Adelaide mortgage business hits the skids with debts of AU $10 million

A South Australian mortgage business has been placed in voluntary administration.
John West and Associates, based at Campbelltown in Adelaide, has debts of more than $9.5 million.
More than 50 investors are affected.
Administrator Austin Taylor, from Meertens Chartered Accountants, says the collapse is the latest in a series of high-profile property-related mortgage scheme failures, which have included Westpoint and Fincorp.
"This company was borrowing money from investors on the basis of promissory notes and it was then using that money and lending it out to people at a higher interest rate usually secured with mortgages," he said.
Hope of some return for mortgage investors.
Mr Taylor says, at this stage, it appears there will be some return for mortgage investors.
"But it's far too early to say exactly what that might be," he said.
"It's going to really depend upon the state of the mortgage loans, the underlying security that they're secured against and the capacity of borrowers to repay.
"That's going to be a process that will take a little while to get through."
Company director John West says he is confident that, given time, all the money will be recovered for investors.
"There are a number of mums and dads who are currently hurting from this particular freezing of funds, where they depend on those funds," he said.
"The majority of funds would be with larger, more sophisticated investors but I think it's irrelevant whether a person is a small investor or a large investor. The reality is they've trusted somebody."
John West and Associates is also being prosecuted by the Australian Securities and Investments Commission for alleged breaches of the Corporations Act.
Source: ABC