LJ Hooker Home Loans CEO Paul O’Regan has clarified the role that embattled RAMS founder John Kinghorn plays in the business.
Late last year, The Adviser broke the news that rich lister and mortgage tycoon John Kinghorn had returned to the home loan business through his ownership of LJ Hooker Home Loans.
“John [Kinghorn] and myself saw a huge opportunity,” said chief executive Paul O’Regan at the time.
This week, the Australian Federal Police (AFP) charged Mr Kinghorn with fraud for allegedly avoiding tax obligations worth more than $30 million.
Mr O’Regan, who was head of franchising at RAMS between 2000 and 2010, told The Adviser that Mr Kinghorn has no involvement in the operational side of the business.
“John is a director and a shareholder but has no involvement in the day-to-day running of the business or the strategic direction of the business,” the CEO said. “He leaves that to me and my team.”
LJ Hooker Home Loans has been steadily recruiting franchisees over the last 12 months and now has 17 outlets across the country. Mr O’Regan said that the group is on track to grow this number to 25 franchisees by the end of the year.
“[John Kinghorn] has never met any of these new franchise owners,” the CEO confirmed.
Return of the monoline model
The LJ Hooker Home Loans mortgage business is more aligned to the mortgage management models of yesteryear than the modern brokerages of today. The group only offers its own branded white label mortgage products, similar to the original RAMS model that John Kinghorn established in the early nineties.
Non-bank mortgage managers have since evolved into the modern-day mortgage broking models that we know today, where customers are offered a suite of products from a panel of different lenders.
But Mr O’Regan is confident that the monoline model will work.
“We have very competitive products and great turnaround times and servicing. We have a maximum 48-hour turnaround time with our funding partners. Generally, funding is received within two to three hours.”
Macquarie Bank, Advantedge and Pepper provide the group’s funding while Connective is an aggregation partner CRM provider.
“We know that brokers have access to a panel of lenders. The reality is 80 [per cent] or 90 per cent only use two lenders anyway,” Mr O’Regan said.
“With our funders, brokers can become an absolute specialist. They are not going to be inundated and having to stay accredited with all these different lenders.
“It also eliminates channel conflict, which is very important.”
Mr O’Regan said that LJ Hooker Home Loans is aiming to grow its network to 30 franchisees by March 2018.
[Related: AFP charges RAMS founder with fraud]
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