Post on 20-May-2015
description
HML interest only pilot 2012
Strictly confidential
© HML 2012. All rights reserved.
High level benefits
Helping customers to remain in their own home after the end of their mortgage term.
Evidence to FSA pro-active action taken in contacting customers – regulatory risk is mitigated. Quality customer contact as opposed to just making contact.
Enable you to better understand the interest only risk within your portfolio.
27 customers (mortgage value £3.9m) actively progressing amendments to part & part/ C & I as a result of this pilot – improving credit risk of portfolio.
Achieve measurable customer response data - over 34% say they have a full repayment in place/ 4.2% have a partial repayment strategy – self-certified.
Raised awareness with customers some of whom are now instigating action that will help repay their mortgage.
2© HML 2012. All rights reserved.
Interest only client activity
3
Client 1 Client 2 Client 3
Approach:
’Customer response data gathering exercise (letter
and calls) that will support and inform follow up
strategies.’
Approach:
‘Regular customer contact (letter and calls), gathering
repayment strategy evidence. Instruct field agents near term expiry
where no contact achieved.’
Approach:
‘Options letter with access to a client branded
repayment/ part & part affordability calculator.’
© HML 2012. All rights reserved.
Interest only pilot – contact strategy
500 customers
Initial contact by letter, posing two questions:Do they have a repayment strategy in place ? and if so,
What type of repayment strategy was being used ?
If no response was received, three outbound call attempts were made two-three weeks later to ask the same two questions.
All conversations were scripted to prevent the risk of providing advice.
Where customers were unsure or did not have a repayment strategy in place, the HML Consultant was able to provide the customer with
A list of repayment strategy options.
Details on how to contact some independent financial advisers where the customer could discuss the options in more detail.
Information that other IFA’s were available.
4© HML 2012. All rights reserved.
High level results
5
34%
4%5%
18%
4%
35%
0% 0%
Full Repayment
Partial Repayment
Not able to pay
Unsure/ will look in to call back
Contact details not valid
No contact
© HML 2012. All rights reserved.
Successful contact strategy results
6
‘Only received 3 responses by letter - but no pre-paid envelope included.’
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Outbound calls – successful contact times
7
‘305 successful contacts with customers = 61%’
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Customers with ‘Full repayment strategy in place’
8
Most common repayment strategies
Sale of Property 26.74%
Multiple Repayment Strategies 26.16%
Sale of another asset 15.70%
Long Term Savings Plan 10.47%
‘172 customers in this sample said they have a repayment strategy that will fully repay their mortgage balance’ = 34.4% of 500 customers
© HML 2012. All rights reserved.
Customers with ‘Partial repayment strategy in place’
9
‘21 customers in this sample said they have a repayment strategy that will partially repay their mortgage balance’ = 4.2% of 500 customers
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No repayment strategy or unsure customers – Risk Profile
10
‘111 customers (£202.6m) from this sample have no repayment strategy or
unsure of what they intend to do’ = 22%
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Customer feedback
Response LTV Term Remaining Age Balance
‘Plans to switch to C & I next year’ 88% 16 years 42 £233,400
‘Plans to pay with inheritance, savings and will look in to repayment next year’ 78% 17 years 47 £84,000
‘Will be selling property near the end of term’ 93% 10 years 55 £124,500
‘Unsure what to do and will speak to an adviser’ 103% 23 years 40 £59,500
‘Mr is already overpaying (credit arrears balance of £8,800)’ 93% 19 years 46 £64,000
11
Customer feedback: “I’m impressed by your pro-active approach to contacting your interest only customers. ”
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Customers ‘moving to C & I’ following contact
12
Monthly payment increase from
interest only to repayment
Part and part or term extensions may need to be considered as options to support these customers.
© HML 2012. All rights reserved.
HML - Key facts
• HML is a leading specialist financial outsourcer providing solutions to the mortgage, savings and loans markets
• Over 20 years’ experience managing customer accounts for some of the world’s biggest financial institutions
• Over £43bn residential and commercial mortgages currently under management
• 1,300 employees based across 3 UK sites, including a 450 seat call centre handling up to 13,000 calls per day
• A technology platform that has undergone a multi million investment to enhance functionality, control, compliance and stability
13© HML 2012. All rights reserved.
Contacts
• Ben.Chambers@hml.co.uk
• John.grimbaldeston@hml.co.uk
© HML 2009. All rights reserved. 14