Estate: Private Investigator Has Information
Sydney Morning Herald
Sunday April 22, 1990
A private investigator is expected to provide information about Estate Mortgage to the Corporate Affairs Commission this week, as the examination of the mortgage trust fund's operations deepens.
The investigation, reported on Channel Nine's Business Sunday, follows on other reports that developers which borrowed from the group may be preparing to take action over Estate's failure to meet progress payments.
Estate, meanwhile, has warned borrowers that all maturing mortgages held by the group will not be rolled over, forcing many mortgagees to either refinance or sell up.
Estate director Mr Richard Fisk said the group had put borrowers on notice, and believed the majority would be able to refinance despite the difficult market.
To provide liquidity Estate has said it would sell off mortgages to repay the $50 million in outstanding redemptions. Funds are also expected from an estimated $130 million in loans which mature in the next three months.
Mr Fisk would not confirm the number of mortgages maturing, but said they would represent a "fair proportion" of Estate Mortgage's portfolio - not as high as 50 per cent, but more than five per cent, he said.
"We are now saying because of the circumstances that have happened, that we have found ourselves in, because of the moratorium being placed on the Trust, that we are going back to those borrowers and saying we now are in a position where we believe that you have to refinance," Mr Fisk said.
He told the Business Sunday program that Estate was very confident it would be able to "get out" of all its mortgages despite the tough market, and that negotiations to do so where taking place.
He added that there would be an announcement of progressive sale of mortgages and the sale of some properties soon, after talks with bankers involving the reduction of its $170 million in debt.
Estate Mortgage, Australia's largest mortgage trust manager, won an 11-week moratorium on redemptions from the Corporate Affairs Commission 10 days ago, after some $100 million in redemptions since December sparked the liquidity crisis.
Talks were held in the week preceding the move by the CAC with other mortgage trust fund managers willing to inject liquidity into Estate in return for their mortgages.
Those managers have since revealed that they were looking only for mortgages which "met certain criteria". Global Funds Management's Mr Grant Smith said yesterday that it rejected a proposal to buy one of Estate's development site mortgages.
"We have a fairly rigorous criteria as far as mortgages are concerned, and we are an originator of mortgages for the secondary market.
We need to have mortgages that produce income every month."
© 1990 Sydney Morning Herald