Jun 11, 2013 ... Please provide the total amount of mortgages held by NRAM at the end of
financial year 2010-11, 2011-12 and. 2012. If NRAM uses a different ...
100 Parliament Street, London SW1A 2BQ
Mandeep Dhillon Policy and Operations Officer
UNCLASSIFIED Mr Paul Morgan By e-mail:
[email protected]
E-mail:
[email protected] www.ukfi.co.uk
19th June 2013 Dear Mr Graham, 1.
I am replying on behalf of UK Financial Investments (“UKFI”) to your request for information dated 26th May under the terms of the Freedom of Information Act 2000 (“the Act”).
2.
You asked for the following information in relation to mortgages held by Northern Rock (Asset Management) (‘NRAM’): 1.
“I am interested in information for mortgages held by NRAM and only those mortgages where the rate of interest currently applicable is less than or equal to 1.5 % (i.e Bank of England rate + 1.0 % or less). The information I am requesting is
2.
Please provide the total amount of mortgages held by NRAM at the end of financial year 2010-11, 2011-12 and 2012. If NRAM uses a different reporting year, please provide the data as at the end of last three reporting year.
3.
Has NRAM received and approved application for borrow back or additional borrowing of funds on existing mortgages since April 2009. If yes, what was the total amount of funds that the bank lent on existing mortgages either via borrow back or additional borrowing on existing mortgages. Please provide the information requested in Q2 for 2010-11, 2011-12 and 2012-13. Please provide the number of cases where the total sum of money lent via borrow back or additional borrowing was in excess of £200K for a single account. Please provide the largest amount lent every year.
4.
Please advise that what steps did NRAM/ UKAR took to ensure that tax payer’s interest were protected when lending money at such low rates of less than or (and possibly at a loss to the taxpayer). There was and still exists a very clear opportunity for a borrower to borrow back from NRAM at less than 1.5% and lend the money further to a third party thus making an easy profit at tax payer’s expense.
5.
Did the approval process for borrow back or additional lending require the borrower to disclose the intended use of funds borrowed? More specifically did the bank permit the borrower to lend the money further to a third party? Did the bank carry out any due diligence on the actual use of money? Is there an obligation on the borrower to disclose to the bank the actual use of money borrowed if it is different from what is stated in the application?
6.
If the bank’s policy does not permit the use of mortgages funds borrowed for further lending, what action would the bank tank if these instances of fraud are brought to its notice and how should these be reported?”
3.
Following a search of our records, I can confirm that we do not hold information relating to the particular mortgages held by NRAM which you have requested.
4.
It may be helpful if I briefly set out the role of UK Financial Investments Ltd. We have been set up to manage the Government’s investments in financial institutions, at arm’s length from Government and on a commercial basis. UKFI’s remit is to manage the Government’s shareholdings commercially to create and protect value for the taxpayer as shareholder. Much of our focus is on formulating and implementing a strategy for selling down our holdings over time, consistent with the Government’s firm view that it has no wish to be a permanent investor in UK financial institutions. UKFI manages the investments in the banks, and does not manage the banks.
5.
Our framework document between HM Treasury and UKFI sets a requirement that UKFI will not intervene in the day-to-day management decisions of investee companies, with the companies retaining their own independent boards, which will manage the banks and determine their strategy.
UK Financial Investments Limited is a company registered in England and Wales with company number 06720891. Its registered office is at 27-28 Eastcastle Street, London W1A 8DH.
UNCLASSIFIED
6.
You may wish to raise your enquiries directly with UKAR, the holding company for NRAM as the body best placed to advise you on your detailed queries. Please see the following links for further information: http://www.ukar.co.uk/.
7.
If you have any queries about this letter, please contact me on the details provided above.
Yours sincerely, Mandeep Dhillon Policy and Operations Officer UK Financial investments Ltd Your Rights to Complain under the FOI Act If you are unhappy with the service you have received in relation to your request and wish to make a complaint or request an review of our decision, you should write within two months of the date of this letter to UK Financial Investments, 100 Parliament Street, London SW1A 2BQ or email –
[email protected]. If you are not content with the outcome your complaint, you may apply directly to the Information Commissioner for a decision. Generally, the ICO cannot make a decision unless you have exhausted the complaints procedure provided by the Treasury. The Information Commissioner can be contacted at: The Information Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow, Cheshire SK9 5AF.
UK Financial Investments Limited is a company registered in England and Wales with company number 06720891. Its registered office is at 27-28 Eastcastle Street, London W1W 8DH.
