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MFAA Prosper : Mortgage and Finance Brief 05
One of the largest non-bank lenders in Australia, RESIMAC is confident of the strength of its offering in the competitive housing mortgage market as it reaches a significant milestone in its history. Words Ann-Maree Moodie The company was originally created to serve and to securitise residential loans for HomeFund, a NSW Government housing program under the name of FANMAC. Since then, RESIMAC has evolved into a leading wholesale lender providing a competitive alternative to traditional bank mortgages. "We are a public, unlisted company with a full mortgage product suite, a global funding platform and a team of dedicated professionals to ensure that our products, technology and RMBS program are the best in market," explains Allan Savins, Chief Operating Officer, RESIMAC. Creating competition RESIMAC was instrumental in driving the transition from the traditional home loan market, dominated by the big banks, to the more diverse market of today where 40% of loans are generated by third party distribution. "A strong non-bank sector is vital in order for there to be competition in the Australian lending landscape and for consumers to have a choice when looking for a home loan," says Savins. "The emergence of the non-bank sector in the early 1990s correlated into a significant reduction in interest rates charged by the banks, coupled with innovative products on offer and underpinned by superior customer service." RESIMAC played a key role in developing the third party intermediary market during this period, through its wholesale distribution partners who in turn historically sourced their business from the mortgage broker market. A helping hand for consumers "RESIMAC has also made it possible for many consumers to obtain a home loan despite not meeting traditional lending requirements, similar to the original objective of FANMAC when created back in 1985," says Savins. "Providing lending alternatives to niche segments of the market such as the self-employed and the credit impaired, all the while distributing these products through mortgage managers, has played a significant part in the growth if the mortgage broking industry. "There are a limited number of lenders that can claim to have continuously supported the role of mortgage brokers and mortgage managers for such a long time, and we never once stopped new business lending throughout the GFC." The early days RESIMAC found its genesis in the mid-1980s when inflation was high and interest rates skyrocketed to record levels of 18%-19%. The financial sector -- especially building societies -- were deeply impacted by capital rationing, leaving low income earners shut out of home finance. In response, the NSW Government formed the First Australian National Mortgage Acceptance Corporation, (FANMAC), and imported the US securitisation model to Australia. The NSW Government guaranteed mortgages. Later, when the FANMAC program was wound down, RESIMAC celebrates 25years “ RESIMAC has made it possible for many consumers to obtain a home loan despite not meeting traditional lending require- ments. ” 34 | Mortgage & Finance brief InProfile
Mortgage and Finance Brief 06