7.1 Substitution of Security and Partial Release of Security
7.1.1 Substitution of Security
| Variation | Additional Underwriting Policy |
| LVR and Loan Amount remain the same or decreases |
Documentation Requirements:
- LMI Variation form
- Confirmation of residual loan amount and LVR
- Full valuation of new security (or securities) not older than 90 days.
Underwriting Policy:
- The residual loan amount and LVR must satisfy product parameters
- The new security (or securities) must satisfy policy as per section 5.8 Security of this Underwriting Policy
- No fee or additional premium will apply in this scenario
- Original policy will remain in force, variation refund is not payable.
|
| LVR or Loan Amount increases within current product parameters |
Documentation Requirements:
- New proposal submitted in line with Genworth standard documentation as per section 6 Documentation of this Underwriting Policy.
Underwriting Policy:
- All aspects of his Underwriting Policy must be met
- A new LMI premium will apply in this scenario
- Original policy will be cancelled and, where applicable, a variation refund will be payable as per section 7.1.3 Variation Refund of this Underwriting Policy.
|
Note: Full valuation report no older than 90 days must be provided for all remaining / new securities in all cases.
7.1.2 Partial Release of Security
| Variation | Additional Underwriting Policy |
| LVR remains the same or decreases |
Documentation Requirements:
- LMI Variation form
- Confirmation of residual loan amount and LVR
- Full valuation of remaining security/securities not older than 90 days.
Underwriting Policy:
- The residual loan amount and LVR must satisfy product parameters
- The remaining security/securities must satisfy policy as per section 5.8 Security of this Underwriting Policy
- No fee or additional premium will apply
- Original policy will remain in force, variation refund is not payable.
|
| LVR increases within current product parameters (total net sale proceeds are applied to the loan) |
Documentation Requirements:
- LMI Variation form
- Confirmation of residual loan amount and LVR
- Updated employment and income evidence, and current assets and liabilities
- Full valuation of remaining security/securities not older than 90 days
- Contract of Sale for outgoing security
- Settle disbursement details confirming net proceeds and destination of funds. In cases where a disbursement notice is not available, confirmation in writing is required that full net proceeds are being applied to the loan.
Underwriting Policy:
- All aspects of his Underwriting Policy must be met
- A fee of $500.00 will apply
- Original policy will remain in force, variation refund is not payable.
|
| LVR increases within current product parameters (part sale proceeds are applied to the loan) |
Documentation Requirements:
- New proposal submitted in line with Genworth standard documentation as per section 6 Documentation of this Underwriting Policy.
Underwriting Policy:
- All aspects of his Underwriting Policy must be met
- A new LMI premium will apply
- Original policy will be cancelled and, where applicable, a variation refund will be payable as per section 7.1.3 of Variation Refund this Underwriting Policy.
|
| LVR increases outside of current product parameters (resulting from Hardship) |
Variations resulting from hardship must be submitted directly to the Hardship Solutions Team:
Hardship Solutions Team
Fax: 1300 135 759
Ph: 02 8022 7348
Email: hardship@genworth.com
Documentation Requirements:
- Hardship Recommendation Form
- Confirmation all avenues have been exhausted to reduce LVR to maximum product LVR
- Declaration (by Lender/funder) that borrower is in a distressed financial situation
- Full set of supporting documentation as per Section 6 of this Underwriting Policy
- Valuation of remaining security/securities not older than 90 days
- Valuation of outgoing security not older than 90 days
- Contract of Sale for outgoing security
- Settle disbursement details confirming net proceeds and destination of funds. In cases where a disbursement notice is not available, confirmation in writing is required that full net proceeds are being applied to the loan.
|
| LVR increases outside of current product parameters (not resulting from Hardship) |
Documentation Requirements:
- LMI Variation form
- Confirmation of residual loan amount and LVR
- Confirmation all avenues have been exhausted to reduce LVR to maximum product LVR
- Confirmation Hardship assistance is not required
- Full set of supporting documentation as per section 6 Documentation of this Underwriting Policy
- Valuation of remaining security/securities not older than 90 days
- Valuation of outgoing security not older than 90 days
- Contract of Sale for outgoing security
- Settle disbursement details confirming net proceeds and destination of funds. In cases where a disbursement notice is not available, confirmation in writing is required that full net proceeds are being applied to the loan.
Underwriting Policy:
- Amendments falling under this scenario will be considered on an exception basis only
- All aspects of his Underwriting Policy must be met
- A risk-based fee determined on application will apply
- Original policy will remain in force, variation refund is not payable.
|
7.1.3 Variation Refund
- For loan variations such as Substitution of Security and Partial Release of Security, and any others, which increase the exposure or risk, a new proposal and premium will apply. A special refund in respect of the existing policy may be payable
- Any enquiries received by Genworth from borrowers regarding refunds will be forwarded to the Lender to address
- For variation refunds, the following table is to apply:
| Period from date of premium payment to date of variation | Refund Payable3 |
| 3 months or less | 80% |
| Over 3 months to 1 year | 70% |
| Over 1 year to 2 years | 50% |
Note: No refund will be paid where the amount calculated is less than $150. This table is subject to change.
Example:
Premium paid on original policy/loan - $2,400
Term of policy elapsed 13 months - 50%
Refund due on original policy - $1,200
3 Based on the total LMI premium paid less any rebate paid to the Lender.