FOI request on sale of Mortgage Express BTL loans

16:28 PM, 12th March 2018, About 7 years ago 3

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Re: Freedom of Information request

Under the Freedom of Information act I would be most grateful if you could send information regarding the sale of Mortgage Express Buy to Let loans via UKAR to Rosinca Mortgage and Jasper mortgages.

Were these mortgages sold at a discount and if so what was the basis of that discount, e.g. X pence on the £.

Re: Freedom of Information Request dated 14^th February 2018

Thank you for your letter dated 14^th February 2018 addressed to Mortgage Express requesting information held by Mortgage Express and UK Asset Resolution Limited (“UKAR”) under the Freedom of Information Act 2000 (the “FOIA”).

You have requested that we provide you with information regarding the sale of certain Mortgage Express loans to Rosinca Mortgages and Jasper Mortgages, in particular whether these loans were sold at a discount.

The Mortgage Express loans (the “MX Loans”) you refer to were part of two separate asset portfolios sold by Bradford & Bingley plc (“B&B“) in March 2017 to Prudential and funds managed by Blackstone. Legal title to the loans included in these portfolios (including the MX Loans) was transferred to Topaz Finance Limited (“Topaz”) in February 2018, and Topaz will manage these loans under the Jasper Mortgages and Rosinca Mortgages brands. Please see the press release dated 19^th February 2018 available on UKAR’s website for further information in respect of these arrangements (http://www.ukar.co.uk/media-centre/press-releases/2018/19-02-2018?page=1&nextprev=1).

Regarding your request for information in relation to the MX Loans, MX is not a publicly owned company for the purposes of the FOIA and therefore is not required to fulfil FOIA requests. This is stated in the legislation that placed Bradford & Bingley plc into public ownership: Section 41 of the Bradford & Bingley plc Transfer of Securities and Property etc. Order 2008.

With regards to UKAR, while we can confirm that UKAR holds certain information within the scope of your request, we consider this information to be exempt from disclosure under Section 43(2) (Commercial interests) of the FOIA.

Under Section 43 of the FOIA, a public authority is not required to disclose information under the FOIA if the disclosure of such information would, or would be likely to, prejudice the commercial interests of any person (including the public authority holding it). We consider that the disclosure of the information UKAR holds which is relevant to your request is likely to prejudice the commercial interests of UKAR and those third parties who participated in the asset portfolio sales referenced above. In particular, the disclosure of such information could undermine the negotiating position of UKAR and its subsidiaries in any future sales processes and the willingness of potential purchasers to participate in any such sales processes.

Section 43 is a qualified exemption to disclosure under the FOIA and UKAR is, therefore, required to consider whether the public interest in maintaining this exemption outweighs the public interest in disclosing the information held by UKAR which is relevant to your request. For the reasons explained above, we consider that, in this case, the public interest in maintaining this exemption outweighs any public interest in disclosing information held by UKAR which is relevant to your request.

In the interests of providing you with the most helpful response to your request, we would also note that certain information regarding the asset portfolio sales referenced above is already in the public domain. For more information, please see the Annual Report & Accounts of B&B for the 12 months to 31 March 2017 (http://www.ukar.co.uk/~/media/Files/U/Ukar-V2/Attachments/press-releases/2017/b-and-b-annual-report-and-accounts-report-2017.pdf) and the Annual Report & Accounts of UKAR for the same period (http://www.ukar.co.uk/~/media/Files/U/Ukar-V2/Attachments/press-releases/2017/ukar-annual-report-and-accounts-report-2017.pdf).

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Comments

18:20 PM, 12th March 2018, About 7 years ago

The exemptions should be weighed against public interest in knowing how taxpayers resources are being used. However, if they have anything they would prefer not to be public then it is unlikely that any information will be released.
As the amount of debt transferred may already be public and the company accounts should also be public, you might not need FOI to put 2 and 2 together.
Does it really matter what the precise ratio is? The question is whether it is acceptable to discount the transfer of public assets?
You may ask for an internal review and could modify your request to simply ask if there was any discount at all. An answer to that without being specific would not harm commercial interests.

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Ken Smith

11:01 AM, 13th March 2018, About 7 years ago

Perhaps the press would be interested to see that response? Knowing if a discount was applied is surely of interest to UK taxpayers.

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Joseph

12:23 PM, 13th March 2018, About 7 years ago

Looked at the B&B accounts they sent a link to and a loss of c £400m was recorded on the sale of c12bn of loans. Prima facie a c3% discount.. They note 'this loss reflects the low interest rates payable on the loans'. This is a loss on their book value of the loans. The book value should have included an impairment for 'bad' loans therefore the 3% I think is a pure discount. The wording of 'low interest rate' does seem to concur with this. Thoughts?

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