Lenders - Make money for jam

[Rolf Latham]

Hiya

Another lender has gone bust.

We have today received advice that HLP Mortgage Co. will be ceasing business and an Administrator appointed to wind up the business.

Around 3 years ago, this lender was launched as a new flavour in lo doc and craa affected lending.................................strangely funded by the CBA I think.

Just goes to show, that lo doc lending isnt as profitable or as easy as some would think.

Having said that I also recall that HLP's marketing was attrocious.

We have also had advice that a couple of other smaller, but still good size non bank lenders are having troubles with paying their bills.

This might put another slant on the whats a good cheap loan question...................

ta
rolf

 

[luce.rocks]

can i ask a super-dumb question?

what happens to people with mortgages with these guys? i mean, does the lender just automatically tell them they need to sell up? or can they choose to try and pay out the remaining mortgage if they can? or something else?
taa.

 

[Rolf Latham]

Hiya

Thats an ok question.

I recall what usually happens is that someone else buys the mortgage from the dead lender, or takes over their business holus bolus.

So its unlikely that youd be "forced" to sell, but the commercial reality that your variable mortgage may go up by .50 % or so might make you think to move.

ta
rolf

 

[luce.rocks]

righto. taa

 

[Bricks & Mortar]

Hiya

Thats an ok question.

I recall what usually happens is that someone else buys the mortgage from the dead lender, or takes over their business holus bolus.

So its unlikely that youd be "forced" to sell, but the commercial reality that your variable mortgage may go up by .50 % or so might make you think to move.

ta
rolf

I presume with a fixed IP loan
It remains the same until 1 / 3 / 5 years you've taken out?
and then comes the increase.

 

[Mr Ed]

It is not uncommon for mortgage managers to sell some of their book to another for avariety of reasons. raise capital, reduce rsie etc. Recent sale was HSBC's book to first mac.

Your rates would usually remain the same, just a different name and company taking your money.

 

[alexlee]

Another lender has gone bust.

We have today received advice that HLP Mortgage Co. will be ceasing business and an Administrator appointed to wind up the business.

Around 3 years ago, this lender was launched as a new flavour in lo doc and craa affected lending.................................strangely funded by the CBA I think.

Rolf, were these guys brokers or did they actually provide the funds? i.e. did they fall over because their loans defaulted, or just they spent too much relative to the trail fees they were getting in?
Alex

 

[Rolf Latham]

Hi Alex

HLP was to be Australia's biggest and best lo doc and CRAA affected lender.

They were the funder.

The overall running of the business is likley what caused them to fall over, rather than the spread between the money they were getting in over what they were sourcing.

The HSBC First Mac sale is an interesting one. HSBC is a balance sheet lender, first mac is securitised.

All of a sudden your loans have mortgage insurance exposure..........be interesting to see if FirstMac have taken out a group policy, or had the loans assessed one by one.

ta
rolf

 

[Medine]

Hi Guys,

I remember attending a presentation where the folks from HLP were looking for investors for their venture. It was at least three years ago and it didn't interest me so my memory on it is vague.

I hope that not too many investors got caught up in it.

Cheers, Medine