Resimac seeks to avoid “nit picking” under CCCFA

The move follows repeated criticism of loan applicants having to reveal the minutiae of their spending, under new legislation.

The law in question is the much-reviled Credit Contracts and Consumer Finance Act (CCCFA).

This was supposed to rein in rogue lenders but ended up binding borrowers and lenders in red tape. It has also led to lengthy delays.

Resimac wants to speed up this programme with a benchmarking system, which uses technology to decide the likelihood of a customer suffering a default.

This will short circuit the “currently cumbersome process of checking past expenses to determine serviceability.”

The system will be available to mortgage applicants who came via an approved adviser or broker and have a strong debt servicing ratio.

They will be available for Prime Mortgage applicants who meet the so-called Full Doc system. This is an adaptation of an American method of assessing loan applicants and involves disclosure of a lot of financial records.

Resimac says these applicants are usually the most reliable customers in terms of timely repayment, and are thus the least likely to default.

“For those with a strong debt servicing position, nit-picking over how many coffees they have per week or pulling them up for having too many Cab Savs over Christmas is not a position we’re interested in taking, “ said Luke Jackson, general manager at Resimac.

“Our priority is to comply with the new regulations without adding unnecessary hurdles for our customers.”