17:18 PM, 1st November 2011, About 11 years ago 1
A buy to let mortgage lender called in more than £1 million of loans when a landlord described as one of Britain’s worst slum landlords was arrested for fraud.
The Co-operative Bank ruined the rental business by demanding Joshua Danski repay his borrowings when managers were alerted to his poor business practices.
The bank indicated that his actions contravened their ethical, fair lending policy.
As a result, Dreamport Properties, Danski’s company that once ran 200 buy to let and house in multiple occupation (HMO) properties collapsed.
Meanwhile, Danski was sentenced to a community service order after pleading guilty to conspiracy to defraud at Newcastle Crown Court.
The court heard Danski mainly let homes to low income tenants on housing benefit and carried on claiming benefits in three cases after the tenants had moved out. He received £5,497 from Newcastle City Council and even tried to falsely claim for a fourth house.
Jonathon Goldberg QC, defending, said Danski had not lied to the council, but failed to tell them the tenants had moved out. “His business is now in administration,” he said. “The mortgages for the properties were with the Co-operative Bank. At one stage he was borrowing over £1m. When he was arrested he got a lot of bad publicity. The bank came to hear of this and they have a policy of ethical lending. They called in his mortgages in December 2010, and that was the end of the business.” Judge Michael Cartlidge sentenced Danski to 240 hours of unpaid work. Danski was previously accused of being a bad landlord by a BBC TV Panorama investigation.
Meanwhile, a couple lost a High Court challenge against Paragon Mortgages for calling in £6.9 million of buy to let loans after their rental business fell in to financial problems.
The unnamed couple said the lender promised not to take debt recovery action until they were three months in arrears but stepped in before that when they missed a £50,000 repayment.
The court heard they were professional landlords with £32 million of buy to let mortgages with Paragon before the credit crunch.
In 2007, their business ran into financial problems and by August 2008, they accrued mortgage arrears of £282,645. They missed the £50,000 payment in September 2008, so Paragon appointed receivers. In May 2009, the lender called in the loans.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Previous ArticleHMRC Task-Force Tracks Overseas Property Tax Cheats
Next ArticleLandlords and Holiday Homes May Lose Tax Discounts