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Australia could follow US on pre-loan counselling

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Australian Broker | 17 Sep 2012, 09:00 AM Agree 0
The principle presented by compulsory pre-loan counselling for risky borrowers in the US could be adopted on a more voluntary level in Australia, claims a leading industry figure
  • Coast Broker | 17 Sep 2012, 09:59 AM Agree 0
    When does a loan applicant become responsible for his or her own ability to meet a commitment. What next making it compulsory for loan repayments to be made directly from someones pay.
  • Keith Bridges | 17 Sep 2012, 10:04 AM Agree 0
    What on face value this concept may have merit, requirements of NCCP say we as brokers must investigate potential borrowers' lifesytyle, cash flow, and discretionary spending etc, the list goes on, so lets add another meeting to the whole process. Absoulutely ridiculous
  • Casey | 17 Sep 2012, 10:15 AM Agree 0
    I dont use the program myself but I think you'll find that the whole premise of the education is exactly that. Putting the ownership of the decision to proceed back unto the borrower. Ignorance is difficult to us as an excuses when education is required before signing on the dotted line.
  • Kym dalton | 17 Sep 2012, 10:28 AM Agree 0
    Yes Casey that is the point. Amongst other things, right now industry is not fully protected against "convenient ignorance" or indeed "predatory borrowing". The scope of the NCCP is wide and still evolving. Industry needs to push back on the responsibility shift and CreditED assists in doing this
  • Ray - Perth | 17 Sep 2012, 10:33 AM Agree 0
    This is totally not necessary. The NCCP and "Responsible Lending" provisions already cover this whole aspect of consumer lending.
  • BJ | 17 Sep 2012, 10:53 AM Agree 0
    The view is self-serving.
    Read Home Equity Protection Act “HEP” the Act (if you need to put yourself to sleep) and you will find that what is being suggested for the Australian market is half baked and highly selective in interpretation of the Act.
    I simply love reading this forum particularly when few of the industry commentators have little if any international experience in such matters.
    The HEP Act is far reaching and to simply suggest that it applies to certain classes of borrower is simply wrong.
    The HEP Act is complex with regard to fees levied at a Federal and state level. Each state applies the HEP Act quite differently as a result of jurisdictional law and rights. The Act encompasses real estate fees, bank fees, and disclosure issues.
    The suggestion that borrowers undertake some level of counselling and training to get them clear on what happens if the default is simply stretching the force of the Act.
    No amount of counselling and training will protect people from making poor decisions. You simply cannot regulate against greed and stupidity.
  • Robert Kaya | 17 Sep 2012, 01:02 PM Agree 0
    I think NCCP put enough onus on professional brokers to quantify the clients'capacities and hence pre-counselling would just be confusing for the borrowers.
  • Broker | 17 Sep 2012, 05:36 PM Agree 0
    Great news, as I have been looking for somewhere to take my nanny for a day!
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