Dunfermline social mortgages likely to go to Nationwide
Nationwide has been announced as the Bank of England’s (BoE) preferred bidder to purchase Dunfermline Building Society’s social housing loans section.
Earlier this year, the Nationwide acquired Dunfermline’s mortgages, branches and savings business, however, the social housing loans section was passed to a subsidiary of the BoE, DBS Bridge Bank. It now looks likely that this will pass to the Nationwide.
The BoE stated:
“It is business as usual for the business’s customers. They can contact the business in the usual way and should continue to make repayments as normal. Customers of other parts of the former Dunfermline Building Society’s businesses now owned by Nationwide, or operated out of the Building Society Special Administration Procedure, are unaffected.”
The Dunfermline Building Society collapsed after it was revealed it has purchase more than £150 million of mortgages deemed to be high risk as well as partaking in a high level of commercial property lending. When the global market for high risk mortgages collapsed, Dunfermline was unable to take it.
Since the market for high risk mortgages collapsed, the repercussions have been felt worldwide and the mortgages market is likely to change substantially as a result.
Posted on June 19, 2009
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