RMI investors offered refunds
The new Australian owners of Harts Reeves Moses have discovered that investors in $19 million worth of the firm's contributory mortgages faced the prospect of losing up to 20 per cent of their contributions.
Thursday, March 30th 2000, 12:00AM
Brisbane-based Harts Group says that a pre-listing internal audit revealed that "a number (of the mortgages) contained breached of the Contributory Mortgage regulations, some of which could have resulted in a loss to contributors."
Harts Reeves Moses and its former owner, ASB Bank subsidiary Sovereign, are offering investors a chance to get all of their money back.
The two companies have offered to buy back from contributors their investments in about $19 million worth of under performing loans, which represent about 15 per cent of the mortgage portfolio.
The offer is open for two weeks and allows investors to get their original investment back, plus the 10 per cent interest due to them.
They have also ensured that contributors in other contributory mortgage loans that underperform as a result of breaches will not lose any money.
The extent of the losses will not be known until all the loans mature in between nine months and three years, however Harts Reeves Moses and Sovereign say will absorb any losses.
Most of the loans cover commercial property developments in Auckland. The audit revealed that some of the loans were for more than the developments are now thought to be worth.
In total the average investor affected had between $20,000 and $30,000 in each mortgage.
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