Merrill Lynch and Abbey are rumoured to have signed a deal to jointly back the new lender being formed by the ex-SPML dream team.
As exclusively revealed by Mortgage Strategy last week, Merrill is in the frame to fund the lender, which is being set up by Southern Pacific Mortgage Limited’s former sales and marketing director John Prust, former director of credit Stuart Aitken and former managing director Bill Cherry.
Mortgage Strategy understands that Abbey will form the backbone of the operation, providing distribution and passing on sub-prime clients who are not suitable for its prime proposition. It will also help set the lender up.
Merrill and Abbey will then sec-uritise the products.
One source says: “Most mainstream lenders are moving into the specialist sector but they all have the same problem – they haven’t got people with sub-prime expertise. It looks like Abbey is trying to get decent people behind this venture.
“However, Prust and Aitken have mainly dealt with packagers, so does this mean Abbey will be dealing with packagers as well?”
Sources say one of Prust’s reasons for leaving Lehman Brothers-owned SPML was its decision to go into the direct-to-broker market.
Prust has been unavailable for comment since his departure.
Roger Morris, managing director of em-financial, says: “Prust has always been passionate about packager originators. I am certain he will re-emerge with the old SPML people – a packaging-focussed management team. He will bring the biggest packaging proposition to the sub-prime market the world has seen.”
Prust is believed to be taking his crack team of former colleagues from Lehmans and SPML. Mortgage Strategy has discovered Prust, Ait-ken, and Cherry, as well as SPML’s former director of operations An-gela Davies and former finance dir-ector Andrew Townsend are all directors of a dormant firm listed at Companies House.
Abbey and Merrill declined to comment.