A "financial coaching" company which can avoid new
mortgage-lending limits placed on banks is offering 100 per
cent finance to families wanting to buy their first home.
But consumers are being urged to look carefully at deals such
as those offered by the Mt Wellington-based Welcome Home
The Commerce Commission is investigating whether the company
is breaching the Fair Trading Act, and Housing New Zealand is
looking into its rights over the name of its similarly
titled, government-funded Welcome Home Loan package, which
has nothing to do with the private company.
Letters landing in Auckland mailboxes from the company are
personalised to the occupants of the home, and state that
finance is available for a family living on their street to
buy their first home.
It is signed Martin Bailey, sponsorship co-ordinator.
Company owner Luke Atkins told the Herald that private
lenders fronted up with the finance, but he would not say who
The 30-year mortgages matched ASB bank's published mortgage
rates. Interest would be kept by the lender.
The company charged a brokerage fee for the service, but Mr
Atkins would not say how much.
Fees for people who defaulted on payments "would be the same
or very similar to mainstream bank default provisions", he
The company made headlines last month with a mail-drop
offering financial coaching.
A spokesman for the Commerce Commission said it had received
a complaint about the Welcome Home Foundation "around what
the company was offering to customers and what in fact they
"The commission is currently assessing that complaint to
determine whether we believe there has been a breach of the
When Mr Atkins was told about the investigation, he said:
"That is news to me. My response is that everything is being
done correctly, I am certain any investigation will be
procedural and will give us the all-clear."
When asked about the similarity of the name to the
Government's programme, Mr Atkins said he had noticed "a
little bit of confusion" but only since the Government's
package "started getting talked about again in the media"
following mortgage-lending changes which came into effect in
Mr Atkins said that last week, the company decided to change
its name to Home Funding Group to avoid confusion.
A Housing NZ spokeswoman said yesterday: "Yes, we are aware
of them and we are talking to them to see if we can resolve
"We don't want people to be confused, so hopefully we can
come to a resolution."
NZ Institute of Economic Research principal economist
Shamubeel Eaqub said private lenders could offer as much
finance as they wanted because they were exempt from the
Reserve Bank's limits..
"You've got to make sure the organisation you are dealing
with is reputable, is sound because you are signing up to a
contract that entitles them to a bit of your information and
Mr Atkins is a registered financial services provider, as is
the Home Funding Group.
From the Welcome Home Foundation, received by a New
Zealand Herald reporter:
"I'm writing to you because in the directory you are listed
as living in Kimber Hall Avenue. Our foundation has access to
an exclusive 100% finance opportunity to assist some families
in the Mt Roskill area to buy their 1st home. One of these
opportunities has been reserved for a family in Kimber Hall
Avenue and is now available for allocation, hence this letter
- Alanah Eriksen of the New Zealand Herald