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ISCOVER
Jessica Darnbrough
The sale of Refund Home Loans could be finalised within the next fortnight, Independent Mortgage Professionals (IMP) has claimed, thanks to the backing of a major non-bank lender.
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Speaking to The Adviser, a spokesperson for Independent Mortgage Professionals said Homeloans has flagged its intentions to come on board as a major shareholder in the company’s bid for the Refund business.
If the Independent Mortgage Professionals bid is successful, Homeloans will provide the necessary funds for the purchase of Refund Home Loans.
“This is a good result for us. Homeloans has indicated that they would like to support us. Now we just have to strike a deal with the administrator. Hopefully, the whole business will be sold within the next two weeks,” the spokesperson said.
Independent Mortgage Professionals first flagged their interest in the business back in March. However, the company lacked the funds needed to purchase the Refund business, causing the sale to stall.
According to a letter from Independent Mortgage Professionals to franchisees, Homeloans is currently seeking to grow its distribution network and, under the right terms and conditions, see the Refund network as a potential part of that growth.
Under the terms of the sale, Choice will remain as the aggregator to Refund Franchisees.
In addition, all participating franchisees must agree to terminate their existing franchise agreement and sign a new exclusive Homeloans branded broker agreement.
Each participating franchisee will receive 60 per cent of commissions owing since Voluntary Administration.
This is to be paid in two tranches: 35 per cent shortly after purchase and 25 per cent after 18 months. No outstanding client refunds will be paid.
During the first 3 years, IMP will pay out 70 per cent of the trail commissions. After the initial 3-year period the trail commission will increase to 85 per cent.
IMP will also pay out 80 per cent of the up-front commissions and it is IMP’s intention to offer bonus incentives for high volume settlements of new loans.
A spokesperson for Homeloans told The Adviser that while the lender was in discussions with IMP about becoming a major shareholder in the Refund sale, conversations were still in their preliminary stages.
"We only had a conversation with IMP this week. Discussions are still in the early stages, but it is something we are definitely looking into," the spokesperson said.
