Banks seek help managing mortgage arrears

Bluestone Mortgages, a provider of non-conforming mortgages, told the Australian that the company had been in discussions with some banks about providing arrears-management services. Bluestone chief executive Alistair Jeffery said “there is a bus smash waiting to happen in terms of the pricing of the risk that some lenders are taking on and the lack of preparedness to handle the arrears.” Sherman Ma, managing director of Liberty Financial, another non-conforming lender, said banks were seeking to win market share in this segment. According to Ma, 20 per cent of Liberty's “seriously delinquent” loans (or those more than 90 days in arrears) were being refinanced by traditional financial institutions, largely the big four banks, according to the Australian.