90 yr old faces losing her home over Blue Chip - report

…pensioner dreams she is being dragged from her home, kicking and screaming…Mrs Harrison now faces eviction from the home she has lived in for 60 years after receiving a notice on Monday night demanding more than $8000 in mortgage arrears.

The New Zealand Herald
May 21, 2008

90 yr old faces losing her home over Blue Chip - report

Juliet Rowan and Anne Gibson

Gwendoline Harrison is plagued by nightmares about losing her home.

Since learning she owes more than $300,000 as a result of the Blue Chip collapse, the 90-year-old Tauranga pensioner dreams she is being dragged from her home, kicking and screaming.

"I've imagined terrible things," she says. "I feel awful about it."

Mrs Harrison now faces eviction from the home she has lived in for 60 years after receiving a notice on Monday night demanding more than $8000 in mortgage arrears.

Her daughter, Margaret Rasmussen, said the delivery of the notice by an agent for financiers TEA Custodians was terrible for her mother.

"She said she was going to die during the night," Mrs Rasmussen said. "She was so down."

Mrs Rasmussen, 68, lives next door and is in the same situation as her mother.

The part-time music teacher also faces eviction from her home for failing to pay a mortgage she took out to invest in a Blue Chip apartment she says was never built.

This morning, members of an organisation which says it is helping victims of the Blue Chip collapse door-stopped an Auckland solicitor over Mrs Harrison's woes.

Two representatives from the lobby group Exposing Unacceptable Financial Advice visited Nicola Robertson, a solicitor at Sanderson Weir, to seek help for the 90-year-old.

Suzanne Edmonds and Alan Moore of the organisation said they wanted to speak to a solicitor at the firm over $313,401.95 they said Mrs Harrison had borrowed from TEA Custodians via Blue Chip using her house as security.

TEA, as mortgagee, gave notice to Mrs Harrison that she must immediately pay $8320.20 for the loan which was in default. The notice was issued under the Property Law Act 2007 and said if payments were not forthcoming, the lender had the power to take possession of Mrs Harrison's property and sell it.

But Mrs Harrison never intended to pay the money back because she understood Blue Chip would take care of that, Ms Edmonds said. The arrangement was that Blue Chip would make repayments and Mrs Harrison never expected to get demands for payment.

Ms Edmonds said lawyers at Sanderson Weir were instructed and the documents served on Mrs Harrison this week.

But Ms Robertson of Sanderson Weir told Ms Edmonds that the law firm used an agency to serve documents and she sought more information in the matter, particularly from the lawyer representing Mrs Harrison, so the matter could be resolved.

Ms Edmonds said afterwards she was dissatisfied with the response.

"They're just passing the buck," she said.

The document server had insisted on going to Mrs Harrison's bedside when she was ill with the worry about the investment, Ms Edmonds said.

More than 2000 investors are owed at least $80 million by various Blue Chip companies now in liquidation. The Auckland-headquartered business cold-called older people, encouraging them to use their homes as security for Auckland apartments, some of which were never built.

Grant Liddell of the Serious Fraud Office announced on Friday that both Blue Chip and Bridgecorp were under investigation. The Blue Chip case raised a wide variety of issues, including allegations that misrepresentations were made to investors about the security of their funds and that the money was used in ways contrary to the terms of the investment, Mr Liddell said.

Lloyd Hayward, a Blue Chip liquidator, said investors facing action should get professional help.

"They need to take legal advice," Mr Hayward said.

Commerce Minister Lianne Dalziel this morning gave an impassioned plea for lenders owed money by Blue Chip investors not to make demands until investigations are complete.

Blue Chip issues include allegations that misrepresentations were made to investors about the security of their funds, and that funds were used contrary to the terms on which investors put their money in.

Ms Dalziel told Radio New Zealand this morning there was a "very strong moral obligation on the part of all of those that were involved in either advising or lending on these arrangements".

She said there was a duty care owed to people.

"Who in their right mind would advise a 90-year-old that it was okay to mortgage her family home in order to invest in a property arrangement? Where were the lawyers?"

Ms Dalziel said lawyers had sent Mrs Harrison papers including a venture agreement, deed of trust, deed of nominations, trustee and shareholder, directors' resolutions and confidentiality agreement and paperwork to establish an incorporated company.

"This is a complex legal arrangement and to organise this with someone who is not in a position ever to be able to stand on her own two feet and repay should the deal fall over is completely and utterly inexcusable."

Ms Dalziel said people involved in the Blue Chip failure needed to be held to account and she pleaded to those who held mortgages to hold fire until investigations finished.

"All I am saying to those companies please hold off until any transactions of this nature until the investigations are complete because there will be people who will be held to account, there will be professional indemnity insurance holders who will be required to pay up on some of the shonky advice that has been given and I think that we should really enable these people to sleep at night while these things are sorted out."

- NZPA


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