A source told Mortgage Introducer that the speculation of GMAC-RFC’s interest in Northern Rock and move into the prime mortgage sector was ‘more than just gossip’.
The source said: “GMAC-RFC is very interested in entering the prime market, as it can’t re-invent itself in medium or heavy adverse. It’s not a bad thing because that’s where the majority of business is. I would be very worried if I was a prime lender, because the non-conforming lenders are aggressive and used to a quick turnaround. I can see them giving them a real run for their money.”
GMAC-RFC has refused to comment on the speculation.
Cerberus owns a 51 per cent stake in GMAC-RFC. Currently, the other declared bidders for Northern Rock are US private equity group JC Flowers and the Virgin Money consortium.
Mark Chilton, chief executive of Homeowners Mortgages, said: “It’s curious because GMAC-RFC doesn’t have a retail presence. Though it’s a top 10 lender, its brand is not that well known. Northern Rock needs to put a credible brand behind it and that is the appeal of the Virgin Money bid. All bids are at an early stage and it will depend on the support from the Bank of England for the transitionary period. I can see rivals objecting to the funding being guaranteed by the Bank long-term.”
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