Mortgage brokers are becoming increasingly concerned about dealing with lenders whose funds come through securitisation. Disturbed by the failure of Rams Home Loans Group, brokers had further cause to worry last week when they heard that the mortgage funder Columbus Capital had stopped loan originations until further notice.Lender Mortgage Ezy was one of Columbus Capital's biggest clients. The group's chief executive, Peter James, said he was informed last Tuesday that Columbus would fund loans settled by Friday. As things turned out, the last loans to get funded were those settled on Wednesday.James said: "We had $150 million of loans to settle when Columbus made its announcement. By the end of the week we still had $100 million left."Mortgage Ezy deals with other funders but James said it was not a straightforward process. "We can fund standard loans from other sources but Columbus offered low doc loans with 90 per cent loan to valuation ratios and no docs with 80 per cent LVRs. We are finding it hard to replace that funding."When you have to go back to brokers and tell them their customers have to come up with more security, you can imagine the reaction. "A lot of brokers' perception now is that dealing with lenders that use securitisation is too hard. Some of the brokers are going to move back to the banks." Columbus Capital notified the 16 originators it deals with that it will not be doing any more origination business until 2008. Columbus Capital director Andrew Chepul said the credit markets remained volatile and the group was aiming to consolidate its position in the short term.Columbus has been in the mortgage funding market for a year. The company is a joint venture between a group of local directors and a Malaysian life insurance company, Malaysian Assurance Alliance.Chepul said Columbus had a $750 million portfolio of prime loans. Included in that is a portfolio of low-doc loans it bought from Bluestone Group.Columbus closed its first securitisation last week, a $255 million RMBS issue, Nautilus Series 2007-1. The issue was taken up by local investors. The talk in the market is that one of the group's warehouse funders had to rescue the issue by investing in one of the tranches. The funder then imposed some restrictions on the business.James said Columbus was a good group with some specialised product offering. But he said it was a young company that made a few mistakes. "It was a case of traps for young players," he said."What disappointed us was that their Malaysian parent did not stand by them."