While Virgin Money has made quite a splash in the marketplace this week with the launch of new financial products through its strategic alliance with Citibank, it’s mortgage operation in Australia is subject to a number of restrictions.
Virgin Money entered the Australian home loan market in 2006 with Macquarie Bank as an off the balance sheet funding partner. By 2008 Macquarie, , could no longer securitise and exited the mortgage market leaving virgin and others in the lurch.
Macquarie’s contract with Virgin Money is still in force and runs until later this year. Virgin Money are legally barred from launching a home loan product with its new partner until that contract expires.
Under the terms of the deal Virgin Money cannot market a home loan but it can process applications. To be able to do this it signed up with Firstfolio to use its Bloom wholesale mortgage platform.
Firstfolio chief executive Mark Forsyth said Virgin Money has already processed some loans through Bloom and may continue to use the platform after it puts new Citibank funded product into the market.
Meanwhile, Bloom is expanding its portfolio. Yesterday it announced that LJ Hooker would offer a “house brand” mortgage product using Bloom for wholesale funding, telephone and web-based loan administration services and training of 140 home loan consultants.
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