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  • Perry
    replied
    Well, nothing is arbitrarily final.
    I suppose a PPOR mortgage is a bit of both.
    At least you were told. I was not and learned much later; to my cost.

    Leave a comment:


  • brokerman
    replied
    Originally posted by Perry View Post
    That was only a guess. As I once explained to a neighbour, there is a difference between bad debt and good debt. Debt that earns money is good; debt that doesn't is bad. A concept they'd never considered before.
    My parents drummed that into me early on, didn't listen of course, until over 30

    Leave a comment:


  • Perry
    replied
    That was only a guess. As I once explained to a neighbour, there is a difference between bad debt and good debt. Debt that earns money is good; debt that doesn't is bad. A concept they'd never considered before.

    Leave a comment:


  • brokerman
    replied
    Originally posted by Perry View Post
    It may be a franchise payment.
    Indeed it may be....thanks!

    Leave a comment:


  • Perry
    replied
    It may be a franchise payment.

    Leave a comment:


  • brokerman
    replied
    A lot of alternative lenders now won't do consumer loans. They will only lend to those buying or refinancing a rental or, if it's an owner occupied property it would have to be in a Trust or similar.

    As an aside, an application came in yesterday and looking at the bank statements they are paying around $3000 a Month for Farmville, never heard of it however that's $50k pa earned income, oh and they wanted 90%. Next!

    Leave a comment:


  • donna
    replied
    Thank you. Most of it is good for the personal loans and ‘shop truck’ crap. Hopefully the new rules nail some of those shoddy operators.

    Mortgages is different though and seems to be lumped in with the credit cards, personal loans etc which doesn’t really seem right.

    With the big loophole being alternative lenders for all these loans - maybe it will be business as normal.

    So why don’t all lenders have to comply with the legislation?

    Cheers

    Donna

    Leave a comment:


  • brokerman
    replied
    Hi Donna

    Bit of a long reply....borrowers will find the daily flat white will actually affect their borrowing, nanny state at it's worst. BNPL is just plain bad and heaven forbid if you like a regular flutter on lotto.

    Our business is based on alternative lending and I can only see that market growing as the banks decline more and more.

    Why has it changed, good questions and I refer to the above phrase 'nanny state'. There is no evidence, nor has there ever been, of so called reckless lending in NZ.

    The people I feel so sorry for are first home buyers, October 1st will be a game changer for many.

    Now the long bit

    CCCFA changes: What advisers need to know

    Changes to the Credit Contracts and Consumer Finance Act are set to impact borrowers from October 1. Here's what the amended lending rules will mean for clients.

    The CCCFA is set to undergo a series of changes governing consumer lenders and the directors of those companies.
    New rules on borrower suitability and affordability will hit brokers and their clients directly, and are expected to make lenders adopt stricter affordability criteria.
    From October, lenders will be under a more prescriptive regulatory regime, and will be required to place more scrutiny than ever on borrower affordability.
    The regulations will establish an express list of enquiries to establish that a loan is suitable for a borrower.
    They will also establish requirements for lenders to estimate borrowers' income and expenses, and verify expenses, to ensure borrowers can afford repayments.
    The rules will force borrowers to provide more granular details and evidence around their spending as they apply for loans.
    According to Kate Lane, a partner at MinterEllisonRuddWatts, the CCCFA changes will "set a base line as to what analysis lenders must do in relation to suitability and affordability".
    She adds: "As the regulations basically take a one-size-fits-all approach, potential borrowers who are non-standard might find that they fall in the too-hard basket for some lenders given the detailed verification work required on income and expense information."
    Lane says the regulation will prescribe that expense information is verified against reliable evidence, a process likely to be "very time consuming".
    Lenders have already begun to adjust their processes, and the effect of the incoming CCCFA changes have been felt in the mortgage market.
    According to independent economist Tony Alexander's latest market report, banks have begun to pay more attention to the short-term debt of borrowers, particularly first home buyers.
    Alexander said lenders were monitoring debt and purchases on pay-later services such as Afterpay.
    "There is a general tightening of criteria as banks get ready for the new Credit Contracts and Consumer Finance Act (CCCFA) changes," he said. "This legislation requires lenders to be certain the borrower fully understands what they are signing up to."

    Leave a comment:


  • donna
    replied
    Hi Brokerman,

    I have a few questions....

    1. What's changed for borrowers?
    2. What's changed for mortgage brokers - like you?
    3. Why has the CCCFA changed?

    Agree with your sentiment re. BNPL - it is catching out consumers and missing payments may damage their credit rating etc.

    cheers,

    Donna

    Leave a comment:


  • brokerman
    replied
    https://www.consumerprotection.govt....r-finance-act/

    Leave a comment:


  • Perry
    replied
    CCCFA means what? And where are these nightmare regs to be found?

    Leave a comment:


  • brokerman
    started a topic New CCCFA regulations

    New CCCFA regulations

    Just read through them and lost the will to live. I pity borrowers who don't tick all the boxes and please please stay away from 'buy now pay later' providers. It's hard enough already for first home buyers, these don't make it any easier.
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