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Have you all seen this??? Look what is not allowed! Go into the link for more......it’s an
on line brochure: Must Read for Aussie victims for Sup Prime Toxic Loans. Shocking
documents you were never supposed to see.
http://www.genworth.com.au/downloads/4-2-3-Spotlight/spotlight-series-low-doc.pdf
Australian Prime Low-Doc Loan Compared to US Alt-A Loan
Spotlight Series
ISSUE 3
Introduction of the low-doc loan has created a unique opportunity for mortgage lenders and the self-employed borrower. Introduced to Australia in 1999, low-doc loans revolutionised mortgage lending for a key sector of the market. Today, low-doc loans open opportunities for lenders to tap into a previously overlooked category of borrower. For self-employed workers and contractors, the introduction of low-doc loans helped many make the dream of home ownership a reality. Low-docs vary from mainstream mortgage products only in that the borrower self-certifies their income. This self-certification is needed because the borrower does not have the up-to-date financial information required to obtain a fully documented loan at the time they wish to borrow the funds. Other than the method to confirm income details, these loans are similar to a traditional home loan in terms of features and repayment options. Low-doc loans service many needs, including owner-occupied or investment property requirements, home improvement, refinancing and debt consolidation. “Rather than showing proof of income, as in a fully documented loan, a low-doc borrower self-certifies their income, which means they certify their income on which a serviceability assessment is then undertaken. This ensures that the stated income is sufficient to meet the proposed mortgage commitments.”
“The recent coverage of problems arising from the US sub-prime lending situation has been intense. The magnitude of the US situation begs the question, how could this have happened?”
US Alt-A Loan
LVR 95%
All including salaried
Prior Credit Defaults ✓
Negative Amortisation ✓
Teaser Rates ✓
Australian Prime Low-Doc Loan
Type of Borrower Self-Employed
LVR 80%
Prior Credit Defaults Not Allowed
Negative Amortisation Not Allowed
Teaser Rates Not Allowed
Low-docs in numbers
54 – average LVR percentage for low-doc loans, compared to the 67 per cent for traditional loans
385 – number of different low-doc loans offered by banks, credit unions, building societies and non-bank lenders to Australian borrowers
80 – maximum LVR on a low-doc loan Genworth is willing to insure
98 – the approximate percentage of low-doc loans on Genworth’s books where the principal person is a self-employed borrower
82 – percentage of jobseekers that told online recruitment website SEEK that they are interested in owning their own business at some stage in their career, highlighting the market potential for low-docs
30 – maximum loan term for a low-doc loan insured by Genworth
8 – the number of years Genworth has been insuring low-doc loans