Lender reports pre-recession arrears levels on buy-to-lets

Lender reports pre-recession arrears levels on buy-to-lets


A Hampshire-based specialist lender last week revealed that its arrears across its but-to-let mortgage book are now back at the same levels as 2008, before the start of the credit crunch. 

Figures for quarter 1 2011 reveal that only 1.95% of all CHL’s mortgages accounts were over 90 days in arrears. This is a 45% drop on the same period 12 months ago and CHL’s levels for those accounts over 30 days in arrears have also seen fallen significantly.


The Fleet-based lender is also able to reveal positive arrears news with regard to the £295 million buy-to-let portfolio it manages on behalf of Irish Permanent International. From the time it took on the management of the book in December last year to the end of quarter one 2011 CHL has achieved a 50% reduction of the arrears levels within the book.


The portfolio is particularly complex with a variety of properties, borrowers and products. Borrowers are spread across over 40 legal jurisdictions, with securities in England, Wales, Ireland and Northern Ireland making this arrear reduction achievement even more noteworthy.


CHL has achieved these results with a strong focus on its in-house collections strategy and processes, asset management and a complete emphasis on ensuring embedded TCF when dealing with borrowers.


Bob Young, Managing Director at CHL Mortgages, said: “The start of the Credit Crunch back in 2008 seems a particularly long time ago given what has happened in the intervening years. The fact that CHL’s arrears levels are now back in line with a time before the market upheaval shows the quality of our collections processes and the skills and experience of those who work in this part of our business. 


"Our arrears levels peaked back in February 2009 and, since then, have continued with the downward trend back to where we are today. While there is considerable concern in the industry about the high arrears and possession levels of some specialist lenders who operated during that time, CHL is happy to report that we fully expect our figures to continue moving down during 2011 and beyond.


“The falling arrears position of the £295 million portfolio we began managing from December 2010 also shows the effectiveness of our operation and our ability to have an immediate positive impact. This is down to a combination of factors including the experience of our team, both at head office and out on the road, and the targeted nature of our borrower communications and collections. 


"We have been particularly focused on embedding TCF into everything we do which means we have dedicated teams for certain areas, no predicative dialling arrangements, and there is always a focus on reaching a mutually beneficial compromise with our borrowers. We have also kept full control of these arrangements in-house and this has undoubtedly helped produce the very pleasing results we have been able to announce today.”



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