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Skipton BS purchases sub-prime mortgage portfolio from Preferred

  • 21/05/2003
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Skipton Building Society subsidiary Amber Homeloans has purchased a £70m sub-prime mortgage portfoli...

Skipton Building Society subsidiary Amber Homeloans has purchased a £70m sub-prime mortgage portfolio from Preferred Mortgages.

The deal is the first between the two lenders and is at the smaller end of the scale as far as mortgage portfolio acquisitions go, although there have been relatively few sub-prime-only sales to date.

Gordon Jolly, managing director of Amber, said: ‘The purchase of mortgage portfolios, such as this, is an integral part of Amber’s strategy as a creator and trader of mortgage assets. We buy a variety of product types and this sub-prime acquisition will further increase our spread.’

John Webster, business development director at Preferred, said: ‘We are very pleased to have cemented our relationship with Amber through this, our fist loan sale to them. This type of transaction provides us with important flexibility in our funding arrangements.’

The purchase of residential mortgage portfolios has only existed in the UK since 2000, and this announcement is just the latest in a number of similar purchases. This trend is expected to continue into the future.

Stephen Knight, executive chairman at GMAC RFC, commented: ‘Buying and selling assets is very good for borrowers. Under UK regulations lenders cannot sell portfolios unless the buyer agrees to maintain the original terms of the loan. It frees up lenders to lend more and means that if the deal was agreed under attractive terms it must be maintained by the buyer.’

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