B&B avoids £1bn in mortgage commitments

In December 2006, B&B agreed to buy £350m of mortgage assets from GMAC-RFC each quarter, with a further £1.75bn to be purchased by the end of 2009. However, B&B is known to have signed numerous agreements similar to the GMAC-RFC deal, and the borrowers it has acquired are defaulting at a far higher rate than the industry average. Under the new plan, B&B will buy £500m of loans from the final quarter of 2008 and between £225m and £250m of loans in the first quarter of 2009. B&B has suffered in the wake of the credit crunch, being a relatively small bank that had expanded its lending rapid...