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Private Label in venture to widen lending scope

Mortgage packager Private Label is set to merge with lender RFC-MSL to

form the UK&#39s first creator and trader of mortgage assets.

The link-up between the two UK subsidiaries of asset securitiser GMAC-RFC

means the company will have a funding policy wide enough to operate in all

lending mar-kets from mainstream to sub-prime.

The new company is able to do this by offering two funding channels of

“own lending” through the RFC-MSL division together with “Private Label”

lending, where it designs a product backed by an external lender.

The move means other lenders can “blind-lend” through the company, meaning

a high-street lender can operate in the sub-prime sector without its assets

being associated with the mainstream brand.

A lender can choose to “hide” its brand when releasing assets into a

lending market outside its conventional credit or funding policy or have

the mortgage products badged as its own.

Private Label founder and chairman Stephen Knight says at least three

high-street lenders are likely to become players in non-mainstream markets

through GMAC-RFC when the merger is completed at the end of the year.

Knight will become the new company&#39s executive chairman while RFC-MSL

managing director Colin Duggleby will become chief executive.

The Private Label brand will take dual prominence with the GMAC-RFC

masthead. The new company will have a staff of 400 and is expecting new

business of more than £2bn a year.

Knight says: “The worldwide corporate vision of GMAC- RFC incorporates a

commitment to transform the markets in which it operates. The creation in

the UK of a US-style originator, which will be both a creator and a trader

of mortgage assets, will transform the way mortgages are funded in the UK.”


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