Scarborough announces £180 Million Mortgage Portfolio Sale

Press release published on 10 July 2006 by Scarborough Building Society

Scarborough Building Society Group has sold a mortgage portfolio worth £180 million to Lehman Brothers, the global investment bank.

The mortgages were purchased from the Scarborough’s wholly-owned subsidiary North Yorkshire Mortgages Ltd (NYM), and the assets will continue to be serviced by the Scarborough’s growing third party administrator SMS Mortgage Services.

For the Scarborough, this latest partnership with a major financial services institution is part of wider growth plans.

It follows the announcement earlier this year of a trading and administration deal with Basinghall Finance PLC – a subsidiary of German investment bank WestLB – which has seen £660 million of mortgages transferred since March 2006. SMS continues to administer the assets on Basinghall’s behalf.

The recent deals align with the top-20 UK building society’s intention to expand its mortgage origination and servicing activities.

They follow three years in which the Scarborough has undertaken a major programme of investment in its business, processes and systems, with particular emphasis on providing its mortgage administration subsidiary SMS Mortgage Services with the latest, end to end capability.

Chief Executive John Carrier said: ‘We have a clear strategy of expanding our mortgage origination, trading and administration activities, by building relationships with major partners. We see SMS Mortgage Services as a key player in this role in the future.

‘The latest deal further expands our business, and again underpins our ambitious plans to grow the mortgage origination and servicing arms of the Scarborough Group.

‘In today’s extremely challenging financial services environment,
adaptation, innovation and the seizing of new business opportunities are key to achieving success.’

Commercial Director Martin Frazer added: ‘We have clearly stated ambitions of expanding our mortgage origination, trading and administration activities.

‘We have invested extensively in some of the most modern IT infrastructure available today to underpin these plans in terms of buying and selling large mortgage portfolios efficiently and supporting major clients in medium to long term third party processing relationships.

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