Aggregators caught up in Banksia fallout

by Mackenzie McCarty30 Oct 2012

Leading mortgage aggregators who maintained Banksia Financial Group on their approved panel of lenders are in the midst of dealing with the group's shock insolvency.

Banksia Securities was put under the receivership of McGrathNicol last week, after secured creditor The Trust Company acted on fears over the group's solvency.

Australian Finance Group, which maintained Banksia Financial on its panel of lenders, has indicated it is directing immediate attention to mortgage broker-sourced applications that have been approved and not settled or are currently being assessed or awaiting assessment.

Director of sales and operations Mark Hewitt told Australian Broker a number of non-bank panel lenders had stepped into the breach, with offers to assist in relation to these files in progress. He revealed there were less than five such applications.

Hewitt would not comment on the likely outcome for broker commissions on existnig loans, with administrators only appointed to Banksia Financial last week.

"It is too early to speculate but we are committed to keeping our members informed as the situation becomes clearer," Hewitt said.

Other aggregators had maintained and approved Banksia Financial, including Vow Financial.

Banksia Financial formerly encouraged commercial, industrial and rural property loan submissions from brokers up to the value of $10 million, funding its lending portfolio through a mortgage fund for investors. The administrators said $660m in funds are owed to investors.

The lender marketed itself as a niche funder without 'big organisation' processes, promising customers and brokers they were "dealing with a quality lender who is able to handle significant loan size and volume".




  • by Country Broker 31/10/2012 11:00:53 AM

    Best brokers can do is REFINANCE client out as soon as possible most loan In Banksia have NIl penalities for early payout and were shorter term loans.

  • by John McNamara 31/10/2012 1:29:12 PM

    In relation to expanding NCCP to Small Business.
    I am very concerned about this as I believe it has the potential to significantly slow lending to small business in Australia, and therefore slowing small business. A number of small business clients of ours find bank's lending policies conservative and confusing, and adding legislation to this will only make for a more difficult lending environment.