5.2.2.3 Small residential properties and
apartments (<40m2) 58
4.2.4 Residential Land Loan 20
5.2.2.4 Bachelor/bed sitter/studio/warehouse units
4.2.5 Supplementary Variable Loan 21
& apartments 58
4.2.6 Supplementary Fixed Loan 22
5.2.2.5 Multi-dwellings on one title 58
5.2.2.6 Company title units 58
5.2.2.7 Hotel/motel re-development 58
ANZ.800.314.0006
5.2.2.8 University apartments/student accommodation 58 Guide 76
5.2.2.9 Rural residential housing/rural housing- 6.5 Preparing The Application 76
>10 hectares 59 6.5.1 Interpreting the Loan Application 76
5.3 Unacceptable Securities 59 6.6 Submitting The Application 76
5.3.1 Serviced apartments 59 6.6.1 ANZ Online Application 76
5.4 ANZ Loan-To-Value Ration (LVR) Policy Guidelines 59 6.6.2 LIXI Application 79
5.5 Lenders Mortgage Insurance (LMI) 61 6.6.3 ANZ Paper Application Kit 81
5.5.1 LMI Premium Refunds 61 6.7 Application Decision 83
5.6 Genuine Savings 61 6.8 Loan Documents 84
5.6.1 Lender’s Mortgage Insurance (LMI) compliance 6.8.1 Receiving the Loan Documents 84
requirements 61
6.8.2 Mortgage Interview Guide 84
5.6.1 (a) Maximum Loan to Valuation Ratio 61
6.8.3 Letter of Offer 86
5.6.1 (b) Genuine Savings Requirement 61
6.8.4 Witnessing Documents 86
5.6.2 Unacceptable types of genuine savings for LMI 62
6.8.6 Guaranteed loans 88
5.6.3 Borrower’s Contribution 62
6.8.7 Settlement 88
5.6.4 Expenses 64
6.8.8 Further Communication 88
5.7 Non-Residents 64
6.9 Anz Branch – Customer Identification Procedure
5.8 Owner Builders 64 And Opening Other Anz Accounts 88
5.9 ANZ Lo Doc Policy 65 6.10 Loan Restructure And Loan Management 89
5.10 Valuations 66 6.10.1 Understanding Turn around Times for
5.10.1 Ordering a Valuation 66 Loan Restructures 89
5.10.2 Valuation Administration Fee 67 6.10.2 Renewing or Modifying an Approval 92
5.10.3 ANZ Valuations System FAQs 67 6.11 Bank Initiated Renewals (Birs) 92
5.11 Home Loan Pricing Request 69 6.12 Credit Assessment Statement 93
6. Loan Applications 70 6.13 Key Facts Sheet (Mortgages) 93
6.13.1 How can a Broker provide a KFS? 93
6.1 Customer General Enquiry 70
6.13.2 Where can the customer access the KFS tool? 93
6.2 Loan Application Process 70
6.14 Key Facts Sheet (Credit Cards) 93
6.2.1 Approved Originators applying for their
own lending 71 6.14.1 How can a Broker provide a KFS? 93
6.3 Loan Interview 71 7. The ANZ Broker Website 94
6.3.1 Purpose of the Loan Interview 71 7.1 Www.anz-Originator.com.au 94
6.3.2 During the Loan Interview 71 7.2 Documents And Forms 95
6.3.3 Procedure for conducting the Loan Interview 72 7.3 Manage My Details 95
6.3.4 Exceptions for Interviews in Person 74 7.4 Application Tracking 95
6.4 Completing The Loan Interview Diary Note 74 7.5 ANZ Toolkit 96
6.4.1 Purpose of the Loan Interview Diary Note 74 7.6 Contact Points 97
6.4.2 Requirement 74
6.4.3 Benefit to All Parties 74
6.4.4 Customers acting under duress or disability 75
6.4.5 Do customers comprehend their obligations? 75
6.4.6 Advising Guarantors 75
6.4.7 Using Lawyers, Financial Counsellors and
Interpreters 75
6.4.8 Providing details of other pertinent information 75
6.4.9 Ensuring relevant booklets and brochures
have been provided 75
6.4.10 Signing and dating the Loan Interview Diary Note 76
6.4.11 Signing and dating the ANZ Mortgage Interview
ANZ.800.314.0007
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1. Background
1.1 B ackground of Australia and New Zealand Banking however is subject to change. Policy and Product
Group Limited updates will be communicated via Broker News and
other email notifications. To ensure your email address is
1.2 Approved Originators
up to date, please visit the ‘Update My Details’ page on
the ANZ Broker Website (www.anz-originator.com.au).
1.1 Background of Australia and New Zealand Banking
Group Limited Whilst the Approved Originator has no authority to
Australia and New Zealand Banking Group Limited approve loans on behalf of ANZ, the Approved
(ABN 11 005 357 522) (“ANZ”) has its origins in London, Originator is expected to comply with the obligations
when in 1835 the Bank of Australasia was established under the Originator Agreement, this Operations
under Royal Charter. Manual and all applicable ANZ policies.
In 1951 the Bank of Australasia merged with the Union Approved Originators must not engage in conduct
Bank of Australia (established 1837) to form Australia where ANZ considers that the Approved Originator is
and New Zealand Bank Limited. Later, in 1970, seeking to refinance loans at a rate or in a manner
Australia and New Zealand Bank Limited and the which may constitute churning, or in the opinion of
English, Scottish and Australian Bank Limited ANZ, engage in conduct where the major reason for
(established 1852) formed the Australia and New seeking to refinance loans is the generation of sales
Zealand Banking Group Limited. commission for the Approved Originator, rather than
the servicing of the customers’ needs.
Today ANZ is one of the largest companies in Australia
and a major international banking and financial Despite the fact a loan application may meet the
services group. By assets, ANZ is one of the world's criteria detailed within this Operations Manual; ANZ
100 largest banks, with representation in more than reserves the right to decline the loan application.
33 countries.
An Approved Originator is fully responsible for the
actions and behaviours of any Authorised Officers
1.2 Approved originators
(which includes all employees, contractors or agents
ANZ has appointed your company as an Approved
of the Approved Originator) who act on behalf of the
Originator Company to market ANZ's loan products.
Approved Originator in performing its obligations
Only officers of an Approved Originator Company who
under the Originator Agreement, and will be held
have achieved accreditation as Approved Originators
accountable for their actions.
under the Originator Agreement and completed all
necessary ANZ Broker Distribution training sessions,
and who are members of both a recognised industry
body and an eligible External Dispute Resolution
Scheme, are authorised to market ANZ’s loan products
in accordance with the terms of the Originator
Agreement.
An Approved Originator is not an agent of ANZ and at
all times will conduct its business independently of
ANZ. Despite the fact that an Approved Originator acts
totally independent of ANZ, an Approved Originator
must adhere to a standard that ANZ considers
acceptable when marketing the Bank’s products.
Any reference to the ANZ name, logos, trademarks etc,
in any publication requires prior written approval
from ANZ.
This Operations Manual is designed to provide
information and guidelines to enable an Approved
Originator to achieve and maintain an acceptable
standard when marketing ANZ’s products. It provides
an overview of legislative requirements, explains
ANZ’s products and lending criteria, and details the
steps to follow when marketing and assessing an ANZ
loan. The information contained in the Operations
Manual is current at the date of publication (April 2015)
ANZ.800.314.0008
2. Legislative Requirements
2.1 Responsible Lending • Take steps to verify the consumer’s financial situation
2.2 National Credit Code • Make reasonable inquiry as to whether any of the
customers income is made up of overtime and/or
2.3 Code of Banking Practice
commission
2.4 Trade Practices and the ASIC Act
• Based on these inquiries, form a view as to whether
2.5 Privacy Act the contract is unsuitable for the consumer
2.6 Financial Services Reform (FSR) Act In addition, the Responsible Lending obligations also
apply where a CAP -
2.1 Responsible Lending
• Suggests that a customer increases the limit on
2.1.1 Responsible Lending an existing credit contract or assists the consumer
Regulation of consumer credit is the responsibility of to increase the limit
the Australian Securities & Investments Commission
• Suggests to a consumer that they remain in an existing
(ASIC). A key component of the regime is that
contract or consumer lease which is unsuitable.
businesses who provide credit services or who are
engaged in other ‘credit activities’ are required to be The key concept is that credit licensees and CAPs must
licensed and meet a range of obligations, including not enter into a credit contract with a consumer,
the Responsible Lending obligations. suggest a credit contract to a consumer or assist a
consumer to apply for a credit contract if the credit
These obligations apply to both credit providers (i.e.
contract is unsuitable for the consumer.
lenders such as banks, credit unions and finance
companies) and credit assistance providers, such as
2.1.2 Mortgage Application Timeframe Overview
mortgage or finance brokers.
Customers have 85 or 115 days (Application
Broadly speaking, before a credit licensee or a credit timeframe) to enter a credit contract from the First
assistance provider (CAP) (including an Approved Decision Date, which includes any time required for
Originator) suggests, assists with, or provides a new Conditional Approval (Approval in Principle (AIP) or
credit contract or lease to a consumer, the credit Approval Subject To (AST)).
licensee or CAP must -
The timeline below provides you with a visual
• Make reasonable inquiries of the consumer about representation of the Mortgages Application
their financial situation Timeframe and an awareness of the critical dates
within this Timeframe.
• Make reasonable inquiries of the consumer about
their requirements and objectives in relation to
the credit contract
Total of 85/115 days for Application
timeline Expiry
Buffer LoO must be accepted
Period AIP/AST valid for 85/115 days before 85/115 days
STOP
5 Days
1st Decision Date 85/115 days
Re-assess
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These validity periods are dependant on the main purpose of the loan.
Type of Purchase Conditional Approval Application Timeline
Other Purposes 85 Days 85 Days (Total)
Residential Property Purchase 115 Days 115 Days (Total)
2.1.3 Understanding the First Decision Date (FDD) • The credit (including refinance credit) is provided
First Decision Date (FDD) is the date when an or intended to be provided predominantly* for
application first progresses to one of the following personal, domestic or household purposes or for
states: AIP, AST, Approved or Declined. the purpose of purchasing, renovating or
improving residential investment property [* See
The NCCP expiry time frame – or the last date the Section 2.2.7.1 Notes concerning the meaning of
Letter of Offer can be accepted – can then be “predominant”].
calculated by adding 85 or 115 days dependant on the
product purpose. 2.2.2 Unregulated Loans
115 days is added for ‘Purchase Residential Property’ A loan is unregulated if:
(where the property secures the loan), and covers • It does not meet either of the above criteria for
funds for; regulated loans, or
• Purchasing a residential dwelling for occupation, • It is specifically exempt from the application of the
rent or resale National Credit Code
• Purchasing vacant land Examples of unregulated loans include:
• Constructing a residential dwelling for occupation, • Loans wholly or predominantly used for business
rent or resale or investment purposes (other than investment in
85 day is added for ‘Other purposes’, and covers funds for; residential property) e.g. shares or managed funds,
or
• Refinancing a loan (whether OFI or ANZ)
• Exempt loans such as short-term credit (where the
• Borrowing for car, holiday or investment credit is only provided for a period not exceeding
62 days) or bill facilities.
• Renovations
* NB: All unregulated home loans are treated as regulated lending
Combined loans for different purposes such as a
by ANZ
mortgage and car loan will use the lesser of the
timeframes i.e. 85 days. 2.2.3 The Tests
In order to determine whether or not credit is
2.2 National Consumer Credit Protection Act (NCCP)
regulated by the National Credit Code there are three
The NCCP Act including the National Credit Code
questions to be asked:
regulates consumer credit contracts.
• Who is borrowing the money? [The Entity Test],
2.2.1 Regulated Loans
• Why are they borrowing it? [The Purpose Test],
A loan is regulated by the National Consumer Credit
Code if: • Is the loan exempt from National Credit Code?
[The Exemptions Test]
• The customer(s) (the borrowers) are individuals,
joint individuals or a strata corporation, individual
as trustee, unincorporated association or
partnership, and
ANZ.800.314.0010
2.2.4 Applying the Tests were to be made to a company, it would fail the Entity
Tests should be applied in the following order: Entity, Test. It is therefore unnecessary to apply the Purpose or
Purpose and Exceptions. Exception Tests (although ANZ would still require an
understanding of why the company wants the money
If a loan does not pass one test, it is unnecessary to (unregulated loan) for credit assessment purposes).
apply the remainder of the tests. For example, if the loan
The following diagram shows how to apply the tests:
Entity Test
Individual Organisation
Individual Company
Joint Individuals Corporate Trustee
Individual Trustees Incorporated Association
Strata Corporation Government Organisation
Unincorporated Associations
Sole Proprietor
Partnership
Purpose Test
Is the intended purpose of the
credit for more than 50%
YES Take a Declaration
business purposes or
of Purpose signed
investment purposes other
by all parties.
than investment in residential
property?
NO
Exception Test
Is it:
• I n the form of a contingent
liability?
YES
• Credit without express prior
agreement
• S hort term credit limited by
contract to 62 days or less?
• In the form of a bill facility?
NO
REGULATED UNREGULATED
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2.2.5 The Entity Test - Who is borrowing the money?
A customer could fall into one of the following groups:
Individuals (Natural Persons) Non Individuals (Organisations)
Individuals OR Company (Corporation)
Joint Individuals Corporate Trustee
Individual Trustees Incorporated Association
Unincorporated Associations Government Agency
Sole Proprietors Statutory Corporation
Partners
Strata Corporations
If your customer is in one of the Individual groups, the 2.2.7 The Exceptions Test
loan may be regulated and you will need to complete Some loans that are made to individuals
the Purpose Test. If your customer is in one of the predominantly for personal, domestic or household
Non-Individual groups, the loan is unregulated and use that would be regulated by virtue of the Entity and
you do not need to apply any further tests (subject to Purpose Tests may nevertheless still be unregulated if
ANZ policy regarding home loans which are treated as they are the subject of a specific exemption.
if they are regulated).
The important exceptions are:
2.2.6 The Purpose Test - Why are they borrowing
• Short Term Credit, that is credit provided for 62
the money?
days or less;
These are often NOT easy questions to answer. A
single loan may be for several purposes. • Credit in the form of a Bill Facility;
Insufficient enquiry may cause problems, as it would • Margin loans;
not be enough to simply accept, as the purpose of a
• Credit in the form of a contingent liability facility;
loan, “to buy a house or to buy a car”. You need to
establish what the customers are going to do with • Loans to employees of the financier but only if
the goods or services being purchased with the they are provided on concessional terms; and
loan proceeds.
• Credit provided without prior agreement (for
It is important to note that the purpose is to be example, where a customer overdraws an account
determined at the time the loan is being made. without prior consent from the financier).
(See Section 2.2.7.1 Notes concerning “Purpose”.) 2.2.7.1 Notes
The National Credit Code will regulate loans to natural “Predominant”
persons if the credit is provided predominantly for
The predominant purpose of a loan is the purpose for
personal, domestic or household purposes or for the
which more than 50% of the credit is intended to be
purpose of purchasing, renovating or improving
used, or
residential investment property. It is difficult to be
precise about the meaning and extent of “personal, Where the loan is provided for several different
domestic or household” purposes. A loan to buy purposes, the predominant purpose is the purpose
furniture or a motor vehicle, boat or computer for for which the goods or services are to be most used.
private use falls within the definition and are therefore
Note: ANZ policy defines “predominant” for regulated credit as 50% or
treated as regulated. A loan to buy a motor vehicle or
more for personal, domestic or household purposes or for the purpose
computer for use in connection with a business would of purchasing, renovating or improving residential investment property.
be unregulated.
Example: If a client wishes to borrow a total of
Loans for investment purposes (other than investment $100,000 for the following purposes: purchase
in residential property) are NOT for personal, domestic business car $40,000, purchase boat $35,000 (for
or household purposes. For example, a loan to purely personal use) and $25,000 for a holiday
purchase shares or some other income producing then as 60% of the money to be lent is to be
asset would be unregulated (i.e. not be regulated by used for “personal, household or domestic”
the National Credit Code). purposes, the loan will be regulated by the
National Credit Code.
ANZ.800.314.0012
Extreme care must be taken in relation to loans to 2.2.9 Marketing Regulated Loans
purchase goods that will be used for a mixture of Approved Originators must not:
personal, investment and business uses (particularly
motor vehicles). It will be necessary to obtain clear • Make false or misleading statements
instructions from the customer and make reasonable
• Harass a potential customer to sign a loan
inquiries about the relative percentages of intended
contract. This includes verbal and physical contact
personal, investment and business use. If the
with the customer
predominant purpose is determined to be investment
(other than investment in residential property) or • Visit a person’s place of residence to try and
business use, a Declaration of Purpose must be persuade that person to obtain credit, unless
obtained to confirm this. by prior agreement made with any resident of
the household.
“Purpose”
2.3 Code of Banking Practice
The purpose of a loan may be unclear where one or
more existing loans are being refinanced. It is possible The Code of Banking Practice sets out the banking
that the refinancing of business or investment debts industry's key commitments and obligations to
may not, in some circumstances, qualify for the customers on standards of practice, disclosure and
description of a loan for business or investment principles of conduct for their banking services.
purposes (for example, if the business is no longer
The requirements set out in the Banking Code of
trading). If in doubt, contact ANZ for guidance.
Practice are additional to those contained in the
Note: ANZ Policy requires that refinancing any debt owed by National Credit Code.
individuals is to be treated as regulated, irrespective of the original
purpose, unless the interest charged on the new credit facility will be The Approved Originator must familiarise themselves
a tax deductible expense. with the Code of Banking Practice and ANZ policy and
procedural requirements are in the place to
2.2.8 Declaration of Purpose ensure compliance.
If a loan is unregulated (e.g. purchase of shares or
For example, ANZ must ensure that the customer has
managed funds) a Declaration of Purpose is required.
the capacity to repay the loan taking into account a
Where a Declaration is not collected and the customer
number of factors:
later claims that the National Credit Code applies to
their loan, the onus to prove otherwise rests with ANZ. • the customer’s income and expenditure
Rules that must be followed when accepting a • the purpose of the Banking Service
Declaration of Purpose are:
• credit scoring
• A Declaration of Purpose must be obtained from
• the customer’s assets and liabilities.
all the parties to the loan;
Under the Code of Banking Practice, ANZ must also:
• A Declaration of Purpose must be taken at the
time the loan application is made; • disclose to customers fees, charges and costs
• A separate Declaration of Purpose must be taken • keep customer information confidential
for each credit application;
• recommend that prospective guarantors obtain
• If there is lending for multiple purposes under the legal advice
one credit application, please clearly note which
• provide important and relevant information to
lending is to be covered by the Declaration of
prospective guarantors
Purpose by listing out the amount and purpose of
this lending; • not engage in deceptive or misleading behaviour.
• The Declaration of Purpose will be ineffective if the
person taking the Declaration of Purpose or
involved in the transaction knows, has reason to
believe, or would have known if they had made
reasonable inquiries, that the loan is to be used
predominantly for personal, domestic or
household purposes; and
• All parties to the loan must sign and date the
Declaration of Purpose.