![]() ![]() Liberty's interest rate charges can go up by 4 per cent if the interest is not paid. And the non-conforming players are prepared for a borrower to hit trouble. To compensate, the lenders demand thousands of dollars in upfront fees and charge annual interest payments that can be double a normal bank loan. In the non-conforming mortgage sector, loan default rates can be 10 times more than what is experienced by a bank. Clearly because they have the asset securing the loan they know they will get paid one way or the other." "We do see cases where Liberty has been the lender and at the time of the loan going through we have just wondered how the person is ever going to pay it back. "As long as Liberty gets their money back that's a more important consideration than the product being offered," he says.Ĭarolyn Bond, manager of Victorian Consumer Credit Legal Service, questions how Liberty is trying to position itself as the battler's friend. "There is no love lost between an agency like this one and Liberty Financial," says David Tennant, a director of Care Financial Counselling Service in the ACT. Further, they say that lenders such as Liberty are quick to take possession of a mortgaged asset when the borrower hits trouble. They say that the concept of a non-conforming loan is just a euphemism for loans extended to those that have already shown they have little ability to manage credit. ![]() ![]() I don't believe there is any such thing as a mature market as long as you are being innovative."īut some consumer-interest groups don't share Ma's enthusiasm. Liberty has a net asset value of $71.6 million and is expected to float at a valuation of up to $700 million. Liberty Financial, one member of the Liberty group, produced a 27 per cent increase in net profit to $24.7 million last fiscal year, according to accounts filed with the Australian Securities and Investments Commission. Ma has certainly come a long way since he started offering mortgages from a mobile telephone while sitting on his bed at the Hotel Claremont boarding house in the Melbourne suburb of South Yarra eight years ago. This week Liberty launched the country's biggest securitisation of non-conforming mortgage loans, a $1.15 billion portfolio with global investment banks Credit Suisse First Boston and Deutsche Bank marketing the securitisation to institutional investors such as pension funds, government agencies and money managers around the globe. He is helping consumers stay away from less scrupulous lenders that advertise in the back pages of the tabloids and helping to consolidate a variety of loans "piled" on customers of the banks. If there are misunderstanding about our business there is not much we can do about it." "We are pushing the frontier, establishing new markets and products for those who have very unattractive options and we are having fun. He does not care about the consumer groups that have attacked his non-conforming lending practices, which can include annual interest rates as high as 23 per cent on loans for cars. He says he is part of the solution and not the problem that is Australia's private sector debt binge. He says Liberty Financial, the specialty lender he founded eight years ago, offers a sophisticated solution to thousands of people who may not have a pristine credit history, be reliant on social security payments, have irregular income or want more money than a bank is willing to lend. Sherman Ma riles against the suggestion that he is the biggest fish in a dirty pool lending money to those that can't get cheaper finance from Australia's banks. By taking on clients the big banks wouldn't touch, Sherman Ma has ridden the housing boom to build a lender with a loan book of almost $3 billion. ![]()
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