Columbus mortgage facility fee blocked

Columbus Capital has found itself in dispute once more with a key mortgage manager, this time over a unilateral fee introduced by the funder.

Pioneer Mortgages Services is objecting to a A$399 "annual facility fee" announced by Columbus a few weeks ago.

The affected loans are ones managed through Origin, a business Columbus bought from ANZ in 2012.

Advice of these fees to borrowers triggered a rise in loan discharges, while Pioneer alleged that the fee was contrary to the lenders agreements with the borrowers and various legislative restrictions on additional fees and charges on most home loans.
 
On Monday, on an application by Pioneer, the Federal Court ordered that Origin be restrained from charging the annual facility fee, or similar fee, until 4 February 2015.
     
Pioneer said in a statement yesterday that it "launched this action as it considers the borrowers as valued clients and their loyalty to the Pioneer Brand as a valued commodity."

"Pioneer will continue to protect its client's rights to the extent it is lawfully permitted to do so," it said.

Andrew Chepul, managing director of Columbus, said the funder was "doing some cleaning" and also "consolidation" of the former ANZ book.

"We introduced some changes on the terms and conditions of their portfolio; they are loan account fees."

Columbus and Pioneer have argued, in part via the courts, over other aspects of the former's approach to home loans originated by the latter, though all matters were later settled.