Australia's ANZ has become the latest big bank to step up its push into the controversial but fast growing low-documentation lending market as more traditional forms of home lending slow down.
Wednesday, August 10th 2005, 7:49AM
by The Landlord
The bank is introducing a new product, "ANZ Lo Doc", which is aimed at self-employed people who may not have the full set of documents to apply for a traditional loan. Rather than provide pay slips or tax returns, a borrower can simply state their income, a process called self-verification.
ANZ's new product follows NAB's decision earlier this year to sell low-doc loans through its branch network and Westpac's move to reduce interest rates on its low-doc products. In the past, lenders would charge a higher interest rate for low-doc loans but increasing competition has pushed prices down to the equivalent of a standard variable home loan.
"It's a competitive area," ANZ's head of mortgages, Chris Cooper, said. "It's the fastest growing sector and everyone wants a piece."
Analysts estimate the low-doc lending market is growing at more than 15 per cent a year compared to 12 per cent for traditional home loans.
The move to grow its own low-doc lending book may put in doubt ANZ's bid for a stake of up to 40 per cent in non-traditional lender Bluestone Mortgages. It is understood ANZ has made it through to the last round of bidding, along with US giant GE, but the bank is keen to get a foothold in the sector regardless of the outcome of the Bluestone deal.
