HML’s 2010 accounts show the mortgage servicer was subject to a Financial Services Authority investigation in 2010.
The accounts say the investigation had been ongoing for some time and there was a risk the company could be fined or have to pay redress.
The 2010 results, filed at the weekend, say: “The company is in correspondence with the FSA following a thematic review. Investigations have been ongoing for some time and the issues involved are complex, particularly with regard to the application of the existing regulatory framework.
“It is possible that a liability may crystalise, whether from a fine, redress or both.
“At present the likelihood or quantum of any contingent liability is impossible to determine.”
But a spokeswoman for HML has told Mortgage Strategy that the investigation has concluded.
She says: “There is no ongoing investigation and the matter has been resolved.”
Mortgage Strategy contacted the FSA to confirm whether an investigation into HML had been concluded but the regulator says it is unable to comment on specific firms.
The servicer, which is rumoured to be up for sale, has had a number of its customers fined by the FSA in the last few years for their unfair treatment of borrowers in arrears, including Redstone Mortgages, Kensington and GMAC-RFC.
HML’s 2010 accounts reveal the company made a profit before tax of £64,000 for 2010, compared with £3.4m in 2009.
Its profit would have been £5.48m if it had not have been for restructuring costs.
The restructuring included the closure of two operational sites and the transfer of certain functions to its head office.
The servicer has also reduced staff levels from 1,966 to 1,460, while its assets under management fell from £47.46bn in 2009 to £43.47bn in 2010.
As a result the servicer has reduced its cost base and administrative expenses by £2m and invested in automated IT systems.
Its results say it has a number of potential new lender clients that could help generate income but this is being delayed because they are encountering significant delays in gaining FSA authorisation.