MAJOR `potential job losses at Crossflatts-based UK Asset Resolution will be averted through a planned deal which will see its mortgage servicing business change hands.

The bank behind failed lenders Bradford & Bingley and Northern Rock is in exclusive talks with software and financial services provider Computershare.about divesting its mortgage servicing activities.

Computershare has been earmarked to take over UKAR's mortgage servicing following a competitive process.

If the seven year deal goes ahead, 1,700 UKAR staff in Crossflatts and Sunderland,will transfer to Computershare.

Richard Banks, UKAR chief executive, said the sale of £13 billion of mortgages last November represented around a quarter of UKAR's book and would have led to redundancies.

But, by divesting UKAR's entire mortgage servicing operation to Computershare and transferring staff would mean continuity of employment whilst ensuring stability and continuity of service to customers.

The £30 billion of assets which will be managed by Computershare will continue to be owned by Bradford & Bingley, Mortgage Express and Northern Rock Asset Management and there will be no changes to the terms and conditions of mortgages.

Customers will continue to have their mortgages serviced by the same staff and will not need to take any action.

Richard Banks said: "The ability for UKAR to proceed with the divestment of its mortgage servicing capabilities demonstrates the value of the excellent debt management and customer service skills it has deployed.

"Today’s announcement is great news for customers and the taxpayer. The transaction will establish a long term strategic solution for our mortgage servicing activities providing continuity of service for our customers and a sustainable future for our employees.”

If the deal goes ahead UKAR will retain around 250 staff who will continue to manage the balance sheets of NRAM and B&B on behalf of the Treasury and administer the Government’s Help to Buy mortgage guarantee scheme and Help to Buy ISA for first-time buyers.

Mr Banks last year described the proposed deal as transformational to the business which would result in “another name above the door” at Crossflatts for mortgage servicing operations.

He said: "If and when the mortgage servicing business is transferred to Computershare people will still turn up for work as usual and have coffee together in the atrium. The main difference is that the two operations will work behind separate closed doors .

"UKAR staff have always been aware that they were working themselves out of a job as our assets were disposed of and mortgages repaid. Divesting the mortgage servicing operations to Compuershare will avoid that."