The Commonwealth Bank cracks down on home lending measures during coronavirus pandemic
The nation’s largest lender, the Commonwealth Bank, is toughening up its lending practices for customers who want to sign up to a new home loan during the COVID-19 pandemic.
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The nation’s biggest bank is toughening up its lending practices to ensure customers signing up to new loans can comfortably meet their repayments.
The Commonwealth Bank today revealed it would be asking customers several additional questions during the COVID-19 pandemic to ensure they could stamp out any issues around their inability to service loans.
The new home loan lending policy for both owner occupier and investment loans now requires the bank and/or mortgage brokers to ask borrowers for the following information:
• At this point in time are you aware of any changes to your broader situation that may impact your earning capacity?
• They may also ask customers for additional information from their employer to show the income situation or BAS (Business Activity Statements) for self-employed customers.
The new changes are implemented from today and will be reviewed in 90 days.
The bank’s group executive of retail banking services Angus Sullivan said in an issued statement the bank remained committed to helping Australians buy property.
“As Australia’s largest home-loan lender, our Australian-based call centres and processing remain open for business to help our customers with their home buying needs during this uncertain time,” he said.
“We continue to support our new and existing home loan customers, and these changes ensure we have all the required information to continue to support our customers financial wellbeing.”
However he highlighted the bank would still help any customers who had purchased a property recently to go ahead as planned, despite the COVID-19 pandemic.
Hundreds of thousands of Australians have sought help from their lenders for a mortgage deferral which allows customers to have a break from their repayments and interest charges for up to six months.
Finsure managing director John Kolenda, who manages companies including 1300HomeLoan, said it was good banks were being cautious during this tough time.
“They have an obligation to take prudent measures to make sure they are evaluating a correct position of the customer and they are not going to put them into any hardship in the future,” he said.
“Under the current circumstances it’s relevant to ask broader questions of consumers to make sure they are going to be OK.
“I would imagine a lot of banks would be following suit, these are extraordinary times and you want to make sure you are evaluate someone’s position effectively.”