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Alert · 25 November 2011 |
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MacGillivrays |
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Key Facts Sheets for Home Loans - Implications for Mortgage Managers |
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As from 1 January 2012 (current proposed start date) Credit Providers will have to give potential customers the ability to generate a Key Fact Sheet on their website.
The capacity to generate a Key Facts Sheet does not need to be present in all circumstances, only where “the credit provider” has a website that can be used by a consumer to apply for or make an enquiry about, one or more standard loans of the “credit provider”.
There is a separate obligation for a credit provider to provide a Key Facts Sheet for a loan on request. The Key Facts Sheet is required to be in a certain format (as set out in schedule 5 of recent amending regulations) and must include matters such as:
< Lender and Product name < Interest Rate < Fees and Charges < Repayments < Repayments (factoring in “on-going” fees)
Link to Schedule 5 to the National Consumer Credit Protection Amendment Regulations 2011 (No.5).
We understand that some lenders are informing their mortgage managers, that they cannot create a Key Fact Sheet on behalf of mortgage managers. In part due to:
< the diversity of products offered, < the fact that interest rate is set by the mortgage manager, and < that the lender may not know the full extent of fees and charges imposed by mortgage managers.
While mortgage managers are technically not directly affected by this legislation, in practice our understanding is that some lenders are putting it back on the mortgage manager to have the mortgage manager’s website contain and display a Key Fact Sheet for the mortgage managers home loans.
If mortgage managers are in fact required at law and by lenders to do this, then fortunately there are a number of third party service providers which can provide this service.
Our understanding is that one of the service providers does this by providing a hyperlink to their own hosted website which will enable a Key Facts Sheet to be generated based on key data previously inputed by the mortgage manager/lender.
Each mortgage manager needs to consider their own position both vis a vis the lenders and the requirements of the legislation.
Article by Richard Williams, Partner, Banking Services.
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Buying or Selling a Business? Contact MacGillivrays Corporate & Business Services 1300 369 581 or johnm@macgillivrays.com.au.
PLEASE NOTE: This article is not legal advice and our comments are of a general nature only. This document is not to be relied on as substitution for proper detailed legal advice. Liability limited by a scheme approved under professional standards legislation.
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