NZQA Expiring unit standard
26286 version 2
Page 1 of 5
Title
Demonstrate knowledge of the mortgage industry, lending principles,
home loan products and apply the application process
Level
4
Credits
5
Purpose
People credited with this unit standard are able to:
–
demonstrate knowledge of the mortgage industry in New
Zealand;
–
demonstrate knowledge of lending principles;
–
demonstrate knowledge of home loan products and
borrowers; and
–
apply knowledge of the mortgage application process.
Classification
Financial Services > Mortgage Broking
Available grade
Achieved
Explanatory notes
1
Assessment against this unit standard may be on job, off job in a simulated work
environment, or a combination of these within the financial services industry context.
2
References
Commerce Act 1986;
Companies Act 1993;
Consumer Guarantees Act 1993;
Credit Contracts and Consumer Finance Act 2003;
Electronic Transactions Act 2002;
Fair Trading Act 1986;
Financial Advisers Act 2008;
Financial Reporting Act 1993;
Financial Service Providers (Registration and Dispute Resolution) Act 2008;
Financial Transactions Reporting Act 1996;
Health and Safety in Employment Act 1992;
Human Rights Act 1993;
Income Tax Act 2007;
KiwiSaver Act 2006;
Land Transfer Act 1952;
New Zealand Bill of Rights Act 1990;
NZ IFRS (New Zealand Equivalent to International Financial Reporting Standards)
available from http://www.nzica.com;
Privacy Act 1993;
Property Law Act 2007;
Property (Relationships) Act 1976;
Residential Tenancies Act 1986;
Secret Commissions Act 1910;
The Skills Organisation
SSB Code 100401
 New Zealand Qualifications Authority 2016
NZQA Expiring unit standard
26286 version 2
Page 2 of 5
Securities Act 1978;
Securities Markets Act 1988;
Trustee Act 1956;
Trustee Amendment Act 1988;
industry codes of practice;
and all subsequent amendments and replacements.
3
All activities must comply with any policies, procedures, and requirements of the
organisations involved; the standards of relevant professional bodies including codes
of ethics; and any relevant legislative and/or regulatory requirements.
4
This unit standard does not cover repackaging of residential property loan products
for investment purposes. There are two unit standards which deal with investment;
Unit 25648, Demonstrate understanding of investment concepts used by financial
advisers and Unit 25649, Apply principles of investment advice.
5
Definitions
Application form – mortgage application form such as the New Zealand Mortgage
Brokers Association form or other equivalent form, which includes but is not limited to
the following elements – key dates, borrower details, application summary, adviser
contact details, personal and employment details of applicant, funding details, loan
type and structure, bank account details, proposed monthly income and expenditure,
statement of assets and liabilities, security, and client acknowledgement of Personal
Disclosure Statement.
Credit history – record of how a person has borrowed and repaid debt.
DSR – Debt servicing ratio.
Financial history – incorporates variables such as a client's savings and repayment
record and credit history.
LAQC – loss attributing qualifying company.
LVR – loan to value ratio.
OCR – official cash rate.
Situation relevant to mortgage broking – situation containing the elements of duty of
care, contract, and negligence, where the facts may be provided for assessment
purposes.
UMI – uncommitted monthly income.
Outcomes and evidence requirements
Outcome 1
Demonstrate knowledge of the mortgage industry in New Zealand.
Evidence requirements
1.1
Industry participant roles are explained in terms of their responsibilities in the
mortgage industry.
Range
The Skills Organisation
SSB Code 100401
industry participants include but are not limited to – aggregator,
franchisor, licensor, mortgage manager, lender, solicitor,
registered valuer, fire and general insurer, lender mortgage
insurer, risk insurer, mortgage adviser, property manager, real
estate agent, conveyancer, accountant.
 New Zealand Qualifications Authority 2016
NZQA Expiring unit standard
26286 version 2
Page 3 of 5
1.2
Elements of duty of care, contract, and negligence are explained and applied to
a situation relevant to mortgage broking.
1.3
Legislation is explained in terms of the elements relevant to mortgage broking.
1.4
Roles of the Reserve Bank, fiscal policy, and the OCR are described in terms of
effects on mortgage broking.
Outcome 2
Demonstrate knowledge of lending principles.
Evidence requirements
2.1
Purpose is explained in terms of mortgage lending and application to mortgage
situations.
Range
2.2
Character is explained in terms of mortgage lending and application to
mortgage situations.
Range
2.3
includes but is not limited to – UMI, DSR, frequency and type of
repayments, potential contingencies.
Security, types of security and property tenure are explained in terms of
mortgage lending and application to mortgage situations.
Range
2.5
includes but is not limited to – financial history, employment
history, residential history, personal attributes.
Servicing is explained in terms of mortgage lending and application to mortgage
situations.
Range
2.4
includes but is not limited to – description of funds required,
reason for loan requirement, validity of loan for lender.
explanation of security includes but is not limited to – purpose,
value, effects on value from external factors (e.g. zoning).
types of security and property tenure include but are not limited to
– freehold, leasehold, Māori leasehold, strata, cross lease,
company share, unit title.
Equity is explained in terms of mortgage lending and application to mortgage
situations.
Range
includes but is not limited to – deposit, assets, net statement of
position, LVR.
Outcome 3
Demonstrate knowledge of home loan products and borrowers.
The Skills Organisation
SSB Code 100401
 New Zealand Qualifications Authority 2016
NZQA Expiring unit standard
26286 version 2
Page 4 of 5
Evidence requirements
3.1
Home loan types are explained in terms of their repayment structure.
Range
3.2
Home loan terminology is explained in terms of benefits and limitations.
Range
3.3
includes but is not limited to – fixed, floating, capped, loan term
length, early repayment, bridging loan, construction loan,
repayment holiday, loan insurance.
Legal entities of borrowers are explained in relation to home loan products.
Range
3.4
includes but is not limited to – table loan, reducing loan, interest
only, line of credit, revolving credit, equity release.
individual, Limited Liability Company, company with LAQC status,
family trust, trading trust.
Borrower default guarantees are explained in terms of lender needs and
responsibilities of guarantors.
Range
role of borrowers, role of guarantors, priority amount, cross
guarantees.
Outcome 4
Apply knowledge of the mortgage application process.
Evidence requirements
4.1
Mortgage application process is applied and documents are produced, in
accordance with industry requirements.
Range
4.2
includes – cover sheet and diary note, application form, authority
and declaration, proof of income, proof of identity, finance date,
settlement date, solicitor detail, Adviser Personal Disclosure
Statement;
may also include but is not limited to – financial history, registered
valuation, sale and purchase agreement, building contract, trust
deed, certificate of incorporation, proof of residency, rental
agreement.
Calculations are performed for the mortgage application process.
Range
includes but is not limited to – LVR, DSR, UMI, statement of
position, settlement position.
This unit standard is expiring. Assessment against the standard must take place by
the last date for assessment set out below.
The Skills Organisation
SSB Code 100401
 New Zealand Qualifications Authority 2016
NZQA Expiring unit standard
26286 version 2
Page 5 of 5
Status information and last date for assessment for superseded versions
Process
Version Date
Last Date for Assessment
Registration
1
12 February 2010
31 December 2017
Review
2
19 February 2015
31 December 2017
Consent and Moderation Requirements (CMR) reference
0003
This CMR can be accessed at http://www.nzqa.govt.nz/framework/search/index.do.
Please note
Providers must be granted consent to assess against standards (accredited) by NZQA,
before they can report credits from assessment against unit standards or deliver courses
of study leading to that assessment.
Industry Training Organisations must be granted consent to assess against standards by
NZQA before they can register credits from assessment against unit standards.
Providers and Industry Training Organisations, which have been granted consent and
which are assessing against unit standards must engage with the moderation system that
applies to those standards.
Requirements for consent to assess and an outline of the moderation system that applies
to this standard are outlined in the Consent and Moderation Requirements (CMR). The
CMR also includes useful information about special requirements for organisations wishing
to develop education and training programmes, such as minimum qualifications for tutors
and assessors, and special resource requirements.
The Skills Organisation
SSB Code 100401
 New Zealand Qualifications Authority 2016