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Low docs: facing extinction?

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Australian Broker | 10 Oct 2012, 06:00 AM Agree 0
A brokerage claims low doc loans, as they exist now, are a dying breed due to banks tightening their lending policies
  • BDM | 10 Oct 2012, 10:33 AM Agree 0
    I do not see a problem with getting this information, the lo-doc loan originaly came into existence to enable clints who had not completed thier tax returns to get a loan. They were never for the clint who's tax return did not support serviceability. The requirements were relaxed pre GFC but i think we now have a new 'norm'.
  • ozboy | 10 Oct 2012, 10:52 AM Agree 0
    Surely these loans should be renamed, you need as much if not more information to settle one of these loans.
  • sidbroker | 10 Oct 2012, 10:56 AM Agree 0
    NCCP is the issue and needs to face Extinction.
  • PeterT | 10 Oct 2012, 11:15 AM Agree 0
    There's certainly a place for lo doc loans. In the past they were often utilised as the loan when servicing was not evident, but the SE client insisted that they could afford it anyway. Essentially these borrowers were tax cheats or people making pie in the sky predictions.
    Seriously, what sort of small business that's doing the right thing can't provide 3 months of trading statements? There is a place for the current lo doc, but borrowers need to run their businesses in a sustainable manner to qualify.
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