Mortgage PLC close to securing sale

Mortgages PLC was thought to be close to deciding on a buyer for the company last week. The sub-prime lender had initially hoped to exchange contracts by 19 October but the US attacks delayed events, putting the timetable out of sync.

Paul Howard, Mortgages PLC sales and marketing director, told Mortgage Strategy that the lender was now going through a period of due diligence. Bids for the company have been forthcoming and an announcement could be expected soon, he adds.

Sources close to the sale say that Mortgages PLC were taken aback by the level of buyer interest.

The US has so far proved to be a lucrative source of buyers for sub-prime lenders. US players Citigroup and GE Capital have already entered the UK sub-prime market through their respective acquisitions of Future Mortgages and igroup.

One source told MS: “We speak the same language. The UK and US do the same type of loans and are both in the sub-prime arena.”

One US lender keen to make a move on the UK market is Countrywide Credit Industries of Calabass, California – the largest independent residential lender in the US.

A source says Countrywide looked at Mortgages PLC and passed on the deal. A top Countrywide officer travelled to England to explore the purchase but the company ultimately decided against it. No other details were available. A positive acquisition would scotch rumours that the company will be taken apart by asset-strippers.