Mortgage Fund

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Bankwest, a subsidiary of Commonwealth Bank, has refunded nearly $5 million to customers after finding it failed to link offset accounts with home loans and overcharged interest to these customers for nearly a decade.
The issue affected customers who opened accounts between 2007 and June 2016, Bankwest said in a press release on the website of the Australian Securities and Investments Commission.  
Bankwest said it had refunded nearly 10,800 customers more than $4.9 million after it failed to link offset accounts to home loan accounts. An offset account is a savings or transaction account that, when linked to a home loan, offsets the balance of the loan account, reducing the interest payable.
Following media coverage of ASIC's work in relation to similar breaches by another bank, Bankwest undertook an internal investigation into the operation of its offset accounts. Bankwest identified issues in the linking of offset accounts with home loans and reported the matter to ASIC as a significant breach of its licence obligations. 
ASIC deputy chairman Peter Kell said, 'It is critical that licensees ensure that their systems work properly so that promises made to customers about their bank accounts are kept.
'When a problem is identified, licensees not only have an obligation to report the breach, but impacted customers must be returned to the position they would have been in, had the breach not occurred.'
Bankwest said it has fixed the problem, including the automatic linking of new offset accounts and contacted those customers it has identified as being affected to explain the impact and has arranged refunds.
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Bankwest refunds $4.9 million it overcharged on mortgage interest

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DomaCom have announced an allocation to two mortgage investment by their first branded Mortgage Fund with DFS Portfolio Solution (DFSPS).
The two first mortgages total around $4.1 million. The first mortgage has been drawn down and the second is expected over the next few weeks.
DomaCom CEO Arthur Naoumidis said “DomaCom has been working with DFSPS for some time to bring about a branded retail mortgage sub-fund on the DomaCom platform that can be accessed by advisers and portfolio managers”.
“Until now this market was mostly accessed by sophisticated investors but as a model manager, DFSPS has unlocked the retail potential of the non-bank sector by making this sub-fund available to clients and advisers who utilise its portfolio services.”
In an environment of highly compressed yields across a range of defensive investments, the non-bank sector is offering annualised target returns substantially higher than the cash rate, in a range of 5%-10% pa.
DFSPS managing director Stephen Romic acknowledged that it was difficult to access and manage mortgage assets until the fractional model developed by DomaCom became available.
“DFSPS and DomaCom have been working together for over 12 months to build a unique and innovative capability that allows advisers to efficiently incorporate exposures to first mortgage investments within their client portfolios," Romic said.
"With increasing market volatility expected within a persistently low yield environment, we wish to take advantage of the prevailing risk premiums whilst they continue to present.
"We are pleased to be able to offer the AFSLs that use our portfolio service access to this unique opportunity; and expect further demand in this sector going by the growing interest among new AFSLs”.
Appointed by DomaCom, DFSPS will act as sub-manager with responsibility for decisions on portfolio composition and management, including, seeking, vetting and recommending first mortgage opportunities, liaising with mortgage originators, arranging independent credit assessments, overseeing and managing timelines and liquidity management and co-ordinating funding and managing cashflows.
In developing an institutional-grade mortgage fund within the DomaCom Fund DFSPS aims to invest an initial $25m as part of the initial phase and then continue to build over time.
 
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