KEY POINTS:
Investors with millions tied up in frozen mortgage funds look set to receive some of their money back in the next few months but uncertainty remains over when they will be paid in full.
Guardian Trust, Canterbury Mortgage Trust, Totara First Mortgage Fund and AXA all suspended withdrawals from their mortgage funds last year putting more than a billion dollars on ice.
But demand from investors has put pressure on the companies to come up with repayment proposals.
Guardian Trust, which suspended its $249 million Guardian Mortgage Fund in July, said yesterday it hoped to make its first repayment to investors in the next few months.
It must first gain approval to alter the fund's trust deed at a meeting next month where it is also recommending the fund be wound up.
Guardian Trust managing director Greg Campbell said the firm's priority was to preserve investor's capital but admitted tough conditions were behind its decision to close the fund.
"The environment for mortgage funds generally is very difficult and is likely to continue for the foreseeable future."
Campbell said further payments to investors would depend on market conditions and the ability to liquidate loans or sell properties but it was likely to take two to three years to close the fund.
AXA New Zealand chief executive Ralph Stewart said it too was working through proposals for its frozen funds and was hoping to make a partial repayment to investors before the end of March.
Stewart said the firm was not planning to close its funds but was looking at ways to get money back to investors as soon as possible.
One option was to let the funds pay out returning money to investors as the mortgages were repaid.
But that was likely to take several years. Another option was to force mortgage-holders to refinance in order to pay back investors sooner.
Stewart said the risk with that option was that could see investors forced to take a discount on their capital repayment.
"All investors would like their money back as soon as possible. Finding something that works for everyone is the challenge."
Canterbury Mortgage Trust chief executive Graeme Main said it was planned to write to investors by the end of January with the hope of putting a proposal to them for a vote before the end of February.
If that was successful it planned to make its first payout to investors in March in the form of a 30c to 35c partial distribution.
Main said many investors were wanting access to their money and the trust believed making a partial payment was "the right thing to do".
It was not planning to close down the fund.
Totara First Mortgage Trust chairman Mark Hopkinson said his trust had started making payments to investors last year.
It paid out $12 million in December and was planning a further payment of at least $5 million in February.
Hopkinson said it had not made any decision on a wind-up of the fund but admitted it was getting harder to get money back from mortgage holders.
ON ICE
* Guardian Mortgage Fund: $249m
* Canterbury Mortgage Trust: $250m
* Totara First Mortgage Fund: $60m
* AXA Mortgage Backed Bond Fund: $230m
* AXA Mortgage Distribution Fund, Mortgage Investment Fund, Investment Portfolio: $225m
