Rumour Mill

As long ago as the first century BC, the Latin poet Vergil marvelled – in possibly his most famous piece – at the speed with which rumours fed on themselves and spread through his ancient world.

Since then, of course, we’ve invented social networking, which vastly improves the transmission process without compromising its fundamental inaccuracy. And nowadays, there’s nobody who likes a corporate rumour more than a mortgage broker.

Brokers by and large do a great job keeping abreast of lending product and criteria changes and helping their clients through an otherwise bewildering, or needlessly expensive, transaction.

But do they, and their industry press, have their fingers on the pulse of corporate activity?

Here are a few recent examples of things put through the rumour mill:

Who wants Wizard?

MoneyManagement, 2 December 2008 “The acquisition of GE Money’s home lending business, Wizard Home Loans, by National Australia Bank (NAB) is edging closer… The public relations teams of both NAB and Wizard are reputed to be meeting this Thursday to nut out the public statement…”

Daily Telegraph, 24 December 2008: “GE MONEY will sell its Wizard Home Loans brand and franchise network in Australia to Aussie Home Loans for an undisclosed amount.”

Is Macquarie re-entering the mortgage “space”?

Broker News, 19 March: “…Macquarie Bank may once again be making an appearance in the broker market, with several respected industry players claiming the lender is preparing to dabble in the aggregation space… it is believed Macquarie Bank will take a stake in its proposed aggregation model.”

Mortgage Business, 8 September: “Macquarie was quick to dismiss any talk of investment in the proposed aggregation group… this will not be a Macquarie aggregator group”

Who will take LJ Hooker off Suncorp’s grateful hands?

The Australian, 16 July “Home loans broker Mortgage Choice is believed to be close to acquiring Suncorp’s LJ Hooker real estate agency business.”

The Australian, 24 September “Suncorp to sell LJ Hooker to founder’s grandson.”

Will the ACCC block NAB’s purchase of the Challenger aggregators?

Broker News, 1 October: “Key parts of NAB’s proposed $385 million buyout of Challenger’s mortgage management businesses may be blocked by the competition regulator on market dominance concerns.”

Mortgage Business, 7 October: ” …the Australian Competition and Consumer Commission has confirmed it will not intervene in NAB’s proposed acquisition of Challenger’s mortgage management business.”

There’s a moral to the story. When a broker tells you that it will take 27 days to get a loan approved with one of the Big Four lenders, he/she is probably right. When they tell you which group that lender’s buying, you can safely ignore the advice.