Securitisation could reduce portability options

Ramesh Sharma

April 22, 2006

Linda Will, managing director of Accord Mortgages, believed the selling of mortgages and their securitisation, especially in the non-conforming market, showed some lenders have no long-term interest in retaining the mortgage or the client so portability will become a thing of the past for them.

Will explained: “For a lot of lenders, the real interest is originating business rather than retaining it so if they sell the book, clearly they have no long-term interest in the business.

As they are not planning to retain the mortgage, lenders often don’t have the capability to allow portability and there’s no process in place to transfer it once the mortgage gets to port.”

Securitisation has become an increasingly important part of the funding of mortgages, especially as new players in the market look to establish themselves by acquiring books, but different lenders have different business models which affect their products and whether they offer portability.

Bob Sturges, director of communications at Money Partners, said: “We don’t allow portability on our mortgages. We’ve taken this decision because we know all our mortgages will be securitised.

“It’s a valid point as securitisation becomes more popular and could lead to portability becoming less widely available.”

GMAC-RFC this week announced they had completed over £2 billion of portfolio sales, but it believed its policy of securitisation didn’t affect the portability of its mortgages.

Craig Beresford, director of asset sales at GMAC-RFC, said: “Portability is very important to our clients and our introducer base and it doesn’t pose problems to our business model or our customers that we securitise.

“From our point of view, we will continue to offer portability within our mortgage range and we have no plans to change our policy.”

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