Peter McGuinness
Reverse mortgage operator Bluestone Equity Release plans to align with a number of financial services institutions to provide reverse mortgages to the retail market.
As part of its plan, Bluestone Equity Release has signed an agreement with wholesale financial services group Cuscal.
Commenting on the new deal, Bluestone Equity Release chief executive officer Peter McGuinness said: “It’s an important part of the business to begin structuring relationships with retail financial institution organisations.
“Potentially, we’re in active discussions with a number of groups. Before Cuscal we had spoken with individual credit unions, though the deal was pretty appealing,” McGuinness said.
Under the terms of the agreement, Cuscal will promote Bluestone’s ‘white label’ product under the Integris Equity Release brand. The move has already resulted in a number of credit unions, including Holiday Coast Credit Union, signing up to the new product.
“We offer to provide Cuscal with a ‘white label’ product. We then offer a commission structure to Cuscal, and they pay the majority of that through their underlining credit unions,” explained McGuinness.
Cuscal chief executive officer John Gilbert said his group identified the need for its retail clients to be able to offer reverse mortgages to their customers aged over 60 years. After conducting an intensive research and review process of specialist providers, Cuscal selected Bluestone Equity Release.
“Many of our clients, including credit unions, are increasingly being faced with the need to offer greater financial solutions to their over 60s customer base,” Gilbert said.
“During 2006, we undertook a thorough review of reverse mortgages that were available in the wider market and selected Bluestone Equity Release for its flexible range of products, focus on interest rate protection and strong evidence of compliance-based underwriting at its back-office,” he said.
Reverse mortgages for asset-rich but cash-poor retirees have become a $1 billion industry and is expected to grow dramatically to between $7 billion and $15 billion by 2010, as baby boomers seek adequate funding for their retirement lifestyles.
The Bluestone Group has been operating since 2000 and has provided home loans to thousands of customers throughout Australasia worth over $2 billion. The Bluestone Group operates under the names Bluestone Mortgages in Australia and New Zealand, and Bluestone Equity Release in Australia.
Cuscal provides wholesale and transactional banking services to over 150 specialist financial service retailers, including the majority of Australia’s credit unions.
