Non conforming Challenger product killed by NAB ?

HIya

looks like maybe it didnt take long for NAB to already out its foot down on what they see as risky business.

BMC announced this arvo that


BMC wishes to advise that our source of NON CONFORMING HOME LOANS has advised that the program has been withdrawn from sale of all NEW LOANS & INCREASES to existing NON CONFORMING LOANS effective immediately.

Im making some assumptions here, but looks close to the mark and will be able to have a better idea on confirmation tommorow

ta
rolf
 
Have a look at this, I wonder if people on this forum still think that NAB buying Challenger benfits anyone




Homeloans Premium Plus Products

Please be aware that Homeloans Ltd is ceasing the Homeloans Premium Plus product and the sale of loans under the Non-Conforming program, effective immediately.
Top-ups on existing non-conforming loans will no longer be available. Existing borrowers who qualify as prime borrowers under the Homeloans Premium Products who require a top-up may apply to refinance their existing facility subject to our lending program criteria.
 
HIya

looks like maybe it didnt take long for NAB to already out its foot down on what they see as risky business.

In the semiar NAB Homeside did today (for about 4 hours) they had their head of credit there... synopsis is if its risky NAB and its entities are more likely to decline. For them its no longer just a matter of the servicing calculator passes, its a hard look at each deal to see where they sit on their credit score as well... and its a matter of if clients will repay it when times get tough - which they see currently as unemployment getting to @8%+ and property values falling up to 25%.

So they see things as going to be getting way tougher in the future for borrowers to access funds for the next 18 months.
 
It makes senses from the bank's perspective. If they can lend on full documentation why would they lend on low doc. Bear in mind that for each $1 a bank loses on a loan it will need to reduce its loan book by $10 approx under the fractional reserve banking system.

It's better to preserve your capital than to risk losing it.
 
If they can lend on full documentation why would they lend on low doc.

exactly, so why buy them? why not stick to your core business?

they are takign a different business model and effectively killing it off. This deal should be knocked on the head as anti-competitive. strewth if the laws were ever needed it is now. Not that I see Swanny doing much, he's been a banking puppet from the gecko
 
Hiya

Whats perhaps NOT clear is that the challenger money for non conforming was ALWAYS rate for risk.

Even in todays enviro, youd be well into double digits if you needed that sort of money.

See, NAB doesnt need that sort of rate, they are already making early to mid teens on overdrafts and late teens on cards, so they dont reallt need what looks to them like more risky business.

NAB bought it for the distribution model, and got it for a sooooooooooong

ta
rolf
 
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