August issue of industry magazine “Australian Broker” presents industry experts agreeing that “Low-Doc” Lending is now effectively gone or will be gone with the National Consumber Credit Protection (NCCP) laws coming into effect as from 1st January 2011.  This legislation requires brokers and lenders to obtain adequate information and take “reasonable steps” to verify a borrower’s situation at the time of application, requiring additional documentation.  Therefore, a borrower who self certifies his income solely will no longer be accepted.

The irresonsible practices in the US market which preceeded the global financial crises has seen low doc lending in Australia being tarred with the same brush despite our lenders having more stringent processes.  It all comes down to whether Lenders and their repesentatives having done their due diligence as to the loan being “suitable”.

Low doc products remain currently.  However,  1st January 2011 will tell a different story.

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