U.K. building societies are increasingly studying securitization as a funding option. Treasury officials at Yorkshire Building Society and Skipton Building Society say that while they are still not ready to jump into the market, they are not ruling out residential mortgage-backed deals as an alternative fund raising tool. Officials at both societies say the are not in need of funding at the moment, but potentially could issue RMBS deals in the future, probably starting with non-member assets.
A few building societies have completed RMBS deals of non-member or so-called non-conforming mortgages in the past, Nationwide Building Society, among them. Building societies are independent mutualized financial institutions (similar to savings and loans) that fund themselves mainly through retail deposits and specialize in mortgage lending. RMBS deals of member mortgages are inherently difficult, because if a building society member's mortgage is transferred to a special purpose vehicle, it becomes unclear whether the member retains his membership privileges.