[marnilMember@marnilJoin Date: 2010Post Count: 3]

October 9, 2010 - 9:22 am

To clarify, RAMS was purchased by Westpac around 3 years ago.  What WBC purchased was the brand and the franchise network.  What WBC didn’t keep was the existing loan book which, other then any loans that they sold off, become RHG loans.  The majority of the products that become RHG had early repayment fees during the first 3 years which should all be coming to an end within the next couple of months.  This of course doesn’t include fixed rates or several products which have a 5 year ERF.  Generally speaking it is 1% of the amount borrowed. In regards to how the customers were treated, the loan book remained with RHG who really are the old RAMS (other then what they sold off), and all that WBC took on was the name.  I feel for any customers, much like the Wizard customers that went to GE, who ended up being a captive customer base.   The information that I have received is that the National Credit Act that become effective on 1^st July non-bank lenders, and will be in play 1^st January 2011 for banks should change the way early repayment fees are calculated.  To give you an idea, RAMS (who are already under the National Credit Act) changed their ERF’s in July: 

• Loan discharged in Year 1: ERF capped at $1,600.00
• Loan discharged in Year 2: ERF capped at $1,100.00
• Loan discharged in Year 3: ERF capped at $600.00

 There will be no ERF charged in years 4 and 5 for any products with an ERF calculation that currently extends beyond 3 years  I have spoken with RHG and also received in writing that they are still charging ERF’s as per prior to the new legislation.   

[marnilMember@marnilJoin Date: 2010Post Count: 3]

October 9, 2010 - 2:05 am

This is what I have managed to find out about the diffences between the Head Lease model and NEJV.

The head lease version of NRAS (or Heads of Agreement) was thought to be restrictive by banks and lenders as there was some concern in regards to the disposal of the security property and the restrictions that the head lease placed on this.  The WBC group have done a massive amount of work on a large consortium in Qld with a head lease and they have now released a policy in regards to lending on properties under this scheme with this particular consortiums head lease.  This policy also covers RAMS and St George.  I have seen a lot of these in Qld with no huge issues for the investor. I would imagine that it would depend on exactly who applied for the NRAS approval on that particular property and if they are involved with a consortium that uses a head lease. I have also heard of one investor in Qld who had purchased an NRAS property and decided that they no longer wanted it to managed by the consortium that they were with and managed to move it on to a compliance manager who was under the NEJV model. I am not sure if this is something that would be easy to do (or if you would be able to do it) I would be interested in knowing what it is that is specifically stopping investors from purchasing properties with a head lease?

The non-entity joint venture model of NRAS has no head lease attached.  This is basically a tax term, and it relates to the investor/purchaser and the compliance manager who share in the rebate for the scheme.  Unlike the headlease there is nothing registered on the title. 

If anyone wants more information on the differences I have details of a man in Qld who knows pretty much everything there is to know about NRAS.

[marnilMember@marnilJoin Date: 2010Post Count: 3]

October 9, 2010 - 1:29 am

Hi Reggie
I'm new to this forum but I have spent months researching the NRAS scheme and the available properties.  There seems to be a lot in Qld at the moment that look quite interesting.  I am sure that you know the basics of the scheme from the available information on the internet.  I have been involved from the finance side of NRAS when we become aware of it late last year.  An issue that investors were experiencing was sourcing lenders that were willing to lend to under this scheme due to "Head Lease" which was seen to be restrictive if the lender needed to dispose of the security.  These issues have recently been sorted out and it is now easier to lend under the scheme.  During this time I have spoken with people and organisations who are selling and managing properties under the scheme so I have a large amount of knowledge on what is available at the moment.  If you need any help or have anything specific in mind I may be able to point you in right direction.  If you want to know anything else about what is happening in Qld send me a PM
Marni