The company, which manages and procures books of mortgage on behalf of investors such as hedge funds has warned that the situation, which allows the acquisition of UK mortgage books without an FSA-regulated legal owner, has not been officially addressed.
Managing director Mike Culhane says: “Our firm becomes the legal owner of the book and we inform interested buyers they must deal with the borrower as the FSA demands.
“But in the market last year, there were a couple of books sold where the owner was not regulated.
“That is unacceptable because if the beneficiary chose to repossess anyone on that book, the FSA would have no one to talk to.”
Former Edeus chief executive Michael Bolton says: “A loophole does still exist and it is being abused by predatory investors of non-performing loans looking to circumvent regulation.”
The FSA admits that the legal owner of the mortgage portfolio does not have to be regulated but says it is an area of the market that it is keeping a very close eye on.
It says: “Any administrator taking on mortgage servicing business from an unregulated entity needs to ensure that the demands of the unregulated firm do not conflict with our regulatory requirements.”