RIP Derivex

When another company brings up IFHL (as will certainly happen) I will, like everyone else, eagerly go to their web site and try to find out what the real deal is. To do that they’d have to at least provide some info on how it works.

Pretty diagrams with colours are good[biggrin].

All in all it sounds like a hard sell. Using a “something for nothing” sales pitch always raises suspicion.

Hi Rob,

Are you able to say a bit about the management problems? What were they? Any suggestions for strategies to overcome them? I understand if you can’t.

Cheers,
Jason.

Maybe this will solve the mysterious sytem ?

http://www.mortgagepackaging.com.au/forum/viewtopic.php?t=18

Posted: Friday 22nd April 2005 10:02:22 am Post subject: How it works…

Derives uses a similar system to banks. If derives lends you 1 million dollars it can use that secured mortgage to borrow on the international money market – the ratio they use is 21:1. Hence if they are going to loan you 1 million they can actually borrow 21 million.

Now, the rules state that you have to pay back 5% of the principal every year. There are a couple of others but this is the main one. In essence they use your mortgage to play the international money market.

Supposedly there is no risk to you if they lose all their money on the money market – not sure why at this point in time. I understand it has something to do with the fact that the loan is independently secured – hmmm, would need more info here.

Money markets can be volatile so it would be interesting to see how the model works to protect the mortgagor if the mortgagee sustains irrecoverable losses on the international money market.

The way it is being pitched is that it is virtually risk free. Again, that remains to be seen. I understand they are likely to drop the residential lending side of things and focus only on commercial.

Look for more from ASIC etc at the end of April apparently.

With a better understanding of the down side the product could indeed have a use but my opinion would be that is more of a niche product than a standardised loan facility. Still, will be interesting to see what our friends at ASIC come back with. “

Planing, nice find. I did not even know there were posts there about Derivex.

Jason, I don’t think anyone is a ‘Derivex’ advocate as Derivex is just a company name. As an Interest Free Loan Product ‘researcher’, I would say that that person has really no idea how it all works although the 20 to 1 gearing is part of the overall structure.

As I said earlier, I will not go into how it works with anyone as it just causes trouble.

The Mortgage Adviser

Sorry folks,

The 4th and final hoof of the IFHL nag has just entered the glue factory…Game Over. [biggrin]

I guess it means IFHL is just a genius’s dream.

Well I guess some of us should take on board a lesson about jumping to conclusions without verifying the truth.

Have a great weekend,

Simon Macks
Finance Broker
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Nat, I would much prefer having no dialogue with you whatsoever. I don’t think a sensible level of discussion can be maintained. I am happy never to address you in any of my posts and I would appreciate the same in return.

Have a nice life.

The Mortgage Adviser