HML faced inquiry from financial watchdog

It is understood that the Financial Services Authority probe centred on HML’s actions around 2007-08 and was still ongoing last year.

A spokeswoman for the company told the Yorkshire Post: “We worked closely with the FSA on the issue and the matter has been resolved.”

The investigation did not lead to a fine or censure for HML, a subsidiary of Skipton Building Society.

A spokeswoman for the FSA said: “We cannot comment on individual firms and we don’t comment on investigations even once they are concluded, unless they are concluded with enforcement action.”

HML is a third-party service provider which administers £43bn of mortgage accounts on behalf of lenders that lack the necessary infrastructure or capacity.

Its clients have included subprime lender GMAC‑RFC, which was fined £2.8m in 2009 for failing to treat customers fairly and forced to return £7.7m to borrowers.

The FSA exposed “serious failings” at the lender in relation to its dealings with customers experiencing arrears and repossessions between 2004-08.

The FSA slammed GMAC-RFC for excessive and unfair charges, inconsiderate repayment plans, inadequately trained mortgage servicing staff and issuing repossession proceedings too early.

GMAC-RFC ceased to be a customer of HML earlier this year when it brought mortgage administration in-house.

Last year, the FSA fined two other HML customers, Kensington and Redstone Mortgages, for poor treatment of customers facing mortgage arrears.

According to latest accounts, HML made a pre-tax profit of £64,000 in 2010, down from £3.4m in 2009.

It attributed the fall in profitability to heavy restructuring costs as the company reduced staff numbers from 1,966 to 1,460 and closed offices.

In separate news, the firm announced yesterday that it had won a new £1bn-plus mortgage administration deal and signed another standby servicing contract.

It also received two upgrades from independent credit rating agencies.

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