Royal Bank of Scotland is reportedly close to a deal to buy more than £13bn of Government-backed mortgages.
The bank, which is still backed by the taxpayer, is contending with US hedge fund Cerberus and TSB-owner Sabadell to seal the deal, according to the Sunday Times.
The Government acquired the home loans following the collapses of Northern Rock and Bradford and Bingley.
The Sunday Times reports that 131,000 Northern Rock home loans are up for sale, with a further offering from Bradford and Bingley.
A sale will reportedly be finalised early next year.
Chancellor George Osborne unveiled plans to sell off the book as part of his March Budget, with the funds raised used to pay down the national debt.
The Chancellor announced in August that permission had been granted to begin the sale of the government’s holdings in RBS.