Fox Symes needs funding for home loans

Fox Symes plans to grow its home loan business to $600 million worth of loans outstanding within three years and is looking for funding options.

The home loan business is used to assist debt-stressed clients with equity in their home to refinance with Fox Symes. Currently the consumer debt consolidation company has $220 million for home lending from Westpac, of which it has used more than $160 million.

Fox Symes reports a 30-day arrears rate of about five per cent, and an average loan to valuation ratio of 67 per cent with 95 per cent of borrowers being income-verified full doc borrowers.

Westpac has also recently renewed and increased a $10 million line of limited recourse funding to $15 million for Fox Symes' distressed small business debt services operation.

Fox Symes wants another $20 million for this loan pool over the three years.

While the lending business seems to be going very well for Fox Symes, the part nine debt agreement business cooled during 2009. The number of agreements signed in the first half was six per cent lower than during the first half of last financial year. The company blames the government's stimulus payments, lower interest rates and lower consumer spending for the lower debt agreement results.

Fox Symes reported a net profit for the first half of just over $3.5 million, up 12.7 per cent on the corresponding period from last financial year. Revenues were up 4.1 per cent to $24.7 million.