Odds increase of RHG lending comeback

By BN | 05 Feb 2010

Following the resolving of various legal actions in the NSW Supreme Court yesterday, RHG may return as a mortgage broker or lender next year, according to reports

An article in today's SMH said the resolving of the court actions would help boost RHG's profits by as much as $10m from between $55m and $65m to as much as $75m.

Their resolution plus the extra income has increased the likelihood of a comeback.

According to SMH, RHG is considering re-launching as either a mortgage broker or buying a home loan provider.

Asked to comment on the report, a spokesperson for RHG said chairman John Kinghorn was asked at last year's AGM in November if he would consider a return to lending. "John Kinghorn said he would consider it."

"However he did not give a commitment he would return," the spokesperson added.

RHG was RAMS Home Loans before the brand and franchise network was sold to Westpac in 2007.

As part of the arrangement with Westpac, RHG is not allowed to offer home loans for three years (up until November this year).

Since selling its brand to Westpac, RHG has operating only as a closed mortgage book.

Related stories:

RHG clarifies lending rates - Listed mortgage book RHG (formerly RAMS Home Loans) has clarified its lending rates after it was reported that it had the highest standard variable mortgage rate in the market

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Commented by: broker at 05 Feb 2010 03:31 PM

RHG should not be permitted to charge the exit fee for borrowers who have had a loan for longer than 4 years. They have been charged extravagant interest rates, which smacks of manipulation of the lender to suit their own profits. Many borrowers have changed the lender because the interest rate is too high. This has resulted in the borrower having to increase their loan to accomodate this exit fee. Extortion would better describe the antics of John Longhorn.
I changed att a cost of $17,000. Many of my clients chose not to refinance and are still being manipulated by RHG.
Whilst the broker channel needs more flexible lenders to compete with the big banks, I am not sure the broker channel can afford to have such a questionable lender on their panel.

Commented by: Broker at 05 Feb 2010 04:17 PM

I had a client (ex Rams) that wanted to increase his loan by 30K or so, he had to pay LMI again on the ENTIRE loan exposure, even though he paid previously on the initial loan amount of 420K( about 450K loan resulting in approx 10K LMI to get that 30K) as the old mortgage Insurer Prime had left the market place, he had no choice as his exit fees were far more than the LMI, an utter disgrace!.

Naturally he will be refiancing the very day his exit fees lapse

Commented by: Concerned Broker at 07 Feb 2010 09:06 PM
What sane Broker would ever consider recommending an RHG product given their past performance. RHG is the type of organisation that gives the Broker industry a bad name.

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