MACQUARIE Group is to wind back its retail and wholesale Australian residential mortgage origination services due to higher funding costs.
In a statement to the market this morning, Macquarie said its subsidiary, Macquarie Securitisation, also was reacting to “current conditions in the global mortgage securitisation market''.
Macquarie said it “would wind-back its Australian residential mortgage origination services for both retail and wholesale customers due to the significant increase in the cost of funding mortgages.''
The Head of Macquarie's Banking and Financial Services Group, Peter Maher, said the Bank would “substantially reduce'' origination of new residential mortgages in Australia from March 7, 2008, but would continue to provide full service to existing customers.
Macquarie customers in Australia currently hold 95,000 facilities with the bank.
”There will be no impact on these customers and we will continue to provide to them the range of existing customer services including mortgage variation services,'' Mr Maher said.
”It will be business as usual for our existing customer base.''
He said new mortgage business would still be written albeit at much reduced volumes.
Mr Maher said Macquarie's mortgage portfolio represented around 2.5 per cent of the total outstanding housing loans market in Australia. The portfolio is funded mainly by wholesale securitisation markets.
”As noted by numerous market participants, deteriorating conditions in these markets over the past six months have resulted in a sharp rise in the cost of funding mortgages and significant reductions in the availability of funding from both the domestic and international mortgage securitisation markets,'' Mr Maher said.
Macquarie Group chief financial officer Greg Ward said the decision would not be significant to Macquarie's overall financial position.
”We have previously advised the market that in full year 2007, the retail and wholesale residential mortgage businesses represented less than 1 per cent of Macquarie Group profits,'' Mr Ward said.
”The impact of the decision to wind-back the business is not financially material. We have also previously advised that the mortgages business has no sub-prime exposure, default rates are low and the credit quality of the portfolio is good.''
Looks its back to making a profit guys !!!!!
Richard Taylor | Australia's leading private lender
Thanks for the info Richard. My broker has just sent me a Macquarie application form for an upcoming loan. I wonder if it will be an immediate winding back? Will make enquiries.
Boy it's getting interesting is'nt it? I don't think anyone would have guessed this type of flow on/results a year or two ago. i wonder how long it will be before all the lo-doc rates reflect this as well, as some lenders are offering quite good rates still on the lo-doc loans, whereas no doc was/is a smaller market obviously. I wonder………….
Rockian
You have until this Friday to have a loan lodged and approved or it will be rejected.
To be honest if it is for a lodoc loan you can do a lot better than Mac Bank anyway.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:RockianYou have until this Friday to have a loan lodged and approved or it will be rejected.
To be honest if it is for a lodoc loan you can do a lot better than Mac Bank anyway.
Fortunately I can handle rejection Richard. I have had plenty of practice over the years.
Ian
Lol Ian i love the positive spirit.
Richard Taylor | Australia's leading private lender
So does this mean, if i already have an existing Macquarie Home loan, and wish to buy another property in the coming weeks, I cant get that new loan through Macquarie?
Yes only top ups to existing loans are being considered with no new lending.
They closed their doors last Friday and the State Manager tells me that future deals need to be done on a full doc basis only with Nodoc / Lodoc products being withdrawn.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Yes only top ups to existing loans are being considered with no new lending.They closed their doors last Friday and the State Manager tells me that future deals need to be done on a full doc basis only with Nodoc / Lodoc products being withdrawn.
Richard, what do you mean by top ups? I already have a no doc loan with Macquarie for the purchase of a block of land. I now want to construct a house on the land. Will the construction loan be considered a top up?
Yes it will and maybe ok but it will not be considered on a Nodoc basis only full doc from now on in.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Yes it will and maybe ok but it will not be considered on a Nodoc basis only full doc from now on in.Are you sure Richard?
I have just discovered that a low doc loan contract – (Perpetual Trustees as Lender) – that I am just about to sign is being funded by Mac bank. It is for a block of land that I will be constructing a duplex on in a few months. Are you saying that I have to go full doc to get the construction loan?
Ian
Lodoc maybe different but not Nodoc.
Easiest thing is ring them ask them.
All I am going by is from the information release they put out to us Brokers.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Lodoc maybe different but not Nodoc.Easiest thing is ring them ask them.
All I am going by is from the information release they put out to us Brokers.
I will investigate tomorrow and report back.
Thanks, Ian
PMI have also removed their Nodoc 70% one day ABN product as well since the start of the year.
Thanks for the info Richard,
I have Macquarie lo doc loans as well. A LOC and a separate basic loan for an investment property.
The LOc jumped up .4% last week, which I expected, but the other loan up .7%!
I have also been looking to buy another IP with 20% coming fom LOC and taking another loan…….
I now have my business financials up to date so can apply for regular loans.
Which way would you go?
Change my Mac loans to regular and take any new loans with other banks….
This option would probably start a new five year period of pay out penalties and their rates seem to be skyrocketing
OR;
Bite the bullet and refinance the whole package with a major bank, something like a Portfolio loan from NAB
Any other suggestions would be appreciated.
Cheers,
SueHi Sue
Difficult to say without all of the facts and figures on your personal circumstances.
Howeer in saying that i would hesitate before you jump in with the NAB.
They have a place in the market which is usually when you cant a loan to fit elsewhere but certainly not for a clean full status client. You can certainly do a lot better.Richard Taylor | Australia's leading private lender
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