REAA - FNSCRD401 - Case Study (Tom Smith) v1.1

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Deakin University *

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FNS40821

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Accounting

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Jan 9, 2024

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FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Case Study (Tom Smith) Scenario Instructions Page | 1 of8 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022
FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) What you need to do: Answer the questions below by writing in the space provided. You are required to answer all questions correctly. If correct, you will see ‘Satisfactory’ or if incorrect you will see ‘Not Satisfactory’ in your grades section of your learner portal next to the assessment name. The assessor will provide feedback and a Record of Results in the assessment task once graded. You will be required to resubmit your work for any ‘Not Satisfactory’ assessment tasks. What you will need: Use the learner material provided in your online student portal as well as research materials such as books, internet, magazines, workplace documentation etc. to assist you in gaining the knowledge required to answer the questions. Remember that the assessment is completely self-paced and open book, so you are able to use whatever resources you have to answer the questions. What you need to submit: Your answers to these questions. How to Submit your Assessment: Upload your completed document into the “FNSCRD401 - Case Study (Tom Smith) assessment task [1]” in your learner portal. You can drag and drop the file into the window or use the add file icon in the top left of the submission window and select the file you wish to upload by using the browse/choose file option. Click on finish attempt to submit it for grading. Page | 2 of8 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022
FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) You are a credit officer working for ABC Bank and have been assigned a credit application for the client Tom Smith received from REAA Finance & Mortgage Broking Team. Review the completed application form and the supporting documents provided in the learner portal and then answer the questions that follow. Page | 3 of8 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022
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FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Question 1 Verify the information and documentation provided by the mortgage broker. According to Westpac Supporting Documentation Checklist , is there any missing supporting documentation that you should require the mortgage broker to provide you with? I should require these documents from mortgage broker: most recent month statement for car loan, 3 months of bank statements, superannuation statements, and 2 most recent payslips being no older than 1 month, the 2 payslips I received are in June and July, the loan application date is 6/11/2021, payslips are not most recent document. Page | 4 of8 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022
FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Question 2 Analyse the information provided, are you comfortable with the accuracy and sufficiency of evidence supplied to support the credit application? (Focus on the Identity Documents and the payslips and highlight what information you would focus on the ensure accuracy and sufficiency of this evidence). According to the documents I receive from mortgage broker, I have customer’s driver license, 2 pay slips, credit report, loan application form, I am not very comfortable with accuracy and sufficiency of evidence supplied to support the credit application, depends on Westpac documentation checklist, I still need customer’s most recent month statement for car loan, 3 months of bank statements, superannuation statements. And also, the application date is 06/11/2021, we need the most recent 2 payslips being no older than 1 month, the payslips what customer provided are a few months ago, (pay period 16/6/21-15/7/21, pay dates were 30/6/21 and 15/7/21). Page | 5 of8 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022
FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Question 3 Now that you have verified and analysed Tom’s application form and supporting documents, you are to rate the credit risk of this submission using the ABC Bank risk rating scale. For each of the four criteria (age, employment, security, and credit score) you are to determine the level of risk associated with the criteria. For Credit Rating ABC bank allows: 1 point for each "Low" 2 point for each "Moderate" 3 points for each "High" 4 points for each "Extreme" Complete the Risk Rating table for Smith according to ABC Bank policy and procedures below; Risk Rating Point (s) allocated: Age Low 1 Employment Low 1 Security Low 1 Credit Score Low 1 Page | 6 of8 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022
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FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Question 4 According to the risk rating matrix below, are you in a position to provide a decision for this application? (If yes, what would it be, if not, what should you do?) Yes, I would provide a decision for this application. According to the risk rating matrix, Tom Smith risk rating point is 4, it is low risk, he is 21 years old, he has a full-time PABY job, credit score is 998, these all show Tom Smith risk is low, for above reason, I would say yes for his loan application. Question 5 What security to back up the home loan is ABC Bank likely to request to proceed with this application? Guarantor, deposit, vehicle, other assets. Page | 7 of8 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022
FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Page | 8 of8 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022