No LMI Medico package

[CHAOS]

You already answered your own question. I already stated that the other professions have massive earning potential which lowers their credit risk and I'm sure the facts from lender's own risk profiling confirm this. Obviously teachers and nurses don't meet this eligibility criteria.

So banks discriminate? The facts on paper are accountant 90k, teacher 90k but accountants have "massive earning potential" so they are a lower credit risk.

Tobe you were right when you said no use looking for logic in banks and finance.

 

[Aaron_C]

So banks discriminate?

Of course they do. Why do you think credit scoring was invented? Why do banks not lend to you if you have a default on your file?

The facts on paper are accountant 90k, teacher 90k but accountants have "massive earning potential" so they are a lower credit risk.

Sure, that is based in statistics. You will be hard pressed to find a teacher earning $200k pa at 30-35 but for an accountant at a big firm that is pretty normal. I don't see how you can ignore this vital fact (or choose to ignore it).

Tobe you were right when you said no use looking for logic in banks and finance.

Indeed. I guess the whole reason why banks employ and pay people big bucks in their credit/treasury departments is because the numbers mean nothing and have no logic. Who needs policy?

 

[CHAOS]

Of course they do. Why do you think credit scoring was invented? Why do banks not lend to you if you have a default on your file?

That is not discrimination. You didn't make a payment you did something wrong. It is discrimination if an accountants default is ignored and the teachers results in a rejected claim?

Sure, that is based in statistics. You will be hard pressed to find a teacher earning $200k pa at 30-35 but for an accountant at a big firm that is pretty normal. I don't see how you can ignore this vital fact (or choose to ignore it).

I am not ignoring it Aaron. I agree in part with your example above about income comparison
However, a person earning 200k wouldn't be a standard accountant in a small business - they probably have a senior position and as you said in a large firm and have worked their way up. I doubt that 200k is the average income of 'accountants'

Teachers have that potential too - principals at private schools earn 200k+ and yes some are principals at 35. One Melb principal was reported in the media as earning 500k. And I am sure you can find counter examples - esp in Gov schools.


My issue is
Why does the 35 yo accountant at the local Tax Shop earning 90k get the same waiver just because his title says 'Accountant' .

The bank sees 'massive earning potential' - the bank makes an assumption that he is going to leave the tax shop and take up a leading position at PwC.


How is he different from the teacher who earns 90k?
I agree the accountant on 200k is a lower credit risk but it is because of his income not his job title.

On the flip side - the teacher/ principal who earns 200k doesn't get the LMI waiver. Why? Because they don't have the correct title.

Compare the 200k principal to the 90k accountant. Why does the 90k accountant get to save 5k on LMI?

Aaron you are coupling the title with the income - which I agree with in credit scoring.
To apply for the LMI waiver /profession package deal you need to be an 'accountant'. First you need to be the type of professional the bank is looking for. At that point they don't know that you earn 200k.


Just Saying.

 

[jonmardell]

Buy yet again an applicant is defined by their occupation. Not by their financials.

What is a mining professional?

On an application is just the higher income earners occupation used? For example if it is a joint application then do both applicants need to be accountants to get the waiver?

I wonder if paying for an accounting degree will be cheaper than forking out LMI?

Hi Chaos, a mining professional for the St George policy is engineers, Surveyors, mine surveyors, Quantity Surveyors and Geologists /
Geophysicists. The minimum income is 150K if only 1 applicant is part of the eligible occupations. If 2 applicants are eligible then their combined income needs to be 150K + . I have done some where their current income is not quite 150K but showed evidence of the income increasing each year for the last 3 and was likely to be 150K plus in the next year and i got it through.

 

[jonmardell]

If you look at one of my previous posts it is not down to the income it is credit risk. They have done statistical analysis on their existing loan book and the professions they have listed eligible for the LMI waiver have a significantly lower arrears rate.

Buy yet again an applicant is defined by their occupation. Not by their financials.

What is a mining professional?

On an application is just the higher income earners occupation used? For example if it is a joint application then do both applicants need to be accountants to get the waiver?

I wonder if paying for an accounting degree will be cheaper than forking out LMI?

I am not ignoring it Aaron. I agree in part with your example above about income comparison
However, a person earning 200k wouldn't be a standard accountant in a small business - they probably have a senior position and as you said in a large firm and have worked their way up. I doubt that 200k is the average income of 'accountants'

Teachers have that potential too - principals at private schools earn 200k+ and yes some are principals at 35. One Melb principal was reported in the media as earning 500k. And I am sure you can find counter examples - esp in Gov schools.


My issue is
Why does the 35 yo accountant at the local Tax Shop earning 90k get the same waiver just because his title says 'Accountant' .

The bank sees 'massive earning potential' - the bank makes an assumption that he is going to leave the tax shop and take up a leading position at PwC.


How is he different from the teacher who earns 90k?
I agree the accountant on 200k is a lower credit risk but it is because of his income not his job title.

On the flip side - the teacher/ principal who earns 200k doesn't get the LMI waiver. Why? Because they don't have the correct title.

Compare the 200k principal to the 90k accountant. Why does the 90k accountant get to save 5k on LMI?

Aaron you are coupling the title with the income - which I agree with in credit scoring.
To apply for the LMI waiver /profession package deal you need to be an 'accountant'. First you need to be the type of professional the bank is looking for. At that point they don't know that you earn 200k.


Just Saying.

 

[CHAOS]

Hi Jon - I can see the banks seeing the arrears stats as valid. It would be interesting to see how they collate the stats. Do they look at the occupation of both applicants or just the higher income earner. I would make the generalization that teachers and nurses would prob be the secondary income earner - and perhaps overlooked.

You have 50 teachers as secondary earners who are not counted - as husbands income as profession stats are only taken.

You have 2.5 teachers out of 50 in arrears. So 5% stats
But really that should be 2.5 teachers out of 100 (counting the occupation of the second earner) which is 2.5%
Assuming the accountants were not in arrears the & is 0.
Yes teachers are still have a higher percentage of arrears compared to accountants but the % is not as great.

Anyway it is how it is.

Thanks for the info on mining professionals - I just thought as professionals they would have fallen under their titles anyway eg engineer. I guess it makes a difference for surveyors - unfair to the local surveyor measuring house blocks.