KEY POINTS:
Lender GE Money has told investors in failed finance company Blue Chip to pay up or it will sell their homes.
Lawyer Paul Dale said at least 10 people owing between $100,000 and $500,000 each had received phone calls in the past week saying GE would use its
rights to take over their properties.
But GE said the only people at risk of losing their homes were those who refused to talk to it, or who could afford to pay the loan back but refused.
Garry Abbiss, a Palmerston North engineer who borrowed $170,000 to invest in a failed Blue Chip property scheme, said GE called him on Monday to tell him it would be selling his home.
He had not been making repayments - partly because it was difficult and partly because he hoped to have the loan overturned. "Maybe they're bluffing, I don't know."
Mr Dale - a lawyer for Mr Abbiss and hundreds of other burned Blue Chip investors - said some investors had talked to GE about their situations and still been told GE was considering selling their properties.
Blue Chip left thousands of investors out of pocket after its collapse in February. Many of them had borrowed money against their homes.
Mr Dale said he had lodged a legal challenge that could overturn some of the loans.
In the meantime, banks were leaving investors wondering whether a mortgagee sale sign was going to go up outside their house.
"I've got people - without exaggerating - who according to other family members are suicidal, who are being told by GE, 'We're going to sell you up'," said Mr Dale.
GE Money spokesman Geoff Lynch said any customer who was feeling that kind of pressure should talk to the company.
If a customer had been to see staff and been told GE might still sell their home, it would be because GE had assessed their finances and decided they could afford to pay.
"We always want [selling the home] to be the last option."
Mr Lynch said GE had not issued any Property Law Act notices to pensioners or retirees "who may be at risk of losing the roof over their head".
Suzanne Edmonds from the society Exposing Unacceptable Financial Activities said she had been contacted this week by at least two investors whose homes were at risk.
Mr Dale said one family had not received a reply from a major bank (not GE) after sending four letters asking for help.
He said the Government should have done something to protect the worst-off investors instead of bailing out the big banks.
"These people - who are scattered round the country in small towns - will never recover. They'll never be able to get another house, and they are just spat out in the cold."
Finance Minister Michael Cullen announced a deal on Saturday to guarantee banks' overseas borrowing.
Mr Dale said he still hoped to get back some of the advances investors paid to developers. Some of that money could go towards paying back GE.
