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Mortgages plc in loan design deal for regional societies

Mortgages plc is setting up an initiative aimed at helping regional building societies compete with bigger lenders.

The scheme, called Mutual Co-Operative, will work with a group of societies to design products and criteria, agree the terms and volumes of business, sell the mortgages over a set period and pass tranches of assets on to the members.

Mortgages plc is encouraging mid-sized societies to join the Co-Operative to tackle pressures on margins. It says societies and specialist lenders are finding it harder to compete with bigger, mainstream competitors and this initiative gives them both the chance to target new customers.

Furness Building Society says it is keen on joining the Co-Operative to target new sectors such as light-adverse sub-prime and hopes to generate about £20m a year.

Mortgages plc sales and marketing director Peter Beaumont says: “We have the distribution base and expertise to originate margin-positive business and the societies have the opportunity to collectively design and control the exact profile and volume of business.”

Furness chief executive Rob Cairns says: “We have bought mortgage books in the past but these have been worth less than £30m. This is an opportunity to work with other societies to generate business through an extra distribution channel.”


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