Otago Property Investors Association Inc

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24-04-2008

Parent says Tasman and United doing OK

Lombard says that although its finance company has collapsed its mortgage businesses, Tasman and United, continue to to trade at acceptable levels in a very tough market.
 
Lombard says all lenders have indicated lower application volumes for home mortgages and certainly the application volumes have reduced.

"The Tasman/United group has recently completed an internal reorganisation and cost cutting measures which are designed to ensure a budget surplus for the 2008/2009 year is achieved," Lombard Group chief executive Michael Reeves says.

The listed company will report separately on Tasman/United's results for the year ending March 31.

Questions have been asked about Tasman as it was formerly owned by Blue Chip entities and reportedly funded many Blue Chip deals.

Reeves says neither Tasman nor United are directly affected if a borrower defaults under a loan.

"Once a loan is confirmed as being in default, the third party lenders who have provided the funds take over administration of the relevant loan and seek whatever recoveries are available to them to reduce their losses," he says in a statement to the NZX.

"Loans are not underwritten by Tasman/United."

Trail commissions stop once a loan is in default. Reeves says that the impact of defaults has not been material on the business.

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