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

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Australian National Institute Of Business And Technology *

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123A

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Accounting

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Apr 3, 2024

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FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Page | 1 of7 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022 Case Study (Tom Smith) Scenario Instructions

FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Page | 2 of7 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022 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.

FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Page | 3 of7 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022 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.

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FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Page | 4 of7 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022 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? - 3 months bank account statement for all savings and transaction account - Superannuation statement - Details of all ongoing monthly expenses - Proof of contract of sale of the property purchasing - Proof of deposit by providing bank statement - Credit card statement if client has credit card.

FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Page | 5 of7 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022 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). We would focus on below information to ensure accuracy and sufficiency of this evidence. -ID number -First name and last name -Residential address -Expiry date of documents -ID issuing authority -Issue date of documents Please note Passport Date of issue is missing and Payslip tax portion missing therefore hard to determine net pay.

FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Page | 6 of7 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022 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

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FNSCRD401 - Assess credit applications (Release 1) (Case Study – Tom Smith) Page | 7 of7 © Real Estate Academy Australia RTO 32436 Version 1.1 - January 2022 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?) Based on risk rating matrix, we are in position to approve application as risk ratings are Low for the application. Question 5 What security to back up the home loan is ABC Bank likely to request to proceed with this application? ABC bank likely to proceed with application of the home loan backed by property.