Rooftop Mortgages denies closure fears

With the sector still adapting to the recent market turbulence across the US and UK financial sectors, it has been claimed that the US-funded lender was experiencing a notable downturn in business volumes. The source, who wished to remain anonymous, said the lender was only dealing with between 10 and 12 cases a day; a level of business which was unsustainable in the current conditions.

Combined with the issues surrounding its parent company, Bear Stearns, the rising cost of providing funds for adverse clients and its previous problems in the securitisation market, the source believed the future was bleak for Rooftop.

Of the securitisation issue, the source said: “The fact it has already had issues with its first securitisation, Farringdon 1, means that investors would have been edgy of Rooftop anyway. In the current environment, it will struggle to get a securitisation away so it’s going to have issues with further funding.”

However, a spokesperson for Bear Stearns, refuted the accusations. “Bear Stearns doesn’t comment on the business levels of any particular business or subsidiary. Rooftop is part of the fixed income division, about which Sam Molinaro, Bear Stearns’ global chief financial officer, commented: ‘We believe the earnings capacity of our fixed income franchises is firmly intact. We think the worst is largely behind us, we don’t see any permanent damage in our fixed income business at all’.

Molinaro also commented that the liquidity crisis had created an extremely challenging operating environment but that the firm’s underlying business is sound. “Bear Stearns remains fully committed to investment in and expansion of its European franchise.”