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Commonwealth Bank revamps reverse mortgage product

12 November 2007

The Commonwealth Bank has made a number of improvements to its reverse mortgage product which will be launched to the Third Party broker market in December.

"The changes we have made to our product have been made to protect customers, promote transparency and ensure customers make informed choices," said Kathy Cummings, Head of Third Party Banking.

The Commonwealth Bank’s Equity Unlock Loan for Seniors (EQFS) has been enhanced with key amendments including greater clarity around structuring of commissions and a requirement for independent legal and financial advice.

The Bank’s changes to the product include flat fee commissions to brokers which will discourage inappropriate up-selling of the loan limit. In addition, customers are required to obtain independent financial and legal advice to ensure that an external party informs the customer of the products suitability to their individual circumstances.

"We continue to be innovative with this product and are committed to ensuring our customers are well-informed with every aspect of a reverse mortgage to ensure that they make the most appropriate financial decision for their needs," said Ms Cummings, Head of Third Party Banking.

For senior citizens inadequately prepared financially for retirement, a reverse mortgage can allow them to stay in the comfort of their own home and unlock the equity they have built up to fund their lifestyle in retirement.

"We will also be requiring mandatory SEQUAL (Senior Australians Equity Release Association of Lenders) accreditation, plus a customer-friendly reverse mortgage contract which improves transparency on default clauses, reducing the risk of customers being misled. We believe that these changes make us best practice in the market," said Ms Cummings.


ENDS

For more information contact:

Steve Batten
Commonwealth Bank
Ph: (02) 9378 2504
Mob: 0411 080 268
E: steve.batten@cba.com.au

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