In normal operation, Northern Rock would sell additional mortgages to Granite in two scenarios:
■ To obtain new funding. Northern Rock would only sell additional mortgages into Granite if it was a better source of financing relative to other sources;
■ To maintain the size of Northern Rock's share of Granite. If the minimum seller's share is not maintained, Granite will eventually go into "pass- through" mode.
In both scenarios, Northern Rock would receive value for the sale of mortgages into Granite. Since September 2007, no mortgages have been sold into the Granite structure by Northern Rock. If Granite enters "pass through" it would no longer be possible for Northern Rock to sell mortgages to Granite. Granite could not be used to raise new funds in the future as entering "pass through" mode is irreversible.