Mortgage broker facing wind up order

Mortgage broking business Mortgage House of Australia could be sold off after its parent company, Global Mortgage Equity Corporation, was hit with a wind up order in the New South Wales Supreme Court.

ASIC documents show an application to wind up GMEC was lodged on December 24, 2008. The company owns the well-known mortgage broking business Mortgage House of Australia, which operates more than 40 home loan centres around Australia.

The company is run by Ken Sayer, who founded the business in the 1980s and is the company’s major shareholder.

According to a report in the Herald Sun, the winding up order was launched by Zoltan Tomanovic, who has a 45% stake in GMEC and is in dispute with Sayer.

Sayer was not available for comment this morning, but told the paper that he was confident that the winding up order would be dismissed.

But if is not dismissed and a liquidator is appointed to the group by the court, parts of the business – including Mortgage House – could be on the sale block.

The court spat comes at a difficult time for the mortgage broking industry, which is struggling to compete in the credit-constrained landscape which is dominated by the big four banks.

Mortgage Choice chief executive Michael Russell told SmartCompany in December that the industry is set for a period of consolidation.

“The distribution piece is consolidating quickly. Choice Aggregation Services was sold to Challenger in late 2007 and that’s been packaged up and sold to NAB. CBA’s taken out Aussie, Macquarie are soon to bring together three or four top 20 aggregators. So there’s a lot of consolidation happening in the space and my only comment there is Mortgage Choice doesn’t want to be a bystander any longer, we need to participate in that.”