| Fincorp owner paid himself $10m
THE owner and former executive chairman of the failed property investment and development group, Fincorp, took more than $10 million in salary, fees, dividends and interest-free loans from the company even as it teetered on collapse. Eric Krecichwost paid himself a salary of $1 million in 2005, his last year as an employee of the Fincorp Group, but also charged the company another $2.2 million for management services that were provided by other companies controlled by him. At the same time, Mr Krecichwost and another of his companies were given just over $6.7 million in interest-free loans, of which $4.7 million went to "related parties" of the ex-chairman, thought to be him personally. According to information contained in Fincorp's 2005 annual accounts, the most recent available, the crippled group also paid a dividend of $1.2 million.
Mortgage solves seniors' cash problems
Are you or someone you know a senior citizen homeowner who is "house rich" but "cash poor?" If so, a reverse mortgage can solve the problem if the homeowner is at least 62, needs tax-free income with no monthly payments, and plans to stay in his or her house or condo at least five years. WHAT IS A REVERSE MORTGAGE? Just the opposite of an amortized mortgage, which requires the borrower to make monthly payments over 15 to 30 years, a reverse mortgage pays money to the borrower whenever needed and requires no repayment until the homeowner sells the home, moves out for longer than 12 months or dies. Purchase Bob Bruss reports online. When one of those events occurs, the reverse-mortgage principal and accrued interest "matures" and becomes payable in full.
Eyeing up the market
At a time when intermediaries are being coaxed into looking at commercial mortgages for the first time, it is hard to see into the future, to see what lies beyond the regulatory horizon for commercial mortgages. Intermediary buy-in on a large scale still has a long way to go in this market. But the template laid down for residential mortgages of offering whole-of-market before a recommendation is made and the concept of treating customers fairly (TCF) will be difficult to ignore, whether the market is regulated or not. Therefore, the habits that have been acquired in residential lending in the past two years to comply with TCF will be a feature of the growing commercial market. However, the commercial market is a different animal from its residential cousin. While the dynamics are the same, in that a lender takes a property as security in return for funding, the type of client, a business person, and the requirement for a loan on commercial premises not on a family home, removes some of the emotion that is attached to the purchase of a principal residence.
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