Majestic bows out

Majestic Mortgages has shut its doors, with the mortgage originator concluding there was too little interest from funders to maintain a business in the non-conforming space.

Founded by Trevor Scott, an executive who worked first at Liberty Financial and then at Bluestone, Majestic traded for only 18 months or so.

"Over the last couple of months we've found it quite difficult to place loans," Scott said.

"After the great train wreck we had to reinvent the company and morphed into a non-conforming, aggregator business. We had a panel of 15 specialist lenders; some private, some head to head and the others with a little interest in non-conforming.

"What we found over the past three months, even for specialist guys, the loan to valuation ratios were getting tight, and the credit criteria tightening. Lenders were picking and choosing."

Scott said only about one loan in four put up as a scenario turned into a formal application, and then only about sixty per cent of those settled.

"It was too labour intensive. My view was the market was only going to get worse in the near term."

Majestic had a mortgage book of about $30 million funded by Challenger and another $60 million funded by other lenders.

Scott said a handful of lenders were still funding non-conforming loans including Resimac, New Lend, Latrobe Financial and Australian Securities Limited.