Hard times continue for mortgage trust stalwart

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The manager of Howard Mortgage Fund – one of the country’s oldest mortgage trusts - has begun the process of returning capital to unit-holders, providing further evidence of the industry’s decline following the GFC.

Fidante Partners wrote to unit-holders in November last year, advising them that it had ceased to offer investment in the fund to new unit-holders and that existing unit-holders would no longer have the option of reinvesting their monthly income distributions.

The manager made an initial repayment last week of 10 cents per unit – a 10% return of capital - and plans to repay capital of five cents per unit each month from February.

Mortgage trusts suffered heavily during the GFC, prior to which the industry represented a A$20bn pool of capital for mortgage finance. Now, only a handful of fund managers remain.

Total funds under management fell 24% in 2010 and a further 19% in 2011.

Other funds that are being wound up include Balmain Mortgage, Colonial First State Income and Perpetual Mortgage.

  • Barney on 17/01/2013 1:33:21 PM

    Have to agree with Country Broker. Government guarantee. Good plan! Sent nearly all of these debenture style of funders to the wall (as well as many property trusts). Losing $100's millions of dollars in money - largely from retirees. Good work Labour!
    Plus forcing many property owners to refinance (or "try to") after the market has crashed and the lending options and landscape have changed. How many of these people have had to sell and lost money as well?
    Yet they (Labour) claim their handling of the GFC was a victory?

  • Country Broker on 17/01/2013 11:45:46 AM

    Oh yes the Govermant guarantee helped the banks and credit unions , but has resulted in te Demise of this source of funding , well done labour .

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