According to The Telegraph, Toscafund, a financial management firm has been inviting some borrowers to redeem mortgages at between 15% and 20% below the "normal" redemption figure.
Apparently Toscafund has been busy spending £255M on buying up portfolios of mortgages at below their normal value to enable banks to raise capital. The Telegraph indicates that the fund purchased the mortgages at between 60 and 70% of the debt value. By offering the opportunity for borrowers to redeem these mortgages at the discounted rate Toscafund is able to crystallise the difference between the price paid for the portfolio and the redemption rate.
Toscafund is also raising a new fund to enable it to make mortgages directly to borrowers.
The new fund is expected to be managed by a team hired from a building society with a view to lending later this year.
Martin Hughes an ex analyst from Credit Lyonnais is instrumental in this project.
For conveyancers any new lender wishing to come into the market must be a good thing in a week when considerable uncertainty has arisen from the election result and matters in Greece.