Welcome to the Vendor Finance Institute Blog

/Welcome to the Vendor Finance Institute Blog/

Creative, Low Doc Loans For The Self Employed

Ever since the new National Credit Code (NCC) came in, traditional lenders have correctly been wary of Low Documentation (Low Doc) lending to consumers for residential property. However quite a number of traditional lenders, including a subsidiary of one of the ‘Big 4’, continue to lend on a Low Doc basis, so why not Vendor [...]

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What Name Do You Buy An Investment Property In?

I'd like to thank Australia's most experienced vendor finance lawyer, Mr. Tony Cordato for the following article. DO YOU BUY INVESTMENT PROPERTY IN A PERSONAL NAME OR IN A FAMILY TRUST OR A SELF-MANAGED SUPER FUND? This article sets out the pros and cons of buying investment property in a personal name, or in the [...]

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Good News For Mature Age Home Buyers

Since the inception of the National Credit Code, you may have noticed traditional lenders knocking back applications from mature age borrowers. When looking at this issue it's best to look at Rent-To-Owns (Lease/Options) separately from Instalment Contracts and Deposit Finance.  That’s because Rent-To-Owns (RTO's) aren't regulated by the National Credit Code (NCC). Rent-To-Owns While RTO [...]

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Compliance Essentials – for Those with an Australian Credit Licence

When I put the link to Compliance Essentials on Facebook I said, "Makes ACL compliance a snap and boy do I need that ;-) "  If you're anything like me, there was a big sigh of relief when I got our ACL and on-going compliance wasn't a top priority. The thing about ACL's is they [...]

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How To Handle Buyer Hardship

No matter how well you qualify your potential vendor finance buyers, ‘stuff’ happens in peoples’ lives and occasionally your buyers will get into financial hardship. Lease/Options (Rent To Own) If your buyers are tenant/buyers, under a Lease/Option (Rent To Own), non-payment of rent is covered by the various State Residential Tenancy Acts.  This is not [...]

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Make Sure Your Rent-To-Own Paperwork Stacks Up

When setting up a Rent-T0-Own most of us focus on the transaction being a bunch of paperwork designed to get our tenant/buyers into home ownership.  While this is correct it's also important to recognise that it's made up of two separate documents, i.e. a Residential Lease and a Call Option. A Call Option is regulated [...]

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Insurance – A New Twist

I'd like to thank Belinda and Marc for sharing their 'insurance story' with the attendees of the last Vendor Finance Association meeting in Sydney. Marc & Belinda recently had a property they'd sold with vendor finance burn down.  Apparently it took only six minutes for the fire to completely destroy the property. Very scary but [...]

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Statements

Sending out a loan statement for an Instalment Contract or Second Mortgage would, on the surface, seem to be a pretty straight forward thing to do.  It is but, with the advent of the National Credit Code, these statements have got to contain a prescribed list of information and be sent out at regular intervals. [...]

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Bait Advertising

When we started out in vendor finance (VF) we weren't sure if there really were VF buyers out there.  We received assurances that there were and also a suggestion that we test our local market by placing an ad in our local newspaper for a non-existent home, to see what sought of response we got. [...]

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Calculation & Display of A Comparison Rate

If you chose to advertise your weekly/fortnightly/monthly repayment or your interest rate you must also display a Comparison Rate and the prescribed statements relating to that Comparison Rate. A Comparison Rate is described as, a tool to help consumers identify the true cost of a loan. It factors in the interest rate, fees and charges [...]

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New Advertising Guidance From ASIC

On 15 November 2012, ASIC came out with their new Good Practice Guidance for Advertising Credit & Financial Products and Services.  To say it's extensive is an understatement, e.g. have a look at what this advertising guidance applies to: 'What our guidance applies to' RG 234.8 Our good practice guidance applies to any communication whose [...]

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Prior Experience and ‘Grey’ Areas

Somewhere along the line, as you build your real estate vendor finance business, most vendor financiers realise they need their own Australian Credit Licence (ACL). The National Consumer Credit Protection Act and its associated National Credit Code are still relatively new and, being human, there is resistance to change.  This resistance to change can encourage [...]

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Credit Representative Warning

If you have been offered Credit Representative status by an Australian Credit Licence (ACL) holder that includes the authority to 'provide credit' beware! ASIC recently refused an ACL application to a business whose business model involved allowing their Credit Representatives to 'provide credit'.  ASIC's decision to refuse the ACL application was taken to the Administrative [...]

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Vendor Finance and Licensing

I would like to thank Mr. Tony Cordato, Australia's most experienced vendor finance lawyer, for the following contribution to this issue of VFI News. Licensing, as it applies to our vendor finance industry, has been a hot topic of discussion of late and with this in mind Tony writes, "I provide this commentary on where [...]

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Trust Accounts – Do You Need One?

The term Trust Account can be confusing as, broadly speaking, there are two types and they’re often mixed up.  The two broad types of Trust Accounts are: A ‘bank’ account for a Trust, e.g. an account with a bank, building society or credit union for a Family or Unit Trust, and A ‘bank’ account required [...]

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Power of Attorney

Most Vendor Financiers, at some point in their business, will use a Power of Attorney (POA) as part of the process of 'controlling' a property.  The way POA's are used in a Vendor Finance business are many and varied, however this Newsletter is dedicated to making sure your POA can be used to authorise a change [...]

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Vendor Finance Institute Welcomes You

Vendor Finance Institute (VFI) If you are involved or researching the vendor finance industry, you’re at the right place.  We’re here to bring you the very latest industry information, the latest updates on the ever changing regulatory requirements, professional vendor finance training and specialist tools to help your business systems run more smoothly. Some of the most [...]

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