Administration of a portfolio of equity loan mortgages on behalf of lenders

Tender description

The Homes and CommunitiesAgency (HCA) is seeking an administrator, a ‘Mortgage Administrator’ or ‘MA’, of loans entered into byborrowers (members of the public) participating in nominated Government home ownership schemes including:First Time Buyers Initiative, FirstBuy, HomeBuy Direct and Help to Buy equity loans. All loans are equitymortgages and always ranked second behind main lender mortgages and secured on the borrowers' home. Administration of equity loan mortgages includes: issuing clear and compliant (with all legislation) annualstatements to borrowers, collecting interest from borrowers and ensuring that correct sums are recovered fromborrowers on loan redemption and minimising arrears. The administrator will hold and manage a complete andaccurate database of the loans and their associated interest payments, which must be aligned to the HCA'sown records. To inform this aligned position and to support the HCA's accounting requirements, the MA willprovide regular monthly portfolio and transactional data monitoring reports to the HCA. The MA will also providemonthly reports of interest payment collection to partners (est. 100 house builders) of the HCA where they sharean equity loan interest in properties under the FirstBuy and HomeBuy Direct schemes e.g. the closed housebuilder ‘back book,’ (see below). Administration of the loans in the portfolio (regulated and non-regulated) mustbe compliant with all applicable legislation including all FCA and CCA requirements. Services also includes responding to enquiries from borrowers and applying agreed policies and procedures todeal with borrower requests e.g. for re-mortgaging, loan repayment or changes of parties to loans. The loan portfolio comprises more than 97 000 loans at end June 2015. The portfolio continues to grow (it isestimated c 20 000 new loans will be added in 2015-16 — July to March) and an anticipated further 120 000loans added by 2020 c 30 000 loans per year 2016 to 2020. All the currently envisaged new loan additions are‘Restricted Public Loans’ and therefore exempt from regulation now and to be in force from March 2016. The closed house builder ‘back book’ is a reducing proportion of the portfolio that comprises approximately20 000 current Consumer Credit regulated loans from the previous and now concluded HomeBuy Directand FirstBuy programmes where the lender party is usually a private house builder or Housing Association.This ‘back book’ of loans is regulated (and will be Regulated Mortgage Contracts from 21.3.2016) when theMortgage Credit Directive Order comes into force but it is not currently envisaged that new regulated loans willbe entered into. New loans e.g. Help to Buy are exempt from current and new regulation from 21.3.2016. The initial term of the proposed contract is 27 months but may be extended at the HCA's discretion for a periodor periods of up to 3 further years