'Self-employed' tag on many Tasman loans

…the same thing happened to hundreds of other people, enabling them to get loans through Tasman Mortgages that they should never have qualified for. Tasman was owned by Blue Chip at the time many of the loans were written.

The New Zealand Herald
May 8, 2008

'Self-employed' tag on many Tasman loans

Maria Slade

A 70-year-old retired Christchurch woman's occupation was described as "self-employed" on a mortgage application form so she could get a loan to invest in Blue Chip.

Her son, a mortgage industry professional, believes the same thing happened to hundreds of other people, enabling them to get loans through Tasman Mortgages that they should never have qualified for. Tasman was owned by Blue Chip at the time many of the loans were written.

Darryl Philpott is co-ordinating a group of people who are now struggling to pay those loans following the collapse of the Blue Chip property investment scheme.

"The stories I'm being told from everyone over [in] New Zealand is that their Blue Chip adviser did the application for them, they were told they had to be self-employed otherwise [they] couldn't get the loan through."

Philpott knows of a truck driver who listed his occupation correctly on the application form, only to be told by his Blue Chip adviser that it would have to be changed to self-employed to get the loan approved.

Philpott said his superannuitant mother Helene's annual income was $10,000 when she entered into a Blue Chip joint venture agreement in 2006. He said the application for the $166,000 no-doc Tasman loan she took out on her house was filled out by her Blue Chip adviser.

No-doc loans are designed for self-employed people who can't provide financial statements, and instead sign a declaration confirming they can meet the loan repayments.

He said the family had no idea it was a no-doc loan, and believed the mortgage payments were indemnified by Blue Chip under the terms of the joint venture.

Tasman Mortgages was the manager of the loans, not the lender. Entities owned by finance company GE Money were the lenders behind many of the loans, including Mrs Philpott's.

John Grant, director New Zealand business for GE Money Home Lending, confirmed a retiree on $10,000 would not qualify for a no-doc loan.

Grant said GE Money, not Tasman, was the one managing the collections on the business and it would be interested to see any such documents.

"These loans are getting very close scrutiny from us. We were not part of any of the Blue Chip decisioning, we were just presented with loans of which we had a criteria and if it met that criteria we would accept them."

Grant said GE Money did see all documentation relating to a loan, and did check to see that it met its requirements.

Helene Philpott entered into a joint venture with Blue Chip to buy a $420,000 apartment in the QuBa development in central Auckland which has yet to be completed. However, the agreement has fallen over with the demise of the Blue Chip group, and her son believes the apartments have been onsold to other investors. His mother's deposit was not held in a solicitor's trust account.

It's estimated 80 per cent of all lending to Blue Chip investors was done through Tasman Mortgages.

Tasman is now owned by Lombard Group, parent company of the failed Lombard Finance.


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