Some 27,000 customers of banks that were nationalised during the 2008 banking crisis have had their mortgages sold to a consortium led by the US bank JP Morgan.
The sale of the £2.7bn bundle of mortgages, branded Northern Rock and Bradford & Bingley, was welcomed by the chancellor, George Osborne, who said any proceeds would be used to reduce the national debt.
“This is another important step in our long-term economic plan to clear up the mess from the financial crisis, deliver a more secure and resilient economy and get taxpayers’ money back,” Osborne said.
JP Morgan led the consortium for Commercial First, a Yorkshire-based specialist mortgage lending business, which intends to package up the mortgages through a bond issue. The 27,000 customers, who also include customers of B&B’s Mortgage Express, will be transferred to Commercial First over the next 12 months; until then they continue to have their mortgage rates set and payments processed by their existing lenders.
The deal was conducted by UK Asset Resolution, the holding company for the parts of Northern Rock that remain owned by taxpayers and the parts of B&B that were nationalised in 2008.
“The continued fair treatment of customers was a key consideration for UKAR in selecting the winning bid. The sale will not affect the terms and conditions of the mortgages in this portfolio and the 27,000 customers impacted will be contacted directly by B&B, NRAM or MX and the new lender at the point at which servicing responsibility transfers,” UKAR said.
UKAR, which has a £40bn loan from taxpayers, has previously sold £465m of mortgages to Virgin Money, which bought the “good” part of Northern Rock two years ago and is now in the process of floating on the stock market. One Savings Bank has previously bought a £400m consumer loan.
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