“What the hell are they thinking?” a broker recently asked Insider – a sentiment he later shared after hearing the full story of one particular loan scenario. Which goes something a little like this: An 88-year old widower who owns his principal home outright wanted to borrow some money via a reverse mortgage to make repairs to his home, which was damaged in the recent Brisbane storms. This was clearly outlined in the application notes in the submission for a reverse mortgage of $20,000. Now comes the interesting part.
Assessor: The valuation has been returned and the valuer commented that the property has storm damage.
Broker: Do you think? Did you read the file notes and understand what the purpose of the loan was for?
Assessor: LVR is now 12% please advise how to proceed.
Broker: What are you, thick? 12% LVR please proceed.
Assessor: Please advise for NCCP if there are any likely changes to the borrower’s financial circumstance in the future?
Broker: What do you think, the applicant is 88 years old, he might die soon, do you think that will be a change to his financial circumstances?
Let’s remember of course that the application was for a reverse mortgage, with no servicing required and no loan repayments on the product. As the broker asked Insider, it makes one wonder just what those assessors are thinking.