Figures to April 2010 show CHL experienced a 37% reduction in gross arrears and a 40% reduction in late arrears (over 90 days) since its peak in February last year. Arrears are now back at levels seen in Q4 2008 and the lender expects the trend to continue for the foreseeable future.
CHL puts the improving situation down to a pro-active approach from an experienced team focused on providing practicable solutions that benefit both borrowers and the lender.
CHL adopted a cautious underwriting approach during the ‘boom years’ which it says protected its mortgage book from many of the problems suffered by other lenders, particularly in the buy-to-let market.
Ahead of FSA guidance issued last year, CHL continues to deploy forbearance strategies and only considers repossession as a last resort with fees and charges also kept to a minimum.
Bob Young, Managing Director at CHL Mortgages, commented
“We are pleased to announce a continued reduction in our overall arrears position. This would not have been possible if it wasn’t for the pro-active and decisive action we have taken over the last couple of years.
"Even though it is still early days it seems as if our contrarian strategy is starting to pay dividends. This success is credited to a motivated team not hesitant to embrace change, but it would also be naive not to recognise the significance a lower interest rate environment has had on our business.
"That said we are not complacent and we are already changing our focus to deploy an exit strategy (from accounts in receivership) which will benefit our borrowers, employees and shareholders; at present our work in this area is all about timing and execution.”
