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Igroup plans moves on correspondent market

Non-conforming lender igroup is set to challenge rival GMAC-RFC&#39s hold on the UK correspondent lending market as part of expansion plans by its US owner GE Capital.

igroup says it has also not ruled out further acquisitions as part of GE&#39s expansion plans.

igroup says it is looking at entering the correspondent or “through” lending market, a method developed in the UK involving a lender working with intermediaries and packagers to increase the volume of mortgages sold.

The intermediary packages the lender&#39s products, brands them and deals directly with the borrower. Once the sale is complete, the client and business is handed back to the lender who pays the intermediary a procuration fee.

igroup, which carries out about 98 per cent of its £160m monthly mortgage business through intermediaries, says this is a good way to generate short-term growth but warns that problems could arise in this market if all intermediaries do not meet criteria set by the lender.

igroup, which was bought by GE Capital last May, says the US financial giant is determined to make its mark on the residential market in the UK.

Communications manager Bob Sturges says: “In the short term, correspondent lending provides real opportunities for growth. GE Capital wants to be in the residential market in the UK and I would not rule out acquisitions.”

GMAC-RFC head of corporate communications Gina Collman says: “We take this as a great compliment as through lending is something we pioneered in the UK. We wish them every success.”

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