Published 6 May 2008
The Securities Commission said today a replacement broker it appointed to manage the loans of 3 separate contributory mortgage companies had recovered most of the principal & interest in 40 mortgages.
Recovery of principal for the remaining 6 mortgages ranged between 22-91%.
Investors had put $82 million into the 46 mortgages at NZ Commercial Mortgage Brokers Ltd (struck off in 2002; directors Bryn Evans & Jefferson McIntyre, Christchurch), Harts Contributory Mortgages Ltd (ex-Reeves Moses Hudig Mortgage Brokers Ltd) & General Mortgage Brokers Ltd (struck off in 2006; director Sydney Davies, Hamilton)
The commission appointed Crichton Horne & Associates Mortgage Brokers Ltd, of Christchurch, to manage the mortgages of NZ Commercial in 2001, Harts in 2002 & General in 2003. Commission chairman Jane Diplock said Crichton Horne sold properties held as security for the mortgages. In some cases it pursued guarantees for loans and took legal action against the directors of the contributory mortgage broking firms and the valuers who valued the properties.
“The commission is pleased with the level of recovery for investors. This is partly attributable to the buoyant state of the property market when the properties were being sold. Care needs to be taken with valuations supporting contributory mortgage investments, particularly in the current less buoyant property market.”
Crichton Horne also managed the full recovery of principal & interest on the $27 million Parliament St mortgage offered by The Mortgage Financier Ltd. This matter was referred to Crichton Horne in 2002.
The commission can appoint a replacement broker for contributory mortgages where it is satisfied a contributory mortgage broker has contravened the Securities Act or regulations, and that the appointment is in the public interest. The commission doesn’t have this power in relation to other types of investments.
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Attribution: Company statement, story written by Bob Dey for this website.