GMAC-RFC completed a £1.1bn portfolio sale to Bradford & Bingley just a day after it confirmed it would not be making substantial changes to its sub-prime lending criteria.
The lender alerted its packaging partners by email last Wednesday that it could potentially be withdrawing all its sub-prime products over 75 per cent loan to value as well as raising rates.
But GMAC-RFC said the following day that after further consideration it had decided not to go ahead with reducing its maximum LTV although corporate relations manager Julie Gaskin says it could not rule out any future changes.
Regarding the email it sent out to its packaging partners, Gaskin says the firm is deliberately over-communicating during these turbulent times.
The portfolio sale to Bradford & Bingley is understood to be behind GMAC’s U-turn. The sale comprised prime, self-cert and buy-to-let assets and was completed on August 31.
GMAC recently made changes to its lending criteria which saw it no longer accept unlimited adverse business and reduce its maximum LTV from 95 per cent to 90 per cent as well as increasing sub-prime rates by 0.75 per cent.
Director of asset sales Craig Beresford claims that the deal with Bradford & Bingley is its biggest-ever sale.
Beresford says: “Key partners such as Bradford & Bingley have enabled GMAC-RFC to grow its franchise in the UK in both the primary and secondary mortgage markets.”