Occasionally investors need to access their funds earlier than expected and they would on-sell these to other investors via the Resale or Secondary Market.
There are many reasons why investors may need their funds before the loan repays and we offer a Resale service to assist them with this.
The most common reasons are:
Loans cannot be re-sold to other investors that:
We want investors to be confident that there is nothing wrong with these loans and they are the same quality loans as any of the new loans on offer. That’s why all Resale loans are reviewed before being published on the Portal’s Investment Opportunities page to ensure they still fit our strict criteria.
If you have any questions about any of the Secondary Market loans listed on the Investor Portal, please do not hesitate to get in touch.
Our minimum investment can be as low as $10,000.00 (ten thousand dollars) per individual loan but subject to availability . Each loan will have its own set minimum investment which can be dependent on the total loan amount and the number of preferred investors in a loan. For example a loan of $1m or more may have a minimum set of $50,000 allowing 20 investors to invest.
LVR or Loan to Value Ratio is, in percentages, the loan amount against the property value, i.e., a $250,000 loan would have an LVR of 50% if the value of the property was $500,000.
All investments carry risk, however, SCP peer to peer investments are supported by a first mortgage registered against a piece of Real Estate. Better yet, you are able to select the location and the Loan To Value ratio that best suits your investment risk profile and investment strategy.
This decision is yours to make. We can help explain any procedural matters that are unclear to you, but we cannot provide you with any advice or guidance in respect to individual loans or to your wider investment strategy. If this is required, we would urge you to speak to a suitably qualified Authorised Financial Advisor.
Each investor is allocated an On-Call account where new funds and repaying funds are transferred in and out of.
Any funds that are held in this account earn interest calculated daily and paid out to your nominated bank account on the first working day of the month following (interest is unable to be held in the On-Call account).
The interest rate will be based on a percentage of the current OCR and will fluctuate accordingly.
If the OCR rate changes, we will reflect that change in our interest rate from the first day of the following month.
The current interest rate for the on-call account is: 2.25% p.a.
Resident Withholding Tax (RWT) is deducted from the gross interest earned and calculated at your current nominated tax rate.
We are legally obliged to deduct Resident Witholding Tax (RWT) from any and all interest earned which we send to the Inland Revenue Department (IRD) on a monthly basis on your behalf.
It is up to you to supply us with a valid IRD number for each party or entity investing along with a tax rate. You can check your tax rate on the IRD website.
Firstly, Southern Cross Partners will deal directly with the borrower in an effort to sort out the problem. We have a lot of experience with this, and a range of strategies that we employ. In respect to your interest payments, these are paid from the instalments that the borrower pays to us. If they do not pay, Southern Cross Partners may elect to make up any shortfall. If we do this, your payments will continue, unaltered, and we will collect any shortfall payments from the borrower. If we elect to not pay you the shortfall, your interest payments will stop and you will be entitled to a portion of whatever default interest we collect on your portion of the loan, for the period that your investment payments are in default.
Your investment is for the life of the loan and locked in until the loan repays. However, we do operate a Secondary Market service where, in some circumstances, you can re-sell your loan to other investors. Click here for the rules for this service. To know more about the circumstances when investors mighty use this service you can read our blog here.
As part of the loan drawdown process, we will receive evidence that properties are insured and that our interest is noted on those policies. Despite this, it is possible that borrowers may let policies lapse or even cancel them, and whilst there is an expectation that Insurance Companies will notify us of that, this does not always occur. Insurance is always checked if any event occurs with a borrower, and it is a condition of their loan that the property is continuously covered. Occasionally we will pay insurance companies to keep properties insured, with costs for this added to the loan.
We receive confirmation that rates are paid to date when we provide a loan, but this does not mean that the borrower will continue to meet their rate payments. The Local Government Act gives the councils authority to claim unpaid rates from Mortgagees, so at times we receive these rate demands.
Initially we will contact the borrower to arrange payment, but at times we will be obliged to make these payments, with the cost added to the loan. Where Southern Cross Partners has paid these rates, then Southern Cross Partners will be refunded these amounts first where the loan is repaid including where the mortgaged property is sold at a mortgagee sale.
P2P is a mechanism whereby an intermediary (us) puts an Investor (you) together with a borrower. The intermediary (us) manages both sides of the relationship.
The Southern Cross Financial Group has been providing mortgage lending since 1997 and Contributory Mortgage Investing since 2009. P2P is simply the modern term for what we have been doing for years. Where we differ from most other P2P providers* is that:
*Some other P2P providers may have one or more of the above attributes.
Southern Cross Partners is licensed to provide peer-to-peer lending services under the Financial Markets Conduct Act 2013. Click here to view the FMA website.
The license is held by Southern Cross Partners Limited. (This company was called SCFL Management Limited, and was our Contributory Mortgage broker, with the name change taking effect from the 1st of December 2016).
Peer-to Peer (P2P) is a mechanism whereby an intermediary (us) puts an Investor (you) together with a borrower. The intermediary (us) manages both sides of the relationship.
The Southern Cross Financial Group has been providing mortgage lending since 1997 and Contributory Mortgage Investing since 2009. P2P is simply the modern term for what we have been doing for years. Where we differ from most other P2P providers* is that:
*Some other P2P providers may have one or more of the above attributes.
The loans we lend on, and are offered to investors, are provided to us either via the nationwide financial adviser network, or direct from the borrower, with each loan subject to stringent credit assessment regardless of origin.
We do not provide loans, or security property, from other property investment companies on our platform.
In the unlikely event of a failure of our business, we have a contractual arrangement with another finance provider to take over the management of the business. There may be some minor interruption to services while the transition occurs, but things would quickly be back on track, with no adverse effect to our investors. Of course the mortgage which supports your investment, as well as your interest payments, are all held in Trust by Loan Investment Trustees Limited. They do not form part of our business, and those funds / mortgage securities are not immersed in our business in any way. They are held completely separately, so any failure of Southern Cross Partners does not involve your Investment or your Interest Payments.
No. The first mortgage is registered on the title of the property by Loan Investment Trustees Limited, our trustee company. This is held in trust on behalf of the investors.
Borrowers may repay a portion of their loan within the loan term at anytime.
There are legitimate reason borrowers may repay a portion of their loan during the loan term such as they have sold one or more of the security properties, a reduction in the loan amount is required to qualify for a renewal or they have obtained funds from other sources sufficient to significantly reduce their loan.
When funds arrive they are distributed to each investor by the percentage of the overall loan they hold, and then deposited into the investors' On Call accounts. Email advice confirming the amount recieved is sent to all investors as soon as practical.
A reminder all funds received into our trust account are processed the next business day. This includes funds received on Fridays processed on Mondays.
Legally we are required to accept borrowers' funds to apply to their loan at anytime with no notice required. This includes full and partial repayments.
To know how your investments will be managed in the event of your passing we have prepared an information sheet to guide you and your family through the next steps.
Please click here to view the information sheet. You can also contact our friendly investment team [email protected]
You can access all details for your investment portfolio on the SCP investor portal. This includes all transactions and investment details of current and past investments.
In addition 6 monthly transaction statements are made available to all investors in April & October every year and appear on the Statements section of the investor portal. Resident Withholding Tax (RWT) certificates are also available however all details can be also accessed on the MyIR part of the Inland Revenue Department website and we are shown as Loan Investment Trustees Limited.
