"The main reason is that we’ve got alternative sources of wholesale funds such as Liberty (an Australia-based wholesaler) coming into the market now so we don’t need them (contributory mortgages) anymore," Cairns says.

"The market has moved on. The Model A was a great car in its day."

Another reason is that the profit margins available on contributory mortgages have been fiercely squeezed of late and sourcing funds from the Australian wholesalers provides better margins, Cairns says.

The Australian wholesalers are also more flexible sources of funds. And then there are communication needs: "It’s an awful lot easier dealing with one wholesale fund than having to deal with maybe 50 different contributors," he says.

"We also found that, in an extremely intense residential market, we had plenty of contributors but it was getting harder and harder to find good mortgage proposals. The market’s just so competitive."

Contributory mortgages have received a bad press after a number of high profile failures, most notably in the Reeves Moses contributory mortgage saga, and publicly announced investigations by the Securities Commission of many such schemes.

Last year, the former manager of the Reeves Moses Hudig contributory mortgage business, Peter van Nieuwkoop, was found guilty on a number of charges relating to four contributory mortgage schemes dating back to 1999.

Many operators have since withdrawn from offering such schemes.

But Cairns says the main reason contributory mortgages have run into problems is that their promoters were using them inappropriately.

"They’re not suitable for developments or for land sub-divisions" and it’s very hard to comply with the regulations governing contributory mortgages which are "very, very proscriptive," he says. Cairns Lockie only ever used the vehicle to fund residential mortgages.

"If you obey the law, they’re all right," he says.