12 Jul 2022

Finance and Mortgage Brokers have the Power

Vicki Philipoff Settlements is delighted that Finance and Mortgage Brokers have been recognised by REIWA and the Law Society jointly with regard to finance applications on an Offer to purchase a property in Western Australia.

The new 2022 General Conditions stipulate that a mortgage broker is now defined as a holder of an Australian credit licence pursuant to section 35 of the National Consumer Credit Protection Act 2009 (Cth) or a credit representative pursuant to section 64 or 65 of the same Act. The contract has been amended to allow a mortgage broker, in addition to a lender, to issue an approval notice or non-approval notice as the case may be.

The definition of non-approval notice has also been expanded so that in the case of a mortgage broker, as long as the broker makes proper enquiries and conducts an assessment under the act of the suitability of the buyer to obtain appropriate finance, that will be enough to constitute an application and allow a non-approval notice to be issued.

Previous to this new ruling, there was a Supreme court decision, that a buyer had to make a loan application to an actual lender itself even though the Finance Broker knew the loan application was likely to be rejected.  If an application was not made to an actual lender capable of advancing funds, the buyer was unable to state that they complied with the contract, and pursuant to the terms the contract itself, could then not rely upon any subsequent finance decline.

This is great news for everyone in the industry.

Please contact us if we can assist you.