Vertex strengthens mortgage offering

Amanda Jarvis

March 30, 2006

The new agreements, with a combined total revenue of around £11 million, follow Vertex’s recent buy back of Egg’s share in Vertex Mortgage Services (VMS)1, meaning that VMS is now 100 per cent owned by Vertex Financial Services. The buy back allows Vertex to invest freely in the infrastructure of the business introducing full process automation for the end-to-end process and enabling movement of back office work to geographically dispersed teams in both the UK and Indian operations. In addition to the buy back, Vertex has also extended the mortgage services agreement that it has in place with Egg.

The first of the new contracts to be awarded is a three-year servicing agreement with Livingstone Mortgages Ltd, a UK special purpose company established by Dresdner Kleinwort Wasserstein (DrKW) in 2006.

Livingstone Mortgages Ltd will purchase near-prime mortgages that will be branded, originated through and distributed by a UK regulated third party mortgage lender. DrKW provides technical advice to Livingstone, while funding support will be provided through Beethoven, a DrKW sponsored Asset-Backed Commercial Paper conduit.

Vertex will then be responsible for servicing the books, including the disbursement of funds through to redemption, arrears management and any securitisation and whole loan book sales activity.

Vertex has also signed two separate contracts in Canada with GMAC Residential Funding of Canada, a wholesale residential mortgage lending company. The first is to implement its Optimus mortgage administration and securitisation solution and the second is to implement the Omiga mortgage application processing system.

Under the multi-year agreements, Vertex’s Canadian subsidiary will act as an application service provider to GMAC-RFC, providing its Optimus and Omiga solutions as a hosted portal service in support of GMAC-RFC’s underwriting, Master servicing and securitisation operations.

The new wins follow the announcement made earlier in March that Vertex had signed a contract with Deutsche Bank, worth a minimum of £45 million over five years, to help launch db mortgages, the new specialist mortgage lender owned by Deutsche Bank, into the intermediary mortgage lending market.

Commenting on the new business, David Edwards, managing director of Vertex Financial Services’ mortgages business unit, said: “These contract wins are a testimony to the business benefits that have resulted from Vertex’s acquisition of Marlborough Stirling and the combined expertise this has generated.

“Vertex Financial Services can now offer bespoke services with technology that no other provider within the mortgage outsourcing and services market can provide. I am very excited about the prospects for the company within a buoyant market.”

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