Loan book sales are not a new phenomenon in the mortgage market with lenders such as GMAC-RFC and Kensington Mortgage Company raising much of their funding in this way. B&W itself has made similar mortgage sales in the past.
But the move has led some in the industry to speculate that the sale is a result of concerns over the risk surrounding loan books in particular self-cert, as regulation approaches.
One industry source tells Mortgage Strategy: “This could be because of risk. Why would a company building up its loan book suddenly sell it off? It might have to do with capital adequacy rules whereby you have to have a certain amount of money doing nothing to counterbalance any outstanding debts.”
However, Dominic Toller, head of marketing at Bristol & West, says loan book sales, acquisitions, securitisation and other such methods of funding are a regular occurrence.
He says: “It's just something we do – we are always being approached by people. We've been overly successful in self-cert business so it is one of the options we are looking at and might consider doing in the future.
“But this is not a reaction to risk. We are aggressive in the self-cert market and have a clear strategy.”