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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.

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