A new mortgage lender has opened its doors in New Zealand.
Resimac Home Loans has been launched officially in Auckland, extending the network from its Australian base.
The key focus will be 'lo doc' mortgage products, asset based lending that is reported to be targeted at borrowers who have difficulty in proving their income, usually because they are self-employed. Lo doc lending is considered 'asset based lending' rather than normal 'income based lending' offered by banks.
Resimac will be selling these products though mortgage brokers. It will be offering both upfront and trail commissions on its products.
The other key focus is that their loans will be bundled and sold into the securitisation markets.
Mary Ploughman of Resimac Australia noted that there is "not enough AAA paper being offered in the world" these days and investors are seeking more than can be supplied. Most Resimac securitisations attract a AAA credit rating. Investors are reported to want such residential backed mortgage securities (RMBS) based out of Australia and New Zealand because of their high-rated qualities.
Resimac says its latest securitisation offer was three times oversubscribed, even when its AU$250 mln offer was increased to AU$300 mln. "We need volume to meet investor demand," Ploughman said. The company has done 22 such transactions over its 27 year history, she said.
Launch specials have been announced, with a standard variable rate of 5.55% and a one-year fixed rate of 4.95%. These standard products require a loan to value ratio of less than 80%.
The launch lo doc variable rate is 5.95% with a maximum LVR of 70%.
The New Zealand operation is led by Adrienne Church, who joined the company after a senior role at Genworth Australia.
Some main banks also offer lo doc mortgages - although they do not announce or publicise them.
All mortgage rates are available on our rates page here »
5 Comments
This is fantastic news for NZ, congratulations, great stuff, really pleased to see this...
Rightyho I will get my Yeah Right t-shirt off now and get serious. We have been there done that and I seem to remember that last time around it burnt more than one lender. Don't they learn?
What next, finance companies financing boy racer car parts again?
Lo Doc if done properly is not Sub Prime. Resimac's book on Lo Doc is a first class performer and they have never had a loss on a securitisation. I do doubt the level of demand for this type of product though. Sub Prime is a mix of No Doc and Adverse Credit, there are still a couple of players in this market and the rates are around double that of the Banks. Priced for risk as they say.
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