The Commonwealth Bank of Australia (CBA) has announced several changes to its home loan lending policies as well a new assessment document for brokers.
In a note released to brokers today (28 November), the bank introduced the Credit Assessment Summary (CAS) which will be used for all home loan and line of credit applications involving personal borrowers.
The CAS will present a summary of information provided on behalf of the borrower or which the bank has verified, including:
- A summary of loan requirements and objectives
- Personal details and financial information
- Total monthly living expenses at a household level
- Information about the credit applied for
“These changes further strengthen our responsible lending commitments related to the capture and documentation of customer information,” CBA said.
The document will come into effect from 2 December and will form part of the loan offer documents pack for owner occupied and investment home loan or line of credit applications.
CBA has also introduced new credit policy changes, coming into effect on 4 December. These will include:
- Reducing the maximum LVR without LMI from 80% to 70% for selected securities in particular postcodes
- Reducing the amount of rental income and negative gearing eligible for servicing
- Changing eligibility for LMI waivers including all professional packages and LMI offers for customers financing security types in some postcodes
A new Postcode Lookup Tool will be introduced on 4 December to provide brokers with added details on lending policies in certain areas.
“You should use this tool during your customer discussions to understand policies that may apply to postcodes in which they have expressed a home lending need. If policies apply, you should discuss these with your customers,” the broker note said.
Finally, CBA has also made changes to its consumer lending credit policy with brokers having to consider the following when completing any loan applications:
- Verification of all liabilities and commitments held with other financial institutions
- Verification of the bank’s expanded requirements for liabilities and commitments
- Amended requirements for acceptable rental income verification
- Removal of fully maintain company motor vehicle income type
- Introduction of a notional monthly rental commitment for those living rent-free
- Removal of charge cards as a liability for servicing