GE 'threats' upsetting Blue Chip investors

Blue Chip investors Bruce and Judy Bartle. Photo / Martin Sykes

Financier GE Capital is threatening Blue Chip victims with mortgagee sales as pressure mounts before a landmark court decision.

Christchurch Blue Chip investor Helene Philpott says she and at least a dozen other investors have recently received notices under the Property Law Act that GE will put their homes up for mortgagee sale unless they reach a settlement within a few weeks.

She said GE had offered the group reverse mortgages. They were older people with little means of paying, so this would mean they could live in their homes until they died at which time GE would sell the properties.

But Philpott said Blue Chip victims were anxiously awaiting the outcome of the Bartle case, which could be significant for their own situations.

Whangarei pensioners Bruce and Judy Bartle went to the High Court in April seeking to be relieved of $630,000 in mortgages they owe to GE as a result of investing in Blue Chip. They claimed among other things that the loan documents were forged.

Like the Bartles, Philpott - who is in her early 70s - said her occupation had been written down on the loan documentation as "self-employed" so that she could qualify for a mortgage and invest in Blue Chip.

The practice is understood to have been widespread. In reality a pensioner would have never qualified for such a loan.

Philpott believed GE was putting pressure on investors before the Bartle decision and its potential implications.

This was creating a huge amount of distress. "I just can't believe the distraught, the hysterical, the suicidal people."

She got a frantic phone call from a 79-year-old woman this week who had just received a Property Law Act notice. "It's an hour on the phone trying to calm the poor soul down."

But Greg White, managing director of GE's retail arm GE Money, denied the lender was trying to get in ahead of the judgment.

"I absolutely refute that in the strongest possible terms. That is not what we're about, we are a responsible lender."

He confirmed the company had offered solutions such as reverse mortgages to struggling customers, and some had taken them up.

White said GE was also keen to get the Bartle decision so it could move forward.

But he claimed it was not a precedent-setting case because the circumstances of each Blue Chip investor would be different.

Barrister Paul Dale, who is acting for the Bartles and dozens of other Blue Chip victims, said that was "a nonsense".

The Bartle matter was representative of a large number of other cases. "If [the judge] finds in our favour then we will certainly be using it as a springboard for a whole raft of other claims."

He was currently preparing an application for another group of about 10 elderly investors facing mortgagee sales. "All save maybe one have got forged loan applications."

Until the issues were resolved he was confident a judge would not allow houses to be sold out from under people.

Dale said there had been a rise in the number of mortgagee notices, and he believed GE wanted to get things moving.

He commended the lender for offering reverse mortgages. It was being done without prejudice, meaning investors retained their rights should the Bartle decision go their way.