MORTGAGE FINANCE

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• MORTGAGE FINANCE
• Industry Unit Standards
• Project deliverable Report 2.2
• Contents
• Unit standards scope findings
• Unit standards titles and specific outcomes
• Unit standards linked to a skills hierarchy for
  Mortgage Finance

Rachel Rozentals-Thresher rrt_at_mweb.co.za 083-268-6
607
9 July 2002
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Findings from original scope exercise
This table represents the knowledge and skills
gaps identified in the original scope exercise.
The scope details were reviewed and accepted by
the banks prior to the drafting of the standards.
The draft unit standard number meeting the
identified gap is presented for easy reference.
On the next page the unit standards are also
arranged in a basic skills hierarchy which
illustrates the relationship between the existing
and the new draft unit standards.
Conveyancing and Registration
Product Options and Parameters
Client Service
General Mortgage Finance Knowledge and
Understanding
Credit

• This is specific to the Banks
• Calculation of interest, repayments and repayment
  terms
• Applicable unit standards US 7 9

• Parties and their roles
• Terms
• Jargon
• Process
• Timing
• Fees
• Documents
• Applicable unit standard US 5

• Credit Assessment
• Assessment of affordability of loan
• Analysis of supporting security
• Suitability of property
• Applicable unit standards US 3, 4, 7, 10, 11 12

Financial considerations/ implications relevant
to Banking

• Additional gaps identified during the drafting
  phase
• Guide client through application US 8
• Guide client regarding Mortgage Finance options
  US 7
• Guide client regarding affordability US 9

Legal Considerations relevant in Banking
Buyers perspective
Banks perspective
Buyers perspective
Banks perspective
Buying and Selling Property Building Bonding Re
payment Default Repossession Reselling and
Refinancing
1,2 7 4 - 4,6
1,2 7 4 - 4,6
9 7 9 9 6
9 7 9 9 6
Only relevant to properties in possession
Only relevant to properties in possession
Only relevant to properties in possession
Only relevant to properties in possession
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Draft Unit Standards (under review for Mortgage
Finance)
Unit standard Title Level Credits Specific Outcomes
1.Demonstrate knowledge and understanding of property concepts associated with mortgage finance 4 6 SO1 Explain general terms associated with property finance SO2 Understand requirement for mortgageable residential property SO3 Understand key finance elements in property development schemes SO3 Understand requirements for the legal sale of property
2.Demonstrate knowledge and understanding of ownership of property relevant to mortgage finance 4 4 SO1 Understand terms related to ownership of immoveable property SO2 Explain legal requirements for ownership SO3 Explain legal requirements for transfer of ownership SO4 Evaluate different ownership options available to a purchaser
3. Demonstrate knowledge and understanding of the basic requirements of security for finance 4 6 SO1 Demonstrate understanding of principles of good security SO2 Demonstrate understanding of requirements for legally binding security SO3 Demonstrate understanding of contractual capacity of individuals SO4 Demonstrate understanding of contractual capacity of no-individuals
4. Demonstrate knowledge and understanding of a mortgage bond as a form of security 4 6 SO1 Define a mortgage bond SO2 Evaluate a mortgage bond over immoveable property as security SO3 Evaluate different types of property ito good security SO4 Demonstrate understanding of securities in mortgage finance
5. Demonstrate knowledge and understanding of the bond registration process 4 6 SO1 Demonstrate understanding of the overall registration process SO2 Explain role of attorneys in the registration process SO3 Explain role of deeds office in the registration process SO4 Explain role of financier/bank in the registration process
6. Evaluate the impact of changes to details after registration 4 14 SO1 Evaluate impact of changes to the individual borrower SO2 Evaluate impact of changes to non-individual borrower SO3 Evaluate impact of changes to the property SO4 Evaluate impact of changes to the mortgage loan SO5 Evaluate impact of default on the mortgage loan
7.Advise a borrower of mortgage finance options 4 10 SO1 Demonstrate understanding of terms and concepts associated with mortgage finance SO2 Explain general requirements for a standard loan SO3 Explain requirements for a building loan SO4 Match a borrowers need with a specific mortgage finance solution
8. Guide a borrower through application for a mortgage loan 4 6 SO1 Explain how to apply for a mortgage loan SO2 Explain requirements for granting a loan SO3 Explain the registration of a mortgage bond SO4 Explain the commencement of the loan
9. Advise a borrower concerning affordability of mortgage finance 4 10 SO1 Determine finance costs SO2 Determine bond registration costs SO3 Demonstrate financial implications of different repayment options SO4 Discuss affordability
10. Assess the financial position of an applicant for mortgage finance 4 15 SO1 Determine a borrowers risk profile SO2 Determine a borrowers financial position SO3 Determine a borrowers ability to afford the finance SO4 Make a recommendation
11. Evaluate the suitability of a property for mortgage finance 4 10 SO1 Demonstrate understanding of the value of property SO2 Highlight risks associated with property SO 3 Identify security required SO4 Demonstrate understanding of banking policy related to residential mortgage finance
12. Conduct a credit assessment of an application for Mortgage Finance 5 15 SO1 review the borrowers ability to repay the loan SO2 Establish the value in the property SO3 Highlight the risks in the transaction SO4 Evaluate compliance with banking policy SO5 Present conclusions
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Overall Skills Hierarchy in the Area of Mortgage
Finance
Customer Service Interaction
Sales
Administration
Credit Support
Standard Home Loan Sale US7240
Advise borrower re Mortgage Finance options US7
Credit assessment for Mortgage Finance US12
Rectify Records US7193
Cancellation US7192
Analysis of a personal banking position US7234
(generic not specific to Mortgage Finance)
Authorise Payment US7190
Advise borrower re affordability US9
Assess property US11
Establish financial position US7231
Application of Knowledge and Skills Generic
Skills Fundamental Skills Fundamental
Knowledge
Administer Payment US7189
Assess borrower US10
Guide client through the application process US8
POLICY AND PROCEDURE KNOWLEDGE APPLICABLE AT
DIFFERENT STAGES IN THE PROCESS SPECIFIC TO
BANK OR FINANCIAL INSTITUTIONS
Provide info US7152
Capture US7150
Customer Service
Mortgage Bond as a form of Security for a loan US5
Evaluate impact of changes after Bond Registration
Sales Skills
Lending Policy
Financial Analysis
General Policy (specific to bank)
Product Service Knowledge (specific to bank of
financier)
Bond Registration US5
Security in Lending (general) US3
Ownership of Immovable Property US2
Property US1