The SMSF industry is being destroyed by individuals providing advice when they have no right to, no education, or qualification. Now the mortgage insurers are reacting to protect people from these unscrupulous operators. It also includes marketing companies representing developers selling overpriced stock to unwary investors.
Imagine all those people who have purchased Off the Plan properties recently that have not settled. They WILL lose their deposit if they do not settle.
Genworth have indicated they will change their policy commencing the 19th of December across the industry for SMSF.
- Genworth’s Underwriting Policy in relation to Lenders Mortgage Insurance for Self Managed Super Funds has been updated across the industry as follows:
- The Self Managed Super Fund must:
- hold minimum net tangible assets of $150,000 or more prior to the loan transaction; and
- have a minimum liquid asset (interest/dividend earning assets) balance of 10% of the total debts of the Self Managed Super Fund (including the loan amount) after the loan transaction is complete.
- Off-the-plan purchases and new properties that have been completed for less than 12 months are no longer acceptable. A “new property” is defined as being any property (including any house, unit, villa or townhouse) that has been fully completed for less than 12 months and/or has not been previously sold since construction (i.e. the vendor is a developer/builder or a related party of the developer/builder).
These changes will apply to all new insurance applications and loans on and from 19 December 2013.