Lenders offering low doc home loans have tightened their lending practices in response to the introduction of responsible lending rules, an Australian Securities and Investments Commission review has found.ASIC reviewed how lenders offering low doc loans were complying with the responsible lending obligations introduced in 2010. It said that, before the introduction of the rules, some lenders did not verify a borrower's financial situation. Instead, they relied on a statement from the borrower that they could meet their repayments. "This led, in some cases, to borrowers not being able to pay back the loan or only being able to do so by selling their home," ASIC said. The National Consumer Credit Protection Act requires that, before a lender offers to enter into a credit contract with a consumer, it should make reasonable inquiries and take reasonable steps to check the consumer's information in their loan application.The lender is also required to assess whether the loan contract will be suitable for the borrower. A loan is unsuitable if it does not meet the borrower's requirements and objectives, and if the borrower cannot repay the loan without substantial hardship.ASIC's review of 12 lenders found that lending practices had improved. Low doc loans were being offered to a narrower range of borrowers - the self-employed and those who could not easily verify their incomes. It found that lenders routinely obtained additional information to verify income, such as bank account statements or letters from accountants, and that lenders had processes in place to check the reliability of information supplied by mortgage brokers.ASIC said it still had a few concerns. There were examples of poor recordkeeping, where lenders did not record the outcomes of inquiries into borrowers' requirements and objectives.Some lenders relied on benchmark indicators of living expenses, rather than looking into a borrower's actual living expenses. Others performed only limited inquiries into an applicant's other loan commitments.