Five Dunedin people will be losing their jobs with news yesterday Wizard Home Loans was being closed by its owner, GE Money, due to the global economic crisis.
The future of the Oamaru Wizard franchise, part of Star Financial Service, appeared more secure, with director Alan Sandri saying it operated as a mortgage broker and directed clients to wherever they got the best deals, including to Wizard.
Wizard Home Loans Dunedin branch principal Robert Janssen said he had hoped GE Money might have found a buyer for the mortgage arm, but it now looked like he would be closing the doors after three years in business.
He said news the business was to close had come as a surprise, and he was still to assess any recourse for him as a franchise holder.
No date had been set for offices to close.
Earlier this year GE Money announced it would stop making home loans through third parties and would also exit from motor industry and small business financing.
It would continue to service an existing 4000 mortgage loans worth $1 billion, the company said, along with retail store finance, personal loans and insurance.
GE Money Australia and New Zealand chief executive Mike Cutter said the business was no longer viable because of the global financial crisis, extreme market volatility, the higher cost of funds, plus the deteriorating New Zealand mortgage market.
Nationally 25 branches employing more than 80 people would close, terminating all those jobs.
Mr Janssen said the Dunedin mortgage market had become tough, which affected all mortgage lenders, but the closure would not affect existing mortgage clients.
His priority was to help his five workers find alternative employment.
Mr Sandri said it was business as usual for his Oamaru business, but he had not heard from GE Money or Wizard when spoken to yesterday.
"Essentially we are brokers and we've had access to Wizard Home Loans through GE."
Wizard was one of his clients, but even so, he was unsure about the future of his business, given the uncertain financial situation: "We're affected like everybody else," he said.
