One of the four major banks in Australia has made revisions
on their home lending policy in accordance with the new banking code that was
ANZ has recently updated its co-borrower and financial abuse provisions as provided by the new Banking Code of Practice.
The purpose of their revisions is to address the concerns
within the original wording of the declaration forms from which the broking industry
stakeholders are worried to impose legal obligations on brokers who are
unqualified to assess a borrower’s vulnerability.
Let Us Take A Look The Changes That ANZ Has Made:
The broker must document the details of the substantial benefit if each co-borrower is receiving a substantial benefit from a loan. This applies to the following situation:
- When the co-borrower will acquire a legal rightful share or a reasonable interest in assets purchased with the loan funds.
- When a rightful share of the loan funds is used
to repay the co-borrowers debts or other obligations owed by the co-borrowers.
If in the case that substantial benefit can’t be proven,
some additional questions are required in order to protect a co-borrower.
- They have stated that all co-borrowers should understand all the involved risks before entering into the loan. Similarly, they should know the difference between being a co-borrower and a guarantor.
- The co-borrowers should provide reasons why they want to become a co-borrower, and this must be in line with the lending policy.
In addition, ANZ revised its
financial abuse declaration form in which a broker’s obligation is to make sure
that all throughout their dealings in accordance with the loan application
- None of their applicants has stated that he or
she is subject to financial abuse
- They have not seen anything that they would
consider to be a form of financial abuse.
All of the revisions from the ANZ were implemented after the
Australian Banking Association, the Mortgage & Finance Association of
Australia, and the Finance Brokers Association of Australia have all agreed on
a common strategy to identify financial abuse in a co-borrower arrangement.