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ISCOVER
RAMS reduced to rubble, Challenger buys up half of the mortgage broking industry and the US sub-prime storm engulfs the lending world – Mortgage Business looks back over the significant events of 2007.
January
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• HSBC Australia sells $2.2 billion (or one third) of its broker-sourced residential loans to mortgage wholesaler FirstMac for “tens of millions”
• The sharp rise in US home foreclosures in late 2006 pushes the global credit crisis into motion
• GE Money launches its suite of new prime products to the broker market called Flexible Options
February
• The MIAA changes its name to the MFAA (Mortgage and Finance Association of Australia)
March
• Fincorp Group is pushed into administration – owing its 8,000 investors $200 million
• Adelaide Bank and real estate fund manager Rismark International launch Australia’s first private-sector shared equity mortgage product
April
• Insolvency and Trustee Service Australia (ITSA) releases figures indicating skyrocketing bankruptcy – 6,585 people filed for bankruptcy in the March quarter, up 8.9 per cent on the same period the year prior
May
• Challenger acquires a 40 per cent share in Homeloans Ltd
• Wizard Home Loans commences operations as a franchise to facilitate expansion plans
• First issue of Mortgage Business hits inboxes
June
• A Booze Allen Hamilton survey rates Australian banks’ service at number 13 out of 17 leading OECD countries
July
• RAMS Home Loans Group Limited lists on the ASX quoting approximately 354 million shares, issued at $2.50 each.
• GE Money offloads its sub-prime mortgage business in the US as foreclosure numbers begin to soar
• Broker group City Pacific acquires mortgage manager Australian Beneficial Finance
• Basis Yield and Absolute Capital funds are named as the first Australian casualties of the sub-prime mortgage blowout in the US
August
• Interest rates are lifted by 25 basis points to 6.50 per cent – the RBA’s first rate rise since November 2006
• RBA pumps $4.7 billion into the money market to stabilise short-term interest rates and to ensure sufficient levels of liquidity are available to Australia’s financial institutions
• The Lending Industry XML Initiative (LIXI) partners with Microsoft to simplify the automation and application of loan processing procedures
September
• Challenger Financial Services Group ups stake in mortgage industry, purchasing 100 per cent of Choice Aggregation Services, 19 per cent of FAST and announces it will purchase the remaining 85 per cent of PLAN Australia that it doesn’t already own in 2008
• Mortgage providers and consumer groups form a new coalition to push for a crackdown on predatory lending practices
• Capital First completes its transformation into a specialist non-conforming lender with the sale of its prime mortgage portfolio to Firstfolio Ltd
• UK lender Victoria Mortgages becomes the first UK lender to be crushed by the credit squeeze and goes into administration
• UK lending giant Northern Rock applies to the Bank of England for emergency financial support as the credit crisis spreads
• Macquarie PUMA prices a $500 million RMBS bond issue – the first to be priced since the credit crunch took hold in August
• NSW home buyers and property investors’ mortgage duty is abolished, coupled with land tax cuts
• Research by Trowbridge Deloitte shows Australia’s reverse mortgage market to have sky-rocketed to $1.8 billion over the past year
October
• Westpac Bank snaps up non-bank lender RAMS Home Loans Group’s (RAMS) franchise distribution business for $140 million
• ANZ Bank shelves plans to sell its $7 billion wholesale mortgage business, Origin Mortgage Management Services
• The Commonwealth Bank and Australian Housing Association (HIA) Index declare housing affordability to be at its lowest in 23 years
• Pepper Homeloans shelves two products and axes 19 staff members as the capital markets continue to hurt securitised lenders
• X Inc Finance merges with Ray White Group’s Electronic Mortgage Origination Channels of Australasia Pty Ltd (eMOCA) to create a new mortgage business boasting an $8 billion loan book
November
• Mortgage Business launches first print publication for Australia’s mortgage lending industry
• Interest rates move north again, taking the official cash rate to 6.75 per cent – where it currently remains
• Bendigo and Adelaide Bank merge is finalised with a resounding 97 per cent of Adelaide Bank’s shareholders supporting the deal
• ABS announces that the total assets of Australian securitisers at the end of the September quarter fell by 0.6 per cent or $1.5 billion from the June quarter – the first fall in 12 years.
• The ALP sweeps John Howard and the Liberal party out of office
December
• Australian securitisation prospects are boosted as Pepper Homeloans successfully prices a $200 million RMBS issue – the first for the sub-prime sector since the August US sub-prime crisis
• Adelaide Bank lifts interest rates by 25 basis points for products across its wholesale lending program – the first of the major banks to pass on the increased cost of funding above the RBA’s rate rise
• Final provisions of the AML/CTF come into affect
