mortgage

Table of Contents 2

Assessment Information 3

Assessment Instructions 5

Student Assessment Agreement 6

Assessment Task 1 Cover Sheet 7

Assessment Task 1: Written Questions 8

Assessment Task 1 Instructions 10

Assessment Task 1 Checklist 12

Assessment Task 2 Cover Sheet 13

Assessment Task 2: Complex broking needs project 14

Assessment Task 2 Instructions 16

Assessment Task 2 Checklist 20

The assessment tasks for FNSFMB512 Identify and develop credit options for clients with special financial circumstances are included in this Student Assessment Tasks booklet and outlined in the assessment plan below.

To be assessed as competent for this unit, you must complete all of the assessment tasks satisfactorily.

Assessment Plan

Assessment Preparation

Please read through this assessment thoroughly before beginning any tasks. Ask your assessor for clarification if you have any questions at all.

When you have read and understood this unit’s assessment tasks, print out the Student Assessment Agreement. Fill it out, sign it, and hand it to your assessor, who will countersign it and then keep it on file.

Keep a copy of all of your work, as the work submitted to your assessor will not be returned to you.

Assessment appeals

If you do not agree with an assessment decision, you can make an assessment appeal as per your RTO’s assessment appeals process.

You have the right to appeal the outcome of assessment decisions if they feel they have been dealt with unfairly or have other appropriate grounds for an appeal.

Naming electronic documents

It is important that you name the documents that you create for this Assessment Task in a logical manner.

Each should include:

Course identification code

Assessment Task number

Document title (if appropriate)

Student name

Date it was created

Additional Resources

You will be provided with the following resources before you begin Assessment Task 2.

· Client Information

· Complaint Handling Policy and Procedures

· Fees and Charges

· Code of Practice

· Completed Fact Find

· Construction Loans Report Template

· Client Options Report Template

Each assessment task in this booklet consists of the following:

Assessment Task Cover Sheet

This must be filled out, signed and submitted together with your assessment responses.

If you are submitting hardcopy, the Cover Sheet should be the first page of each task’s submission.

If you are submitting electronically, print out the cover sheet, fill it out and sign it, then scan this and submit the file.

The Assessment Task Cover Sheet will be returned to you with the outcome of the assessment, which will be satisfactory (S) or unsatisfactory (U). If your work has been assessed as being not satisfactory, your assessor will include written feedback in the Assessment Task Cover Sheet giving reasons why. Your assessor will also discuss this verbally with you and provide advice on re-assessment opportunities as per

your RTO’s re-assessment policy.

Depending on the task, this may include

resubmitting incorrect answers to questions (such as short answer questions and case studies)

resubmitting part or all of a project, depending on how the error impacts on the total outcome of the task

redoing a role play after being provided with appropriate feedback about your performance

being observed a second (or third time) undertaking any tasks/activities that were not satisfactorily completed the first time, after being provided with appropriate feedback.

Assessment Task Information

This gives you:

a summary of the assessment task

information on the resources to be used

submission requirements

re-submission opportunities if required

Assessment Task Instructions

These give questions to answer or tasks which are to be completed.

Your answers need to be typed up using software as indicated in the Assessment Task Instructions.

Copy and paste each task’s instructions into a new document and use this as the basis for your assessment task submission. Include this document’s header and footer.

If you are submitting electronically, give the document a file name that includes the unit identification number, the task number, your name and the date.

Checklist

This will be used by your assessor to mark your assessment. Read through this as part of your preparation before beginning the assessment task. It will give you a good idea of what your assessor will be looking for when marking your responses.

Make sure you read through the assessments in this booklet before you fill out and sign the agreement below.

If there is anything that you are unsure of, consult your assessor prior to signing this agreement.

Have you read the assessment requirements for this unit? Yes No

Do you understand the requirements of the assessments for this unit? Yes No

Do you agree to the way in which you are being assessed? Yes No

Do you have any specific needs that should be considered? Yes No

If so, explain these in the space below.

Do you understand your rights to re-assessment? Yes No

Do you understand your right to appeal the decisions made in an assessment? Yes No

Student Declaration

To be filled out and submitted with assessment responses

I declare that this task is all my own work and I have not cheated or plagiarised the work or colluded with any other student(s).

I understand that if I If I am found to have plagiarised, cheated or colluded, action will be taken against me according to the process explained to me.

I have correctly referenced all resources and reference texts throughout these assessment tasks.

Assessor declaration

I hereby certify that this student has been assessed by me and that the assessment has been carried out according to the required assessment procedures.

Feedback

Student result response

My performance in this assessment task has been discussed and explained to me.

I would like to appeal this assessment decision.

A copy of this page must be supplied to the office and kept in the student’s file with the evidence.

Task summary

This is an open book test, to be completed in the classroom.

A time limit of 2 hours to answer the questions is provided.

You need to answer all of the written questions correctly.

Your answers must be word processed and sent to the assessor as an email attachment. 

Required

Access to textbooks/other learning materials

Computer and Microsoft Office

Access to the internet

Timing

Your assessor will advise you of the due date of this assessment.

Submit

Answers to all questions

Assessment criteria

All questions must be answered correctly in order for you to be assessed as having completed the task satisfactorily.

Re-submission opportunities

You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task.

If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date.

You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.

You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.

Written answer question guidance

The following written questions use a range of “instructional words” such as “identify” or “explain”, which tell you how you should answer the question. Use the definitions below to assist you to provide the type of response expected.

Note that the following guidance is the minimum level of response required.

Analyse – when a question asks you to analyse something, you should do so in in detail, and identify important points and key features. Generally, you are expected to write a response one or two paragraphs long.

Compare – when a question asks you to compare something, you will need to show how two or more things are similar, ensuring that you also indicate the relevance of the consequences. Generally, you are expected to write a response one or two paragraphs long.

Contrast – when a question asks you to contrast something, you will need to show how two or more things are different, ensuring you indicate the relevance or the consequences. Generally, you are expected to write a response one or two paragraphs long.

Discuss – when a question asks you to discuss something, you are required to point out important issues or features and express some form of critical judgement. Generally, you are expected to write a response one or two paragraphs long.

Describe – when a question asks you to describe something, you should state the most noticeable qualities or features. Generally, you are expected to write a response two or three sentences long.

Evaluate – when a question asks you to evaluate something, you should do so putting forward arguments for and against something. Generally, you are expected to write a response one or two paragraphs long.

Examine – when a question asks you to examine something, this is similar to “analyse”, where you should provide a detailed response with key points and features and provide critical analysis. Generally, you are expected to write a response one or two paragraphs long.

Explain – when a question asks you to explain something, you should make clear how or why something happened or the way it is. Generally, you are expected to write a response two or three sentences long.

Identify – when a question asks you to identify something, this means that you are asked to briefly describe the required information. Generally, you are expected to write a response two or three sentences long.

List – when a question asks you to list something, this means that you are asked to briefly state information in a list format.

Outline – when a question asks you to outline something, this means giving only the main points, Generally, you are expected to write a response a few sentences long.

Summarise – when a question asks you to summarise something, this means (like “outline”) only giving the main points. Generally, you are expected to write a response a few sentences long.

Provide answers to all of the questions below:

1. Identify and explain the key features of construction loans.

2. What rights are given by The Native Title Act 1993 to Indigenous Australians who hold native title rights or who have made a native title claim?

3. Identify and explain the key features of heritage issues in mortgage broking.

4. Identify and explain the key features of loans for contaminated sites or properties near noxious industries

5. What are the key features of Schedule 1 of the National Consumer Credit Protection Act 2009?

6. What legislation gives ASIC power to approve the financial services sector’s codes of conduct?

7. Describe the key features of the Australian Bankers’ Association Code of Banking Practice.

8. Explain risk issues relevant to borrowing risk and gearing

9. Explain at least two economic risks relevant to a person taking out a mortgage.

10. Explain how volatility of income and capital affects mortgage risk.

11. What organisational guidelines and procedures are used to assess the impact of risks for lenders?

12. Identify three secured residential lending products and explain what they cover.

13. Identify four secured lending products and explain what they cover.

14. How would you gather information on new or non-standard products?

15. Explain three risk issues are inherent in a construction loan.

16. Explain three risk issues are inherent in a personal loan.

17. Explain three risk issues that are inherent in an investment property loan.

18. Explain what institutional risk is.

19. What are clients’ return expectations on an investment property? Give three risks are inherent in these expectations?

Student Declaration

To be filled out and submitted with assessment responses

I declare that this task is all my own work and I have not cheated or plagiarised the work or colluded with any other student(s).

I understand that if I If I am found to have plagiarised, cheated or colluded, action will be taken against me according to the process explained to me.

I have correctly referenced all resources and reference texts throughout these assessment tasks.

Assessor declaration

I hereby certify that this student has been assessed by me and that the assessment has been carried out according to the required assessment procedures.

Feedback

Student result response

My performance in this assessment task has been discussed and explained to me.

I would like to appeal this assessment decision.

A copy of this page must be supplied to the office and kept in the student’s file with the evidence.

Task summary

You are required to research and then write a report on construction loan options for two new clients. You will then meet the clients and discuss their situation and their options with them. Following the meeting, you are to research and document at least three construction loan options that would be appropriate for the clients’ needs.

This assessment is to be completed in the simulated work environment in the RTO.

Required

· Access to textbooks/other learning materials

· Computer with Microsoft Office and internet access

· Client Information

· Complaint Handling Policy and Procedures

· Fees and Charges

· Code of Practice

· Construction Loans Report Template

· Client Options Report Template

Timing

Your assessor will advise you of the due date of these submissions.

Submit

· Email with Construction Loans Report attached.

· Email explaining loan options with explanatory material attached

· Email with Client Options Report attached.

Assessment criteria

For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.

Re-submission opportunities

You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task.

If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date.

You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.

You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.

Carefully read the following:

You are working as a Mortgage Broker at Morgan Mortgages, and you have been assigned an appointment with two new clients, Jan and Mary Freeman. They are a couple with one two-year old child. One of them has received some money in an inheritance and they have decided to use this as a deposit to purchase some land and build an investment property on it.

They have found a block of land that they are interested in. It is on the market for $200,000, and they intend to build a house on it that would cost $150,000. They have a deposit of $180,000. They are interested in securing an interest-only loan for the land purchase and the house construction.

They were going to go to their bank, but a friend recommended Morgan Mortgages could find them a better deal than at their bank. They would like in to discuss the project with one of Morgan Mortgages’ brokers.

Complete the following activities:

1. Write a Construction Loans Report

You will use this report to inform your discussion with the client during your meeting.

Use the internet to research construction loans. Look at which lenders offer these loans, what conditions are placed on them.

Your report should include the following:

The legislation that covers construction loans

Complaint handling: summarise the complaint handling and dispute resolution procedures for your company and for the broking industry.

How construction stages and stages of builder payment works

What a fixed price building contract is and the reasons behind enforcing it

Which lenders offer construction loans.

The criteria under which lenders offer construction loans: Loan to Value Ratio, maximum loan amount, etc.

Risks and tolerance: what the risks involved with construction loans are, and in particular, what the interdependencies and implications are. You should also explain how these risks are mitigated by the construction loan’s special requirements. Summarise also the issue of tolerance with construction loans compared to other forms of loan.

Whether an accountant or other financial professional needs to be involved.

What other Financial Planning advice would be necessary to set up a construction loan in the case study situation.

Taxation. summarise the tax implications of positive and negative gearing.

Economics: summarise the business cycle and its impact on property prices and rents.

Insurance: explain lender insurance and the need for clients to revise their life insurance

Use the Construction Loans Report Template to guide your work.

1. Send an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

It should introduce the client meeting and summarise the contents of the attachments and ask for the place, date and time of a meeting with your clients.

Attach your construction loans report to the email.

22. Meet with the clients.

Review the following documents prior to the meeting:

Client Information

Complaint Handling Policy and Procedures

Fees and Charges

Mortgage and Finance Association of Australia’s Code of Practice

After introducing yourself, you are required to explain your company’s services, values and capacity as set out in the Morgan Mortgages’ Client Information.

You are then required to explain Morgan Mortgages’ complaint handling and dispute resolution procedures and the industry-wide standards that they adhere to.

Ensure that the clients understand the complaint handling procedures before moving on.

You are then required to explain the fees and charges that the clients will encounter and ensure that the clients understand these.

The next objective of the meeting is to discuss and clarify the special or complex features of the client’s situation. This will involve explaining the information in your construction loans report to the clients, as well as giving general information about construction loans as required.

It is important that the risk and tolerance issues that apply to their situation are discussed ethically so the clients can give their informed consent for you to proceed. Ensure that, when discussing risk with the client, that you are following all relevant legislative requirements and organisational guidelines and procedures.

During the meeting, you are required to demonstrate effective communication skills including:

Speaking clearly and concisely

Using non-verbal communication to assist with understanding

Asking questions to identify required information

Responding to questions as required

Using active listening techniques to confirm understanding

23. Research the best options for the client.

Review the client’s situation to determine the relevant opportunities and constraints.

Use the internet to research applicable loan structures or options. Your research should also include new or non-standard types of loans.

Ensure that any options you propose comply with relevant legislation and regulatory, as well as ethical guidelines. You should be able to describe how each successfully meets the client’s needs.

Model and prioritise the options that you have selected, comparing the features, fees and charges, and risks of each one, rejecting any inappropriate options.

24. Select client options

Select the three best construction loan broking options for review with the client.

For each of these, include a description of each option’s anticipated fees and charges.

Give also the monthly repayments that the client can expect to pay.

Consider any referrals that should be made to an accountant, a financial adviser or a lawyer for each broking solution that you suggest.

For each option selected, develop or obtain explanatory material that will make them clear and understandable to the clients.

Ensure that the broking recommendations and loan structures that you are preparing for the client follow the organisation’s guidelines and procedures.

Use the Client Options Report Template to guide your work.

25. Develop explanatory material.

The objective of this activity is to demonstrate that you can clarify complex financial information using terminology and concepts appropriate for the client.

For each option selected in the previous activity, develop explanatory material that will make the loan clear and understandable to the clients.

Create a new Word document for this activity and save it as Explanatory Material.

This document should have a page for each of your suggested loans. Use the internet to find information, promotional material, legal documents, etc. that would be appropriate for new investors such as your clients.

26. Send an email to the clients (your assessor).

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

The email text should:

Refer to the meeting that you had with the clients recently, summarising their current situation.

Summarise the options that you have selected for the client from your Client Options Report.

Give the anticipated fees and charges for each option

Include information on the internal and external complaints resolution procedures that apply to their situation.

Give the clients at least three risk management strategy recommendations.

Conclude the email with an invitation to discuss these options with you at a meeting in the near future.

Attach the Explanatory Material to the email.

27. Send an email to your assessor.

The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.

It should introduce the client meeting and summarise the contents of the attachments.