Mortgage industry data standards body LIXI has been working with a group of industry professionals to develop a standard set of forms that lenders can use when asking loan applicants about living expenses and loan purpose.Gadens partner Elise Ivory said the project team was planning to take its proposal to the Australian Securities and Investment Commission to seek a response.There has been considerable uncertainty in the mortgage industry about how to meet the responsible lending requirements of the National Consumer Credit Protection Act since last August, when ASIC released the results of a review of lending practices.The review was of interest-only mortgage lending but its findings applied more broadly.ASIC said that in more than 30 per cent of files reviewed there was no evidence that the lender had considered whether the interest-only home loan met the borrower's requirements.There were numerous files where the stated objective of the borrower was "to purchase property," with no information about the reason an interest-only loan had been selected."Statements of this type do not support the decision to provide an interest-only home loan rather than another type of loan, and are inadequate as they suggest that the consumer did not have any objectives for the loan itself," ASIC said.In 20 per cent of files lenders had not considered the borrower's actual living expenses when approving the loan but relied instead on "expense benchmarks". Some ignored expenditure information provided by the borrower. In some cases other debt was not taken into account in affordability calculations."We were disappointed to observe that the practices of many lenders appeared to fall short of our expectations," the review said.Ivory said that in response to the report, lenders had developed a range of different approaches to inquiring about living expenses and loan purpose. When asking about living expenses, some lenders have checklists with as many as 25 items, while others have lists with five items.She said this inconsistency made it hard for brokers and might put some lenders at a disadvantage. "The LIXI project was set up to try and bring some consistency into the process," Ivory said.LIXI's draft form breaks living expenses into a number of categories and sub-categories. The main categories are communications, food and beverage, clothing, recreation and entertainment, health and education.Ivory said when it came to inquiring about loan purpose, lenders or brokers had to do more than find out that the loan was, for instance, for a home purchase. They had to inquire about the reasons why borrowers wanted certain features, such as an offset account, interest-only loan or a line of credit."This is only going to get more difficult as the industry moves more into online sales. That is why we need comprehensive, consistent forms," she said.