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United Home Loans unable to write new business

United Home Loans is unable to originate new mortgages because it hasn’t been able to find new funders to replace GE Money, its owner, Lombard Group, told the stock exchange late on Monday.

Tuesday, February 17th 2009, 10:56AM

by Jenny Ruth

GE Money withdrew from funding third party mortgage originators last October. While United had been using other funding providers, Lombard says difficult market conditions have deteriorated further since October. Although it has had ongoing discussions with alternative funders, United "is no longer in a position to originate new mortgage transactions," Lombard said. United will continue to receive monthly trail payments from various lenders, unless loans are in default, and will gradually run down its mortgage book, the company said. Lombard bought United from Hanover Group in December 2007 for $1.425 million. It wrote down its value to $1.086 million at September 30 and will be "impairment tested" again at March 31, it said. It has been clear for months that United hasn’t been trying to attract new business. Its floating mortgage rate has remained unchanged at 10.22% since September last year while active lenders have been aggressively cutting rates in response to the Reserve Bank cutting its official cash rate. ASB Bank, for example, has cut its floating rate from 10.25% to 6.9% over that period. Last week, Lombard told the stock exchange its other mortgage originator, Tasman Mortgages, ceased writing new business has had management of much of its loans taken over by a major lender, significantly reducing its trail income and the size of mortgages under management. Lombard didn’t say which lender was involved. It also said another arm of the business, Tasman Mortgage Brokers, is subject to a wind-up application from the Inland Revenue Department. This relates to unpaid tax from before Lombard bought the Tasman Mortgages Group from Blue Chip, now named Northern Crest Investments, in July 2007. Lombard has already written off the $50,000 purchase price and the broking operation hasn’t undertaken any new business since October. Lombard said it has "been in dialogue" with IRD and has made a formal demand on Northern Crest under the warranties in the sale and purchase agreement.

« Cheap not always the easy optionBNZ share of mortgage market shrinks »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 5.65 5.55 5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society ▼8.60 6.75 6.40 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 5.95 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.49 6.49 6.49
TSB Special 7.89 5.69 5.69 5.69
Unity 7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.10 6.05 5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.02 5.79 5.69

Last updated: 20 November 2024 9:45am

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