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Lenders partner to form new mortgage business

A non-bank established by former Pepper executives has partnered with an ASX-listed lender to launch a new mortgage business.

Asset finance lender Azora Finance has entered into a joint venture agreement with ASX-listed lender FSA Group, forming a new home lending business, Azora Home Loans.

As part of the new joint venture, FSA Group subsidiary Fox Symes Home Loans (FSHL) has rebranded, assuming the name of the new entity.   

According to Azora, the new venture seeks to combine the resources and specialist home lending infrastructure of FSHL – which includes its direct loan origination, credit, customer service, collections and loan servicing teams – with Azora Finance’s distribution capabilities.

FSA Group’s executive director, Tim Odillo Maher, said the partnership would help bolster the lender’s loan portfolio, which totalled $382 million as at the close of the 2019 financial year (FY19).

“Over the last 12 years, we have proven our ability to successfully originate and manage non-conforming home loans,” he said.

“Our low level of arrears and losses are market-leading. However, we have been unable to grow our loan pool and earnings at a desired level.”

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He continued: “In order to grow, we need to further develop our product offering and expand our external origination and distribution channels.”

Mr Maher said he is confident the venture would succeed in achieving its objectives, pointing to the experience of Azora Finance’s management team.  

Azora Finance is owned and operated by a consortium, which includes former Pepper Money co-group CEO Patrick Tuttle, former Pepper COO David Holmes, former group treasurer of Virgin Australia Philip Sullivan and Pepper’s former head of credit Andrew Paterson.

Mr Tuttle, Azora’s executive director, added that the joint venture would provide its customers and accredited brokers with access to an expanded suite of finance solutions.

“We really pride ourselves on our ‘lean on us’ mantra, giving Australians access to fast, flexible finance to meet their immediate needs, goals and aspirations,” he said.

“This joint venture with FSA Group enables us to offer a range of bespoke home loan products to Australians, when coupled with our existing asset finance solutions, allows us to better service our target markets. 

“Whether you’re a small-business owner looking for a flexible home loan or someone tired of being given the run-around by banks or other lenders incapable of understanding your financial situation, we aim to be the lender of choice for SME and specialist borrowers.”

David Holmes, also an executive director of Azora Home Loans, revealed that the new venture will offer a “broad range of mortgage solutions”, including products for self-employed and small-business owners, borrowers looking to consolidate their debts, and consumers who have been knocked back by their bank.

“We intend to provide a genuine alternative to existing specialist mortgage lenders, for both brokers and customers alike, offering competitive risk-based home loan pricing, combined with reliable credit decisioning, highly professional service standards and prompt turnaround times,” Mr Holmes added.

“We are nimble and will focus on underserved borrowers not currently able to get set in what has become a tentative mortgage lending environment in the aftermath of the banking royal commission.”

Mr Tuttle concluded: “Azora is a fresh face and new brand in the Australian financial services sector, backed by a senior management team with vast experience in building and operating specialist mortgage lending businesses and related RMBS issuance programs. 

“Coupled with our industry-leading service standards, consistent and prudent application of responsible lending standards, and our digital-first DNA, Azora will provide brokers and customers with an exceptional experience as we aim to be at the forefront of the non-bank mortgage and SME lending sector for years to come.”

 [Related: MoneyMe IPO to fund product expansion]

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