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Rooftop offers 15% golden goodbye discount deals

Rooftop Mortgages is offering clients discounts of up to 15 per cent to encourage them to remortgage with another lender.

The defunct Bear Stearns’ lender, which stopped lending in April last year, is offering some clients golden goodbyes with up to 15 per cent discounts to help them pay off their outstanding loan and mortgage with a new lender.

The strategy has been used by many of the former sub-prime lenders to scale down their mortgage books as many of their borrowers’ properties have reduced in value to the extent that it is difficult for them to remortgage away as the loan to value they would require is too high. This can leave many borrowers stranded on high rates.

It is, however, often the borrowers on the book that are not the furthest into negative equity who are offered these deals as it is less expensive for the lender to bring them back into equity.

Edeus was the first lender to offer such a deal to clients in 2008 and earlier this year, both Advantage and GMAC-RFC offered big discounts to some borrowers.

London & Country mortgage adviser Richard Morea says one of the brokerage’s clients has received a discount from Rooftop of £30,000, reducing their loan by 14 per cent.

Morea says: “This is a great opportunity for a select few borrowers but it is a sacrifice that suits the lender’s exit strategy. The market would be helped if more borrowers were given this type of break. Other lenders may have considered it but I doubt that the numbers stack up.”

Clayton Euro Risk strategy adviser Michael Bolton says: “Golden goodbyes are value-destroying and short-sighted. It is far better to negotiate the sale of a whole loanbook than to cherrypick the best borrowers. This will just leave the rump of the book that is impossible to sell.”

Rooftop Mortgages was a subsidiary of Bear Stearns, which was taken over JP Morgan last year. Crown Mortgage Management now manages its mortgage book. Neither was available to comment.

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