Former sub-prime lender DB Mortgages is transferring the servicing of its £1.6bn mortgage book from Vertex Mortgage Services to Target Loan Servicing, according to Money Marketing’s sister publication Mortgage Strategy.
The book represents approximately 60 per cent of Vertex’s total servicing portfolio and will be transferred by November 2012.
As a result, Fitch has placed Vertex Mortgage Services UK residential mortgage primary servicer ratings of RPS2- sub-prime and RPS2- prime, on rating watch negative.
The negative watch implies that the servicer ratings will be either downgraded or affirmed following continued monitoring of the situation over the next six months.
Fitch believes the loss of the portfolio may adversely affect Vertex from an operational perspective.
But its says given that VMS signed a contract with Tesco in 2010 to provide origination and mortgage administration services once Tesco commences lending in 2011, the impact of decreasing assets under management could be limited depending on origination volumes.
Furthermore, the transfer will not affect Vertex’s servicing activities relating to its remaining three clients and 8,700 loans, which it estimates to be worth £1.1bn.
The UK RMBS transactions affected by the servicing transfer are:
- Eurohome UK Mortgages 2007-1 plc
- Eurohome UK Mortgages 2007-2 plc RPS2-prime
The Financial Services Authority fined DB Mortgages, part of the Deutsche Bank Group, £840,000 in February for irresponsible lending practices and unfair treatment of customers in arrears.
Money Marketing recently reported that talks had broken down between Vertex and Skipton Building Society over the acquisition of the society’s third-party mortgage servicer subsidiary HML.