Handful of GE clients feeling Blue Chip sting

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Most of the 380 GE Capital customers who borrowed money to take part in the ill-fated Blue Chip property scheme have refinanced but a handful face mortgage foreclosures, says Aaron Baxter, the finance company's New Zealand managing director.

Blue Chip, which had about 4000 customers, went into liquidation in 2008.

GE Capital had kept a low profile since, Baxter said yesterday. "We have been very focused on trying to work with our customers to come up with an acceptable arrangement."

He said most GE customers exposed to Blue Chip had continued to maintain their mortgage payments and had refinanced.

"But we have also, due to the nature of Blue Chip, created options and flexibility over the last three years."

These options involved allowing Blue Chip customers to reduce or defer some payments. GE Capital had also entered into some longer-term loans, he said.

Allowances were made for hardship and some life tenancies - which allow investors to remain in their homes until they die - had been created.

In some cases, there had been capitalisation of arrears.

But Baxter said GE Capital was about to foreclose on about 10 former Blue Chip customers, mostly because of difficulties in making contact with them.

He said GE Money had no involvement in its customers' decisions to get involved in Blue Chip and did not have a direct relationship with the company.

* GE Capital is a unit of New York-listed GE.