40 GE Money jobs at risk as new owner looks at prime mortgages
AN Australian lender is considering offering prime mortgages here after buying out the business of subprime lender GE Money.
The move could provide a desperately needed shot in the arm for the beleaguered mortgage market.
Just €2.5bn was issued in new mortgage lending last year, a fraction of the amount loaned out in other years.
Sydney-headquartered Pepper Home Loans Group has taken over the mortgage business of GE Money, in a move that could lead to 40 redundancies.
Some 192 people work for GE Money here, which is part of the portfolio of one of the largest companies in the world, General Electric.
Pepper boss Patrick Tuttle said yesterday his company will "consider originating new mortgage business in Ireland".
The Australian lender will take over a mortgage book valued at €600m, with 3,500 mortgage holders.
It has not bought the €200m motor and personal loans business of GE Money, but will service these accounts.
There will be no impact on customers, the new owner insisted yesterday.
Pepper said it intends to use the move into Ireland to expand into Britain and the Continent. It also intends to get involved in servicing loans that are in arrears on behalf of other banks.
Set up in Australia in 2001, the lender has issued €2.77bn in mortgages in that country. It also recently bought €3.9bn in mortgages from GE Money in Australia.
An analyst with Davy stockbrokers said domestic lenders were reluctant to issue mortgages and explained: "We need a new lender to write mortgage business but they are only going to do it if it is good business."
She said lenders here were being very selective about who they give a mortgage to, so a new entrant would be welcome.
GE Money has been writing down the value of its mortgage book and offering deals to homeowners who surrender their homes.
It wrote off €140,000 at the start of the year from the mortgage owed by a Dublin family. The ownership of the house was given up by the family, with the house now owed by housing charity Cluid and rented back by the family.
The new owner is expected to continue to offer writedowns and mortgage-to-rent deals in Ireland.