Mortgage specialist Firstfolio has entered into exclusive negotiations to acquire a controlling interest in boutique lender Calibre Financial Services.Calibre has not sold a new loan for at least two years, but continues to manage a $440 million book and maintains a warehouse facility through Westpac.For Firstfolio, the deal offers a different funding structure and an opportunity to use the Calibre platform to develop a new product. Firstfolio executive director Mark Flack said the group was also attracted by the strength of the Calibre executive team, most of whom are former executives of Australian Mortgage Securities and are also shareholders in the business. Calibre's key executives will stay on, subject to agreement.Firstfolio bought a minority stake in Calibre last week from the liquidators of City Pacific, a founding investor in the group.Firstfolio has wholesale funding agreements with Commonwealth Bank and ING Direct, as well as National Australia Bank's third-party funding arm, Advantedge. Loans written under these agreements go on the funders' balance sheet.Calibre has a warehouse structure, with equity supporting the loans, and carries the loans on its balance sheet. In 2007, it completed a $200 million issue of residential mortgage-backed securities.Flack said: "Calibre has a multi-product platform. It would give us the flexibility to design products in niche areas, such as loans for self-managed superannuation funds, or asset finance."He said Firstfolio was encouraged to pursue the deal when it saw the revival of the RMBS market this year. "RMBS is still a questionable solution if you are out in the market competing on the lowest price, but if you are targeting niches, as we plan to, it is a useful funding source."Flack said Firstfolio was not planning to get into the non-conforming market, although if an investor wanted to put some capital into it the group would look at it.Firstfolio has $21 billion of loans under management - built up from $12 billion in 2008, through an aggressive acquisition program.