Second Portfolio Sale Good News For Growing Relationship

Press release published on 1 November 2006 by Scarborough Building Society

A second, £50 million, mortgage portfolio sale has further boosted the asset trading and administration partnership between Scarborough Building Society and global investment bank Lehman Brothers.

This latest transaction brings the total value of business activity between the two partners to more than £200 million in the last four months.

It is also expected to provide a stepping stone for more future sales, further cementing Lehman Brothers’ position as one of the Scarborough Group’s significant partners.

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

Lehman Brothers is the latest in a series of major international partners to do business with the Scarborough over the past year, in deals totalling more than
£1 billion, and further announcements are expected shortly.

These relationships form the hub of the top-20 Society’s ambitious plans to grow its third party mortgage administration and servicing activities.

They follow three years in which it 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.

Commercial Director Martin Frazer said: ‘I am delighted to announce this latest deal, which further enhances what is already a very strongrelationship with Lehman Brothers.

‘This and a number of other significant third party partnerships are central to our ambitious strategy of growing and enhancing our mortgage origination, trading and administration activities.

‘Having spent the past three years investing in some of the most modern IT infrastructure available – coupled with our decade-and-a-half of experience in administering third party mortgages, and our personalised service offering – we are confident we have one of the strongest propositions in the marketplace for third party clients.

‘We expect that this will bring fresh opportunities to strengthen our existing relationships in the future – as well as attracting more major international clients.’

Lloyd Cochrane, director, UK mortgage trading at Lehman Brothers,commented:“Through this latest transaction with Scarborough Building Society, Lehman Brothers continues to build on its position as a leading mortgage originator and whole loan trader. We look forward to developing the relationship with the Scarborough Group.”

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