COVID19 Crisis
Policy Update

In light of the government movement towards closure of all “non-essential” businesses in Australia, Firstmac would like to assure you that we remain fully operational with all key staff working remotely. While our office is closed, we remain open. We will do whatever it takes to maintain our service to you as we manoeuvre together through this unprecedented situation.
 

Rate decision

Following the RBA’s out-of-cycle cash rate change last week, we have looked at our situation and the ever-increasing cost of funds in this volatile market. We have determined that we cannot further reduce rates beyond our first March cut for either our new or our existing customers. Our business already keeps our margins low to maintain lower-than-market interest rates as a standard compared to the major banks.

Credit policy changes

In light of recent government restrictions, income for any borrowers employed by facilities 'restricted from opening' will be excluded from serviceability, effective immediately. This list changes on a daily basis. Early industries affected include but are not limited to:

• Pubs, registered and licenced clubs (excluding bottle shops attached to these venues), hotels (excluding accommodation)
• Gyms and indoor sporting venues
• Cinemas, entertainment venues, casinos, and night clubs
• Restaurants and cafes

Additionally, income for 'casual' employees in other currently volatile industries such as travel and hospitality will be excluded from serviceability. For full time employees in these industries we will still consider on a case-by-case basis, however, variable income such as commissions, overtime, and bonuses may not be used for serviceability.

We would like to remind you that the question on the loan application form dealing with foreseeable changes to the ability to make repayments must be completed appropriately.

For the latest information on whether your customer’s income is likely to be excluded from serviceability, please review the list at this link: https://www.pm.gov.au/media

Pipeline – Home loans and car loans

• Final approvals will proceed to settlement
• Loans in progress including preliminary approvals
  • Purchases to be reviewed on a case-by-case basis where the applicant is impacted by COVID-19
  • Refinances to be assessed on the new COVID-19 criteria and applications are required to pass under this criteria

Hardship Policy

As a group, we will continue to monitor this unfolding situation with a focus on what support we can offer to our customers who are experiencing job loss and hardship. We are putting the customers most impacted by this crisis at the front of all that we are doing and the decisions we make.

Our existing hardship policy is well suited to the current crisis, offering:

• a repayments holiday for three months
• the option to extend for a further three months

In response to the COVID-19 crisis, we have assigned additional local staff to our Hardship Team so we can speak to each customer personally and work through a solution to their individual circumstances.

If your customer is experiencing hardship, please have them call us directly on 13 12 20 and one of our Hardship Consultants will help them with consideration and empathy.

Face-to-face Broker Meetings

Firstmac does not require the broker to conduct a face-to-face interview with a client prior to lodging an application or to view client identification documents. However, our mortgage document pack which includes a VOI form requires original signatures. The VOI form must be completed by a prescribed person listed on the form and the mortgage documents will still need to be witnessed. This process is currently being reviewed with the Titles Offices in each state and we will provide you with an update when available.

Answers to some common questions are below.

Hardship FAQs

Q. What's your preferred contact method for customers impacted by COVID-19 that seek hardship support?

Please have customers contact us directly on 13 12 20 and we will put them through to our Australian-based Hardship Team to discuss their options.

Q. Would you like our brokers to collect information / details or complete a form to help support this process on your behalf?

This is not required. To qualify for our hardship arrangements, most customers will just need a letter from their employer confirming that their income has been reduced.

Q. Are you working on any short-term changes to your hardship policy & processes to deal with COVID-19?

Our existing hardship policy is well suited to the current crisis, offering a repayments holiday of 3 months with an option to extend for a further 3 months. In response to the COVID-19 crisis, we have assigned additional local staff to the Hardship Team so we can speak to each customer personally and work through a solution to their individual circumstances.

Q. How does the customer repay their outstanding debt after they exit a hardship arrangement?

The customer is given an option to repay the arrears or, alternatively, to capitalise the arrears and increase their regular payments. It is not possible to extend the term of the loan.

Q. Is there any risk to your centralised contact centres being closed / shut down that will limit your ability to process an increase of hardship requests?

We enacted our business continuity plan ahead of the market and have successfully moved the vast majority of our employees to work remotely. We have also assigned extra staff to our Hardship Team. We do not anticipate any delays in processing Hardship requests.

Q. If a payment arrangement or repayment holiday is agreed with a client, will this impact on Broker trail commission payments?

We are currently reviewing trail policy where customers are in hardship as a result of COVID-19 and will advise as soon as possible.

Q. Does Firstmac require brokers to ID their clients face to face before lodging a loan application?

Firstmac does not require the broker to conduct a face-to-face interview with a client prior to lodging an application or to view client identification documents.

Q. Does Firstmac require all ID verification to be done in person?

Our mortgage document pack which includes a VOI form requires original signatures. The VOI form must be completed by a prescribed person listed on the form and the mortgage documents will still need to be witnessed. This process is currently being reviewed with the Titles Offices in each state and we will provide you with an update when available.