The arrangement means mortgages will be sourced and processed by Northern Rock in return for an origination fee income, before being passed to Lehman’s subsidiary SPML for completion, ongoing servicing and securitisation.
Download our news ticker
Northern Rock will remain exclusively a prime mortgage business, as non-conforming loans will not be written on its balance sheet.
The range features fixed and tracker rates from 5.35 per cent, with a range of status and self-cert deals across five adverse credit categories. The products will only be available through the broker network, with applications submitted through Northern Rock’s online system, which provides decisions, Key Facts Illustrations and case-tracking.
Anth Mooney, marketing director for Northern Rock, said: “We are the biggest UK mortgage brand to enter the non-conforming market to date. We see this move as a natural extension to our product portfolio. Our broker relationships will be strengthened by this opportunity and it also opens doors to a new group of intermediaries with whom we currently do little business.”
Get the daily news delivered to your inbox
James Cotton, mortgage specialist for London & Country, commented: “This setup is similar to Alliance & Leicester’s with Lehman’s, but it seems there will be more involvement by SPML. Northern Rock will probably come up with the rates and tweak criteria, while behind the scenes it goes to SPML. The market is so big nowadays that you don’t see enormous variation between lenders. It will sit very closely to others, but offer Northern Rock’s quirks on criteria and flexibility. There is enough room for good lenders to come in if they are offering something a bit different.”
