LOANS NEWS AND GUIDES

Mortgage fund investors may be required to wait as many as four years for access to cash held in frozen investments. Investor group Light of day believes that as few as half a dozen of Australia’s over 200 mortgage funds will resume redemptions during the next 18 months, and most will only allow them on a highly restricted basis. The majority of investors however, will be required to wait a few years before being allowed access to their principal, because managers continue to be afraid that a resumption in redemptions would result in a run. “A handful of funds could be reopened to redemptions in the next 18 months if they can sell a property or two, but it will remain a very difficult situation,” Light of Day managing director Owen Lennie said. Mr. Lennie said that the reluctance of banks to lend to business following the global financial crisis has meant that even if there were potential buyers of properties, financing was not available. In October 2008, unlisted funds, which manage $25 billion in assets of 240,000 investors fell in to crisis, after the federal government announced measures which included guarantees of bank deposits of up to $1 million

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Mortgage Funds To Remain Frozen