After vigorous due diligence and exploring various options, Irish Permanent International elected CHL as the preferred partner to manage this quality loan book. Including this book, assets under management for CHL, the Hampshire-based lender, now stand at £6.5bn.
The nature of this loan book, the properties, the borrowers and the products are complex and require experience and flexibility to be managed successfully.
For example, the portfolio’s borrowers are spread across over 40 legal jurisdictions with securities in England and Wales, Ireland and Northern Ireland. Borrowers include high-net worth individuals, corporates and trusts albeit with relatively low LTVs and exceptionally low default rates.
The deal is a significant one for CHL. It marks an increase of mortgages under management by nearly 5% during 2010 and signals confidence in CHL to manage mortgages on behalf of originators. CHL will manage all aspects of this loan book including general administration, delinquent accounts and recoveries leaning heavily on its existing infrastructure and footprint across the UK and Ireland. Although CHL is not actively in the market for similar deals it stresses that it will always be interested in opportunities that make commercial sense for the business.
Bob Young, managing director of CHL Mortgages, said: “Even though we are not currently originating new loans this shows that when it makes commercial sense for us to do so, we are still very much active in the market.
"The complexity of this portfolio is high to say the least and it has been obvious to us that few other lenders would have been able to take this on. Although we were a ‘preferred option’ to manage this portfolio we nonetheless went through a rigorous process of due diligence and cost justification. The flexibility and track record of CHL has been a key positive in being able to take on this portfolio.
“Since the start of the Credit Crunch we have reduced arrears on our own portfolio significantly while managing our cost base downwards.
"The addition of nearly £300 million is a significant milestone proving that CHL has the know-how and vital experience in the buy-to-let sector in order to be able to manage this challenge successfully. In these times, what specialist lender would not be delighted to take on the management of good quality assets and growth approaching 5%?
“This deal is a real positive step for CHL and marks the end of a very successful year for our business. CHL’s commitment to growth has not wavered and this applies as much to the investment and resource we put into our recruitment and training practices, as it does the mortgage book itself.
"Given the quality of people we have within the business we are 100% confident that, even with the portfolio’s complexity, we have staff with the skills and experience to ensure this is managed successfully and that that all parties benefit from this new arrangement.”