OFT probes Brain buying MortgageStream
The Office of Fair Trading is to investigate whether Mortgage Brain’s acquisition of MortgageStream breaches UK competition laws.
It will consider if the new combined entity will result in a “substantial lessening of competition” within the sector.
In December, Mortgage Brain agreed terms to acquire the point-of-sale and case management system provider.
Mortgage Brain claims the acquisition will mean 13.4 per cent of authorised UK mortgage firms will be using Key, Mortgage Brain’s point-of-sale system, or MortgageStream.
In November, it emerged that Mortgage Brain had lost £418,000 as a result of the Office of Fair Trading terminating its plans for a merger with TrigoldCrystal.
Mortgage Brain revealed in December 2010 that it was in discussions with the board of TrigoldCrystal and had agreed to buy the business for £6.8m. However, the deal was scuppered by the OFT in March 2011 over concerns that it would lead to Mortgage Brain being too dominant in the sector.
The OFT referred it to the Competition Commission to investigate further, which led to Mortgage Brain abandoning its plans.
Mortgage Brain chief executive Mark Lofthouse says: “The OFT is looking at whether this deal falls within its jurisdiction and whether there would be a lessening of competition. Our view is that we would have circa 13 per cent of the market post-acquisition and, as such, we would be hopeful things would conclude successfully.”