Rossbank had been acting as a mortgage originating and processing centre for KMC. The centre, which has a team of CeMAP-trained operatives, took calls from borrowers who had been rejected by mainstream lenders and from brokers with sub-prime clients.
The decision has led to a war of words between the two companies with KMC accusing Rossbank of failing to meet service standards. Rossbank, in turn, has insisted it met all the requirements in the contract and claimed that KMC wanted to re-negotiate the original deal and pulled out when it failed to get its way.
Rossbank CEO Kieran Hedigan, said: “We have invested millions in building origination and underwriting IT systems specifically for KMC as part of this contract. Rossbank will recover this investment over the five years of guaranteed minimum payments. We expect KMC to honour their contractual obligations to Rossbank in full and not renege on a legal agreement.”
Hedigan continued: “KMC are a big, successful and highly profitable lender. It may be that they feel they can impose their will on a small private firm like Rossbank, but what kind of message does that send out to the brokers, packagers and valuers on which KMC’s success has been built. If John Maltby and his management team continue in this manner then we will appeal to the wiser and more experienced judgment of Peter Birch, their chairman and Martin Finegold, KMC’s principal shareholder.”
He added: “The board of a public company cannot want Kensington’s integrity to be questioned in the very year that regulation arrives to police and correct such behaviour. As far as we are concerned the agreement remains in force and we will continue to fulfill our obligations to KMC.”
Responding to Hedigan’s statement Alastair Pate, director of marketing and strategy at Kensington, said: “Kensington did not wish to comment on the Rossbank relationship because it considered that it was bound by a duty of confidentiality to Rossbank.
“However, we are forced to correct a number of inaccuracies in Kieran Hedigan’s statement. Kensington has terminated its relationship with Rossbank due to Rossbank’s failure to rectify material breaches in its delivery of certain services under the agreement.
“Kensington acted in good faith, in accordance with the specific termination provisions of the agreement and after giving Rossbank significant additional time to correct their breaches.”
Hedigan responded by saying: “People think that just because you are a small company you will roll over, but we won’t.”
