Firstfolio ready to enter Mortgage Lending
In a move that would give it a foot-hold on the non-bank mortgage lending market, mortgage and financial services company Firstfolio Limited (ASX: FFF) is in exclusive negotiations to acquire a controlling stake in non-bank mortgage lender Calibre Financial Services Pty Ltd for an undisclosed price.
After a string of acquisitions which includes Apple Home Loans, First Chartered Capital, Loan Services Australia, Xplore Capital, eChoice and assets of Leasechoice, Firstfolio’s chief executive Mark Forsyth said the company now has the scale to enter the non-bank lending market and take advantage of a growing appetite among institutions for RMBS (Residential Mortgage Backed Securities) issues.
“In acquiring an interest in Calibre, Firstfolio gains a securitised lending platform that will give us additional options over funding, product and pricing of residential mortgages as a non-bank lender. It will be a great supplement to our existing lines.” said Mr Forsyth.
Sydney-based Calibre started operations in 2005 has a combined loan book of $440m with a warehouse funding line from a major Australian bank. Calibre entered the Australian securities market in October 2007 with its initial $200m RMBS issue which was well supported by a broad cross section of predominantly domestic investors.
Firstfolio Limited is a mortgages and financial services distribution business, listed on the Australian Securities Exchange under ASX code: FFF. The company offers a diversified range of mortgage lending, aggregation, processing and managing solutions, across the full cycle of the loan, through its national network of mortgage brokers, affiliates and related-industry partners, and eChoice – Australia’s leading online mortgage brand.
As a testament to its mortgage lending ability and flexibility, Firstfolio announced in March 2011 a 3-year $23 million senior debt funding agreement with the Commonwealth Bank of Australia to extinguish minor debts to ING an Adelaide bank, pay out financing agreements to the vendors of eChoice and Domain Financial Services, and retire $8.9 million from the balance of loan owing to Welas Pty Ltd.
Majority of Firstfolio’s income is derived from the residential mortgages sector, where it offers aggregation, wholesale lending and management services to a national network of brokers, partner firms and home loan consumers. Firstfolio also offers property-related and financial service solutions including equipment finance, real estate leasing bonds, fee funding, property investment, professional services and insurance.
Loans under management (LUM) have grown to over $21 billion since Firstfolio was founded in 2006 – making it one of Australia’s largest independent platforms for the delivery of financial products and services. It has secure lines of funding through a range of wholesale lenders including ING, Advantedge and Adelaide Bank.
Calibre operates its own fully integrated technology platform, developed in-house by Calibre executives with proven track records in delivering IT solutions. Built on today’s technology for today’s market and product needs, the platform provides the foundation for Calibre’s comparative advantage. Since commencing operations in 2005, the Calibre platform has originated $1 billion in mortgages.
A controlling stake in Calibre brings Firstfolio closer to its goal to generate long-term earnings growth by developing the largest independent distribution platform in Australia and expanding its range of products and services, including life insurance, mortgage protection, asset finance and financial planning.
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