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ISCOVER
Jessica Darnbrough
Firstmac’s Kim Cannon has made it very clear he plans to sue Columbus Capital for altering terms relating to home loans.
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At the end of last year, Columbus Capital bought a $2.2 billion portfolio of mortgages from ANZ’s wholesale business Origin.
The residential mortgages were not originated by ANZ but by a group of 20 non-bank lenders, including Firstmac.
Following its acquisition of the $2.2 billion loan portfolio, Columbus Capital choose to ignore the contractual agreements that the non-bank lenders had in place with ANZ Bank via the Origin subsidiary – specifically in relation to locked-in costs of funds that date back longer than 10 years.
In addition, Columbus Capital is said to have raised the funding costs to the mortgage managers by as much as 160 basis points.
This ultimately had the effect of removing the majority of the mortgage managers’ management fees received on their portfolios.
Firstmac’s Kim Cannon told The Adviser that Columbus Capital’s actions is ultimately costing the non-bank lender upwards of $70,000 a month – something the lender hopes to rectify through the courts.
“I have spoken to a number of non-bank lenders who have also briefed lawyers to take action. We all have the same legal advice that Columbus Capital’s actions are unlawful,” Mr Cannon said.
“This is theft by a foreign-owned company in Australia, pure and simple. Columbus Capital’s arrogant and dismissive behaviour has upset a lot of people. They can’t be allowed to get away with it.”
