Buy-back torments not over

By KATHERINE HOBY

Victims of a "buy-back" housing scam may still lose their homes, despite the Government intervening by appointing statutory managers to the companies involved.

Commerce Minister Lianne Dalziel announced on Friday the appointment of statutory managers for eight companies running the schemes. Ten mortgagee sales were blocked by the move, which came just over an hour before tenders closed on the homes concerned.

But statutory manager John Waller said he was very conscious of not giving people false hope.

"We are aware of the terrible situation some people are in," he said. "It is people's homes and lives we're holding in our hands."

Mr Waller and Richard Agnew of PricewaterhouseCoopers are the statutory managers for the companies.

At least 90 properties, valued at more than $20 million, have been involved in the schemes.

Mr Waller said some victims might still lose their homes.

"Just because statutory managers have been appointed doesn't mean people won't lose homes.

"It does freeze the position and buy time for it to be examined. It gives people a chance to catch their breath."

He hoped to know how many people were affected as soon as possible. Every situation might be different.

Mr Waller said that if securities signed up for loans proved to be valid, creditors would be able to go ahead with mortgagee sales.

He said statutory managers had wide powers that had to be obeyed while the review was going on.

"Nobody can enforce any action unless we approve it."

The companies put into statutory management were CH Finance, ICMG Leasing, the Independent Creative Management Group, Toi Te Atatu, Sleinad Finance, Opol, ICMG Holding and ICMG Property.

The people who signed up had large amounts of equity in their homes, but had little cash or earnings to service or pay back loans.

They were tempted into the buy-back schemes to get money so they could help family members buy their own homes.

They were in fact signing over home ownership and then having to pay back loans at high rates.

If they missed a payment they lost their home.

The other family members also found themselves in rent-to-buy schemes at high rates of interest.

The Auckland District Law Society has received one complaint about a law firm said to be involved in buy-back schemes.

Society president Raynor Asher, QC, said the complaint, laid by a lawyer, was received last week.

It would be investigated quickly and "there may well be others".

But Mr Asher said lawyers had been working to bring attention to the housing scams.

"We do view any complaint seriously but some fine lawyers have been at the forefront of this," he said.

"We have more good guys than bad in this, but if there are bad guys we will deal with them."

He called for a toughening of the Credit Contracts Act to make it impossible for finance companies to operate such schemes.

"The law needs to make it too hard for unscrupulous companies to exploit the needy."

Associate Maori Affairs Minister John Tamihere said he had laid complaints with the Law Society over the poor advice given by lawyers who were in fact acting for the buy-back schemes. "We are going to have a field day there if the Law Society doesn't jump on this big time."

* The statutory manager can be contacted at: John Waller, PricewaterhouseCoopers, Private Bag 92-162, Auckland.