View more on these topics

GMAC seeks buyer for rejected £1bn book

GMAC-RFC has revealed that it is looking for a lender to take up the remaining £1bn of mortgages rejected by Bradford & Bingley last week.

B&B finalised a deal to take on £500m of loans in Q4 2008 and between £225m and £250m in Q1 2009, after when the agreement between the two firms expires.

Under the original terms of the agreement, signed in December 2006, B&B agreed to buy a minimum of £350m of UK mortgage assets each quarter. It had £1.75bn remaining to be purchased before the end of 2009 which meant GMAC-RFC was left holding £1bn rejected by B&B.

Before its rescue, B&B assets had been downgraded by rating agencies to just above junk status. Moody’s said the GMAC-RFC books had “exacerbated pressures” on B&B’s asset quality as its arrears rose to 3.1 per cent, twice the industry average.

A GMAC-RFC spokesman says: “We are looking to sell the other £1bn of the mortgage book. Our strategy regarding the book has not changed.”

GMAC-RFC this week revealed that it is to join its European counterparts to become an international asset management group, temporarily leaving the UK lending market. It will now manage £16bn of assets round the Continent but will be axing 130 UK staff, including its entire sales team.

Kensington Mortgages, which agreed to increase its forward mortgage agreement with B&B in August by £132m, has revealed that it is in talks with the failed bank to clarify the new situation regarding the agreement.


Osborne turns on City bankers

Conservative Shadow Chancellor George Osborne has laid the blame for the current financial crisis at the door of City bankers.


News and expert analysis straight to your inbox

Sign up


    Leave a comment