Speculation is growing about the future of one of Londonderry’s largest employers. Homeloan Management Ltd – HML – employs 444 staff in the city, administering mortgages on behalf of banks and building societies. The company specialises in administering loans in the troubled sub-prime mortgage sector.
HML is owned by the Skipton Building Society, which was recently downgraded by the Moody’s credit ratings agency and put on negative watch by another agency, Fitch’s.
The downgrade was related to Skipton’s rescue takeover of Scarborough Building Society at the end of last year. A spokeswoman for Skipton said the society is working with both agencies to strengthen the ratings.
A merger is currently taking place of HML with SMS, the mortgage administration division of the Scarborough Building Socierty. HML has four divisions in Derry, Skipton, Burnley and Glasgow, as well as the SMS facility in Scarborough. It administers assets of £46bn for 30 lenders.
According to reports in the specialist financial press, Skipton is seeking to sell HML, which could strengthen its capital reserves to improve the society’s credit ratings and provide cash to make further acquisitions – possibly of other troubled building societies.
A spokeswoman for the Skipton Building Society refused to confirm or deny suggestions that HML is for sale. “We do not comment on rumours and speculation,” she said.
HML has been closely associated with the dramatic rise in sub-prime mortgage lending – which has been blamed for the global collapse of the financial markets. The company is now seeking to broaden its range of clients.
In a recent interview in the magazine Mortgage Strategy, HML’s managing director, Brian Brodie, said that he did not believe that the sub-prime market is finished. “I’d like to think of this as a hiatus, rather than the sector being dead and buried,” he said. Brodie added: “We need to expand beyond start-ups and sub-prime to deal with some of the more mainstream mortgage lenders.”
The trade union representing staff at Skipton Building Society and HML is Surge. Its vice chair, Lynda Kemp, said the union was unaware of plans to sell HML. Asked whether it had concerns over the future of the operation at Derry she said: “I am not prepared to make any further comment.”