Brokers' tick

Brokers have welcomed changes that streamline processes by allowing digital delivery of data, rather than by letter. For example, an applicant’s income or annuity provider will be able to be verified by an accountant’s email.

Brokers said the change should cut bureaucracy and speed processing.

A new “minimum document standards matrix” sets out standards required for supporting verification documents such as maximum allowable age, minimum information and acceptable document formats.

“Current policy allows for verification of certain items via a letter from a creditor, service provider or employer. It is now acceptable for an email advice,” the bank spokesman said.

A translation checklist is being introduced to identify commitments in foreign currency and specify which currencies are acceptable.

Loan-to-value ratio rules also are being clarified to remind borrowers that each LVR covers only one loan. In addition, warehouse conversions and stratum title, where a property is divided into lots, are no longer eligible for mortgage insurance cover.

Several lenders, including Aussie Home Loans, UBank and ING are changing their lender discharge processes, which are needed when a borrower refinances.


Additional delays

Westpac has warned intermediaries to be aware of the changes to avoid delay and expense.

But additional delays processing loan applications could anger mortgage brokers and financiers who already have complained of an industry-wide bottleneck in mortgage applications, rising costs and vastly reduced borrowing capacity.

Westpac’s top-level "platinum" advisers typically receive an initial assessment in about three business days, A+ in about eight days and standard brokers in 10. Additional queries by the bank, or processing mistakes, can delay completion by days.

From next Monday, National Australia Bank is also tightening lending standards, introducing a debt-to-income ratio to improve understanding of borrowers’ full financial circumstances by considering existing long and short-term debt commitments.

Debt to income is the ratio of a customer’s total debt from all sources divided by their total income. The measure will complement the existing loan-to-income ratio, which is less comprehensive.