GE Money has angered mortgage managers by refusing to pass on any part of the 1% rate cut recently announced by the Reserve Bank. It did, however, pass on an 80 basis point cut to its own mortgage manager – Wizard.
An e-mail to mortgage managers obtained by The Australian Financial Review from managing director of third party solutions Mark Rice, revealed that the wholesale funder would not be following the banks' decision to pass an 80 basis point cut.
Rice told managers that although GE Money is funded with the support of a guarantee from its AAA-rated parent company, it is not immune to the higher costs of funds.
No suprise there.
GE attract their funds from the US and the credit crunch is showing now sign of abating there.
Wonder how all those Wizard franchises are doing now.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:No suprise there.GE attract their funds from the US and the credit crunch is showing now sign of abating there.
Wonder how all those Wizard franchises are doing now.
I understand so many have simply walked away form their hard worked for / money thrown into / nothing given back franchises, particularly around sydney.
The others? Sitting back waiting to see which bank ends up picking them up for a bargain price, which will then pretty much cement the death of the more serious non bank lenders in australia………………..Phew, almost sounds like a eulogy.Non-bank lenders that haven’t passed on the interest rate falls are under public scrutiny, particularly GE Money. Yes Home Loans Managing Director Lee Boueri explains the situation to John Stanley on 2UE:
Live long non-bank lender….
Pity to Wizard franchisee… they lost $$$$$$
their products are NOT competitive at all…
Where are Mark Bouris or Aussie JOHNS who always talking RUBBISH wanna to challenge the banks…..???Rumour mill is saying that NAB will make a bid for Wizard in the next 48 hours so be interesting to see what happens.
Richard Taylor | Australia's leading private lender
GE What a RIP OFF. Get you in with competitive rate and then in one cunning move become worse than the big banks. With more rate cuts looming I have no confidence in a company that basically saying its funding sources are in trouble. I don't like getting conned so I see two options.
1 , Wait for the governement's policy on lower exit costs and then make a swap
2. Refinance immediately and cop the cost to get a much much bigger gain in the future. Can refinance at 0.85% lower rate (7.55%) available at ANZ's One Direct. Could soon be 1.35% lower if Fed cuts another 0.5%. That's $280 month currently and possibly $450 / month saving. On a typical $400K 20 year loan that's $426K in total interest vs $376K, a saving of 50K.
I have requested a call from GE to discuss my loan but have had no reply.Any suggestions?
jb01
Hate to ask what is the DEF or early repayment penalty with GE ?
Richard Taylor | Australia's leading private lender
"GE Money will close its operations in Australia with immediate effect, according to inside sources."
http://www.lendingcentral.com/2008/10/24/ge-money-closes-its-doors/Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Wizard or GE money just about to open their own graveyard.
Where is Mark Bouris, Aussie John etc… who always talk rubbish… !!! But they made billions from poor borrowers (being persuaded to borrow from their 'competitive' rate)
Qlds007 wrote:jb01Hate to ask what is the DEF or early repayment penalty with GE ?
Can be up to 1.80% of the loan amount if repaid in the first year.
Reduces to nil after the 5th year.
Joseph
That sounds cheap. I remember at one stage Bluestone, another non-conforming lender (now gone) was charging up to 4% DEF in the first year.!!!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Joseph
That sounds cheap. I remember at one stage Bluestone, another non-conforming lender (now gone) was charging up to 4% DEF in the first year.!!!
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
What happens to exsisting GE clients? unfortunately i'm one…have my IP with them,,,worst to deal with (both $$ and service)
Thanks,
"You LIVE …..You LEARN"
I'm with GE too and was just looking at transferring out before all this happened. Was quoted a $3,470 exit fee. Man, wouldn't it be nice if the exit fee was waived and i could get a rate 2% cheaper than l'm on currently!! It would certainly take the pressure off.
Hi Susie
I hate to say i doubt they will waive the fee.
Depending on the size of the loan and the other details could still be worth swallowing and refinancing away to a cheaper rate.Richard Taylor | Australia's leading private lender
Susie,
Its not just the exit fees, you also have to look at the LVR, i'm at 90% , so i'll have to pay LMI again to switchover.but i think it might still be worthville shopping around!
Richard, your thoughts and advice will be appreciated.
Thanks,
JaideeJaidee
Yes l have taken that into consideration but it shouldn't be an issue for me. I was looking at One Direct (ANZ only online) which have a variable rate (& comparison rate) of 7.55%. There are also fixed rates of 6.99% going around as well. Also only $310 max to switch over (assuming no LMI) & no ongoing fees. Hopefully l might get it right this time.
Cheers
SusieHi Susie
Hate to say the switch fees will be a little more than that.
You will have mortgage registration, transfer and discharge, bank title search fees, valuation and settlement fees etc.
Not sure if the to loan is an investment loan but if either way One Direct do not offer a offset account.
The Anz Simplicity product has a rate of 7.62% so is hardly worth dealing on line for such a small margin saving and at the end of the day at least dealing with the Bank you can start to structure your loan in a way that it will help grow your portfolio.On t
Richard Taylor | Australia's leading private lender
Hi Susie
Hate to say the switch fees will be a little more than that.
You will have mortgage registration, transfer and discharge, bank title search fees, valuation and settlement fees etc.
Not sure if the to loan is an investment loan but if either way One Direct do not offer a offset account.
The Anz Simplicity product has a rate of 7.62% so is hardly worth dealing on line for such a small margin saving and at the end of the day at least dealing with the Bank you can start to structure your loan in a way that it will help grow your portfolio.On t
he f
Richard Taylor | Australia's leading private lender
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