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Hedge fund eyes US servicing platform

Cambridge Place Investment Management – a London-based hedge fund manager backed by Trigold founder Martin Finegold – is rumoured to be looking to buy a US servicing platform to cash in on the expected boom in sub-prime delinquencies.

CPIM, in which Finegold is a partner, declined to comment on the rumours, but one US adviser, who asked not to be named, says Cambridge wants to purchase a servicing platform that can handle sub-prime loans.

The source adds: “It isn’t interested in lending, but it wants to be in the default business.”

The default business is a hot niche in the US. Even though residential loan delinquencies have been relatively mild, some industry executives, such as Wall Street firms that have mortgage conduit operations, are bracing themselves for a tidal wave of loan delinquencies as sub-prime adjustable rate mortgages readjust, causing some consumers to go delinquent on their loans.

Payment option ARMs form about 10% of the US origination market, which could total $3trillion this year.

Default servicers make their living by curing delinquent ‘scratch and dent’ loans. Sometimes the default servicer forecloses on the property, but often they set up new payment plans with borrowers hoping to make the loans current again.

Countrywide Financial Corporation, the largest lender in the US, recently revealed that 75% of its payment option ARM customers choose the cheapest mortgage payment option each month. Countrywide CEO Angelo Mozilo is so concerned about the high ratio of ARMs the company has that he has written letters to customers warning that US rate rises could lead to knock-on rises in their payments.

Finegold is best known for masterminding Kensington Mortgages back in November 1994. He served as chairman and chief executive of the company until 2000 but still has an investment in it.


Nationwide base rate row goes on

Nationwide has come under fire again over the way it displays the Bank of England base rate on sourcing systems. Last week Mortgage Strategy re-ported that the society had asked sourcing system Trigold to change the base rate back to 4.5% on its system despite the recent 0.25% increase. One broker claimed Nationwide was falsely […]

Exclusive deals from GreenBank

GreenBank Mortgage Services has launched exclusive products with The Mortgage Business and Swift 1st. In its TMB line-up is a self-cert tracker with 500 cashback and a refund of valuation fee, and a buy-to-let House 2 House tracker. The Swift products allow unlimited adverse with discounted rates from 6.33% to 80% LTV.

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Guide: how to change your auto-enrolment support

As we approach the two-year milestone of auto-enrolment, employers have had the opportunity to truly assess the capabilities of their chosen support. They are also now realising that getting to the staging date was the easy part, and that support is required for almost every aspect of the day to day running of their scheme. With the three-year re-enrolment window coinciding for many with the total removal of commission and Active Member Discounts from pension-related products and services, as well as the introduction of the pension charge cap in April 2015, many employers will have no choice but to review their support options. But, what is involved in transitioning your auto-enrolment scheme away from your current support options? This guide from Johnson Fleming aims to outline some of these key areas and provide information and discussion points on what you need to consider.


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