GE Money has today announced it will suspend a number of its mortgage products and features including its Flexible Options range of prime products.
Managing Director of Home Lending, Lisa Davis, was quick to dismiss any link between the GE Money restructuring and global liquidity issues however she did concede that GE Money was “not immune” to the global rising cost of funds.
“The changes we are making reflect the current market environment and balance our commitment to provide competitive solutions for customers and provide an acceptable return on equity for shareholders,” she said.
Fixed rate options on new business and construction loans have also been suspended while a minimum $100,000 level has been applied to its GE Money white label products.
The changes take effect from close of business Thursday October 2.
GE Money first entered the prime lending space in late 2006 when it launched its new prime range of products Flexible Options via the third party channel.
However in a competitive market, GE Money has failed to persuade brokers to abandon the major banks in favour of its prime range.
“Flexible Options probably accounts for less than 10 percent of our volumes,” Ms Davis told Mortgage Business.
“We’ve never been able to achieve the required scale in the prime space.”
But while GE Money has struggled to gain traction in the prime market it has seen considerable growth in its core third party business.
GE Money now claims that it now accounts for 50 per cent of the non-conforming market, as other specialist lenders have either exited or scaled back operations.
There has also been substantial development in GE Money’s white labelling business.
Ms Davis said that GE Money will now focus on its traditional strengths and will redirect resources towards its non-conforming and white labelling offering.
“We’re now focusing on the areas of the business where we have scale and what we know we are good at and we remain committed to the third party channel.”
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