RBS exits reverse mortgage market
By
Andrea Cornish
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6/05/2010 8:00:00 AM
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4
comments
Australia's biggest reverse mortgage provider announced it is backing out of the market.
Following a strategic review of its businesses, the paritally state-owned Royal Bank of Scotland decided to exit all non-core retail businesses outside of the United Kingdom. As a result, it is closing its Reverse Mortgages Services Pty Limited.
RBS head of reverse mortgages Martin Lynch told Broker News that the division is currently in the process of being sold and the understanding is that, once it has been acquired, it will return to the market with its previous range of products.
All applications that had been received by the RBS reverse mortgage division on or before 19 April will be processed, subject to settlement within a three-month time frame. Upfront and trail commission payments on settled loans will continue to be honoured.
“The decision to close to new business will not impact our existing customers with reverse mortgage loan products; there will be no changes to the current loan terms and conditions and all existing commitments, including amounts under flexible draw and monthly income drawdown options, will be honoured in accordance with the terms and conditions,” Lynch said in a statement to brokers.
The exit of RBS leaves just three lenders in the Australian market place - BankWest, Commonwealth Bank and St. George.
Latest Comments
Total:
4
comment(s)
kevin collins on
07 May 2010 10:54 AM
My question is "why", whats happenning to the fastest growing " loan market in this country. We have an aging population with little or no monies to retire on yet the reverse mortgage market is shrinking to nothing.
Can any one enlighten me.?
Linda McIntyre on
07 May 2010 11:43 AM
I really don''t know why either. This market is my favourite to work in, but difficult to do so now with only fairly ordinary lenders left - will possibly have to wait until RBS re-enters the market under a new banner/lender/purchaser.
marty on
07 May 2010 03:08 PM
they are leaving the market because of the huge risk of property over valuations in this country. If a 40% drop in value it wont take long fopr the interest to eat away all the "equity".
Pardon Me Broker on
07 May 2010 03:54 PM
What a pity they were great to deal with the lenders and loans that are left are average to say the least. But we will have to deal with them.
I understand about the valuation and concerns about that.
Here is hoping another GOOD operator buys the RBS book and system that RBS had , there is a strong need for it.