BTL repossession by NRAM

by Readers Question

14:46 PM, 11th August 2016
About 2 years ago

BTL repossession by NRAM

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BTL repossession by NRAM

NRAM is repossessing our BTL property, because we have exceeded the term! My wife and I purchased a BTL property in June 2007 unfortunately despite telling our advisor this was a long term plan to pay off our residential mortgage and for retirement he advised an interest only mortgage for 7 years.NRAM

When I asked what we were supposed to do after 7 years he said just get another mortgage! I was declared bankrupt in 2011 and although we have maintained the mortgage payments NRAM are now repossessing the property.

Due to my bankruptcy (discharged in July 2013) we have been unable to arrange another mortgage. NRAM state that since they were bailed out they are unable to offer additional lending and therefore cannot extend the term for us although NRAM’s website states they can offer additional lending in exceptional circumstances nobody seems to be able to say what they class as exceptional circumstances!

The mortgage is for approximately 50% of the value of the property so the bank will have no problem recouping their money, but we will end up losing the property which was bought with the intention of repaying our home which is on an interest only mortgage also with NRAM.

We now face the prospect in 12 years time when our mortgage ends of losing our home and also I face the prospect of having no money for retirement. The advisors who arranged the mortgage deny arranging it even though I provided them with a letter from NRAM stating it was they who arranged the mortgage.

I have contacted the FSA and the Financial Ombudsman all to no avail.

Dene



Comments

Neil Patterson

14:54 PM, 11th August 2016
About 2 years ago

Hi Dene,

If it was an advised mortgage sale, regulated by the FSA (now FCA), as opposed to an unregulated unadvised commercial BTL transaction there is no way the FCA regulated advisor, his firm or his Network can deny the transaction.

You will have the following paper work of the advice give:
Full Fact Find
KFI (Key features indicator)
Trigold or similar search results showing the most appropriate mortgage available
Suitability Letter stating why the mortgage you took was the most suitable option in your circumstances.

If you do not have or have never had all of the above it was unlikely to be a regulated sale.

However you should contact the Network the firm belongs to as they will know if mortgage transactions at that time were undertaken on an advised basis or not.

Dene Unsworth

20:37 PM, 11th August 2016
About 2 years ago

The Financial Ombudsman initially said they would be able to help but then said the mortgage was classed as an unregulated commercial mortgage and so couldn't help. I have very little paperwork from when the mortgage was taken out and what I do have has no mention of the company who arranged the mortgage on it although I am sure they were more than happy to claim their commission for arranging it!
I have desperately tried to find another mortgage and also contacted NRAM as I don't believe they should be providing mortgages for such a short term without checking how it is going to be repaid, they said it wasn't their responsibility and they just provided the mortgage requested, ironically I received a phone call from NRAM last month expressing concern at how I was intending to repay my interest only residential mortgage which still has 12 years to run

Regards

Dene

Jon Pipllman

8:18 AM, 12th August 2016
About 2 years ago

If the mortgage is being correctly classified as an unregulated commercial mortgage then you are on quite a sticky wicket. As Neil says, if it was advised, then you might have a chance of recovering something if you are quick and effective with your next moves.

Your efforts just now, imo, need to be split equally between looking for a replacement mortgage (can your wife get one in her name?) and discovering if the NRAM loan was advised or not.

Neil Patterson

8:47 AM, 12th August 2016
About 2 years ago

Hi Dene,

As this appears to be an unregulated non advice mortgage sale deemed to be a commercial transaction you are considered, rightly or wrongly, by the FSA at the time to be an expert investor and they will unfortunately not offer you the same protection or redress as a main residence borrower.

Your only official line of recourse will be making a formal complaint to NRAM to see if you can overturn the decision not to extend your mortgage term. Can I ask if the mortgage has always been kept up to date with no missed payments as this will greatly assist.

The mortgage product may have been chosen at the time, despite the short term, as the best fit in your circumstances. Eg it may have been the only lender to match LTV, income, rental stress testing and property type criteria or the best of the bunch that did. Therefore there may have been no option other than to accept a shorter term.

However if there were longer term options with experience it is sometimes better to accept a more expensive deal for the caution of having a longer term on the basis that you never know what the future holds.

With regards to NRAM checking how a mortgage is to be repaid, again rightly or wrongly, on a commercial deal it is acceptable to say that the mortgage will be repaid by the sale of the asset or other assets.

I am very sorry for the situation you find yourself in as I have spoken to many readers who are in the same boat with mortgage terms coming to an end and finding it very difficult now to remortgage for various reasons.

I would recommend you seek professional qualified and regulated advice to consider the best plan moving forward. Options may included selling the BTL now, repaying down some of the main residence interest only loan and converting it to repayment, but you would need someone to consider all aspects of your financial planning.

John Constant

11:31 AM, 12th August 2016
About 2 years ago

Dene, you don't say how old you are and what age you intend to retire, but there may be a lender who could help, depending upon your full circumstances.
We (HD Consultants) have been working closely with Property 118 for a few years now, and I would be willing to review your situation, with a view to securing a BTL remortgage for you. If you could pm me with your contact details, I would be happy to have a discussion on how we might be able to help.

terry sullivan

12:20 PM, 12th August 2016
About 2 years ago

try your MP?

Dene Unsworth

12:26 PM, 12th August 2016
About 2 years ago

The mortgage has been kept up to date since 2013 unfortunately prior to this there were missed payments due to my bankruptcy. We tried to obtain a mortgage in my wife's name and were advised this could be done if we were to legally seperate! I also started proceedings to evict my tenant in June last year to enable me to sell the property, unfortunately even though my tenant had asked me to evict her (due to her arrears) to enable her to get alternative accommodation she then counterclaimed! We were due back in court in June of this year but had already been to court with NRAM in April who had been awarded possession in 56 days I therefore settled out of court with my tenant. The only reason they haven't taken possession already is that the tenant is now asking for an extension and there is another court hearing in October. I have tried constantly to get NRAM to extend the term but they wont budge although I got the impression after one telephone conversation that it was partly due to the fact the mortgage is on a very low rate tracker!
I am 53 years old and my wife is 47

terry sullivan

12:30 PM, 12th August 2016
About 2 years ago

family friends etc

Dene Unsworth

12:35 PM, 12th August 2016
About 2 years ago

Reply to the comment left by "terry sullivan" at "12/08/2016 - 12:20":

I wrote to my MP and all I received was a comment regarding agencies who may be able to help if you are having financial difficulty! I even wrote to No 10 and didn't receive a reply. I have tried writing to newspapers and had no response

Dene

Seething Landlord

13:56 PM, 12th August 2016
About 2 years ago

As a matter of interest, what was the basis of the counterclaim from the tenant? Had you perhaps failed to protect the deposit?
NRAM make it very clear in their correspondence and literature that they are not able to extend mortgage terms and the only thing that surprises me is that they did not start repossession proceedings when there were missed payments previously. I hope that others can help you out of this mess but suspect that the best you can hope for is that the sale proceeds will be sufficient to cover the mortgage debt and receivership costs. It is hardly surprising that they now want to be reassured that you have a realistic plan in place to enable you to repay the loan on your home when that becomes due.

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