“ASIC's report recommends eight ways for licensees to reduce their risk of non-compliance and outlines a number of instances of good practice which, if adopted, will help licensees meet their obligations.”
Kell says the review found a ‘marked’ reduction in mortgage brokers suggesting and assisting borrowers to apply for low doc loans, coinciding with the commencement of responsible lending laws. The volume of credit assistance for home loans promoted as low doc in the three months after January 1, 2011 – when the responsible lending obligations commenced for most home loan lenders – was nearly half that of the three months before.
ASIC is currently reviewing how credit providers are complying with responsible lending obligations when providing home loans promoted as low doc. A report is expected later this year.