A simmering tussle over the terms under which mortgage mangers source funds from a former subsidiary of ANZ is warming up, with one non-bank leader accusing the new owner of "stealing" income.Late last year, Columbus Capital agreed to buy the Origin wholesale mortgage distribution business from ANZ. Since then, a number of mortgage managers have disputed the ability of ANZ to transfer contracts to Columbus.The more serious issue relates to the rates at which Columbus provides funds to mortgage managers and which may result in borrowers with some non-bank lenders having to pay higher interest rates at a time when market rates are coming down.One of those managers, Firstmac, said yesterday that it was "instigating legal action against Columbus."Firstmac contends that Columbus ignored contractual arrangements that Firstmac had in place with ANZ via Origin, mainly in relation to a "locked-in costs of funds going back longer than 10 years." Kim Cannon, chief executive of Firstmac, said Columbus increased funding costs to the mortgage managers by as much as 1.6 percentage points late last year, a figure that Banking Day has also heard from other Columbus customers.This had the effect of removing the majority of the mortgage managers' management fees they receive on their portfolios, according to Firstmac.Cannon said: "They've basically come in and stolen our income without foundation."Cannon said that Columbus also failed to pass on cuts in cash rates to borrowers.Cannon said Columbus funded about A$150 million of Firstmac's loan book of $5 billion. He said Origin funded $1 billion in loans at one point.Aussie Home Loans is another key customer of Columbus. ANZ's Origin business was once the primary funder of Aussie's loans made under its own brand.When quizzed on this issue late last year, Andrew Chepul, executive director of Columbus, said Banking Day was "hearing a lot of rumours", but he would not clarify any details.Chepul did not respond to a call yesterday for a comment on the matters raised by Firstmac. Columbus was already a wholesale funder in its own right before buying Origin, with a couple of mortgage-backed pools financed through two Nautilus trusts placed with investors in 2007 and 2008.Malaysian life insurance company MAA Holdings controls a majority stake in Columbus. It bought new shares in its associate last year to help fund the Origin takeover.