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Kensington to clarify B&B loan book deal

Kensington is trying to clarify its position with Bradford & Bingley following today’s nationalisation of its mortgage loan book.

Last week B&B restructured its loan book buying deals with both Kensington and GMAC-RFC.

In its interim results at the end of August B&B announced that it had extended its contract with Kensington by 25 months and the value increased by £132m.

In total it will purchase loans of a maximum aggregate value of £1.2bn from Kensington by April 2011.

A spokesman from Kensington says: ” We have a forward-flow contract with B&B to buy our loan books that lasts until 2011.

“We are currently clarifying with B&B what effect, if any, this will have on the current arrangement.”

The deal with GMAC-RFC was amended to see B&B buy £500m of loans in Q4 2008 and £250m in 2009

A spokesman for GMAC-RFC says: “We are pleased to have reached this agreement which provides GMAC-RFC with certainty in this market, both by providing a secure exit of the loans it has originated and in terms of the equivalent premium that would have been paid should the agreement have run the full term.”

This morning he said there will be no further comment on the matter.


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