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12:33 PM, 6th September 2013, About 11 years ago 58
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The Mortgage Express exit strategy has been a hot potato since at least 2011 when they first met a group of 70 landlords at an event organised under the Property Tribes banner.
They have been slated by landlords for imposing terms and conditions which were buried in small print and which are no longer adopted by the mainstream buy to let lenders.
The bottom line for MX though is that their loan book is now the property of the UK tax payers and the organisation is pretty much run by Civil Servants, accountants, debt collectors/councillors and insolvency practitioners.
The Government have imposed tough targets and deadlines on the new MX team to reduce the loan book and therefore, it was inevitable that strong arm tactics, which many would describe as bullying, would be used.
Naturally they have gone for the easy targets and started by selling the concept of making over-payments to people who were too naive to work out that repaying a loan which typically costs 2.25% rarely makes sense. It’s possible to get a better return on that with a cash ISA or a deposit account in a bank or building society! MX appear to have had scant regard to advising their clients to pay off more expensive credit first and they were never going to suggest investing any surplus into anything but reducing a debt with them were they?
The strong arm tactics have extended to imposing their “Right to Consolidate” which their contracts say allows them to use 100% of any sale proceeds to repay debts owed to them. It has even been implied on many occasions that if a borrower redeems one mortgage with Mortgage Express they can call in the rest! I’ve not seen these terms challenged in Court yet but I have come across borrowers who had stood up to Mortgage Express and there are quite a few examples on internet forums of MX having backed off. Bullies don’t like people who fight back.
General sentiment of landlords is that Mortgage Express borrowers should avoid reviews like the plague. The conspiracy theorists, of which I am one, are that MX have a very simple agenda and it’s not based on helping borrowers despite how they pitch it. It would appear the entire purpose of the meeting is for MX to persuade you to pay off or reduce your debt and/or to look for you to trip yourself up by admitting to breaching mortgage conditions which you were not necessarily aware of. Examples include:-
Would you know whether your tenants were claiming benefits though? What if they started claiming benefits after the tenancy started? What if the property became an HMO due to your local authority imposing selective or additional licencing?
Is it fair that MX could find one little problem, call in that loan and then call all the others in based on their right to consolidate conditions?
It has been mooted on several forums that MX have a target to collect a percentage of their loan book. I’m not aware whether the percentage target has ever been published but I’ve heard figures as low as 25% banded about. I suspect it’s much higher than that, otherwise, why would they carry the heavy administrative costs of their current activities as opposed to simply selling their loan book for 25% of it’s value? Perhaps they could and it’s a simple case of government ineptitude and politics preventing this from occurring? More likely, in my opinion, is that the government want to be seen to try to recover as much as possible of the tax payers bail out money.
If we knew what the desired recovery percentage was we could make suggestions. Let’s suppose the figure is 60%. Most buy to let landlords would happily refinance if their loans were discounted by far less than that. I’d certainly consider moving for a 25% to 30% write off of debt. Not every borrower would want or be in a position to go for such a deal but if only half did so, the remaining book, which I suspect would include a lot of toxic dent and low value assets due to negative equity, could still be shifted. They may only get 40 pence in the pound for these assets as a block sale but those extra 10% to 15% figures they would get from borrowers taking up their offers directly could well make up the balance.
I suspect it’s only a matter of time before Mortgage Express start offering golden goodbye deals to borrowers, it’s just a case of satisfying the tax payer that they’ve tried everything else first. Mortgage Express were given 7 years to exit and it is because we are into the final states of that period we are seeing them apply increasing pressure. Those of us who can survive the next few years will, I suspect, come out of this with a great deal but in the meantime we should expect the unexpected as well as underhand tactics.
What would you do if you were Mortgage Express?
What do you think Mortgage Express borrowers should and should not do to protect their interests?
Before you agree to do anything with Mortgage Express talk to your fellow landlords. Go along to Landlords Association meetings or post comments/questions below or on Property Tribes. If Mortgage Express do bully you, fight back. If you don’t want to meet them don’t meet them. If they get aggressive with you just bear in mind that there are thousands of other Mortgage Express borrowers who are likely to have had similar experiences. Focus on the ideas that are legal and make the most sense. There are reported to be in the region of 50,000 Mortgage Express buy to let borrowers.
Via this link we have an excellent story as it unfolds of a landlord who was being forced to sell his home by Mortgage Express. It’s a very long discussion thread which was contributed to by several landlords and property professionals. To cut a long story short the landlord got his MP on side and Mortgage Express backed off.
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Diana Donobauer
13:28 PM, 7th September 2013, About 11 years ago
Reply to the comment left by "Mark Alexander" at "07/09/2013 - 12:36":
Thanks for your response Mark. I will contact a solicitor. There was no court order to repossess the properties. To quote a letter from MX re. the now sold property:-
"The LPA receiver has notified us that they have secured vacant possession of the property and have recommended that it should be handed back to us by the way of voluntary possession to allow it to be sold.
We have therefore instructed an Asset Manager to proceed to sell the property. The property will be valued, and the asset manager will sell the property for the best price that might reasonably be paid.
Once the property has sold, the net proceeds of sale less any reasonable costs will be applied to your mortgage.
If the property is sold for less than the mortgage debt then we will hold you responsible for the shortfall, and may choose to pursue you for it"
What is 'voluntary possession? I certainly didn't volunteer!
I was in arrears by 2 months when the LPA receivers were appointed.
Mark Alexander - Founder of Property118
13:35 PM, 7th September 2013, About 11 years ago
Reply to the comment left by "Diana Stanger" at "07/09/2013 - 13:28":
Voluntary possession is what it says, you had to agree to give possession to MX for them to be able to sell it.
Did you sign anything?
Did they give you a date by which to respond to correspondence, failing which they would assume voluntary possession if you did not respond?
I'm not absolutely clear on the legalities here Diana but it does appear that you have been robbed of your properties, by legal means or otherwise, and I suspect the latter, hence you decision to take professional legal advice is a very good one.
Please keep us informed.
Diana Donobauer
13:45 PM, 7th September 2013, About 11 years ago
Reply to the comment left by "Mark Alexander" at "07/09/2013 - 13:35":
Thanks Mark, thats lifted my spirits. I didn't sign anything and I always respond to correspondence. I will keep you posted for sure
Rob
14:56 PM, 8th September 2013, About 11 years ago
Hi Diana
I have 3 mortage expresss BTL and i was like you 2 months in arrears a while ago on 2 off them, however i just paid extra over a 3 month period to clear it all i didnt get any of the hassle you had. But what i do find hard to understand is why on earth would a lender reposses your properties to sell on when you have cleared the arrears!! If you have cleared the arrears they should leave you alone shouldnt they? I agree with mark when he says he feels you have been robbed of your properties and i think a huge mistake has been made here By MX and hopefully a legal expert will help you take MX to the cleaners for it.
Txa Little
23:14 PM, 16th October 2013, About 11 years ago
Reply to the comment left by "Mark Alexander" at "07/09/2013 - 13:35":
I have to say the same thing has happend to us on two properties with Mortgage Express, we recieved the letter to say our properties had been sold. they took an £8,000 payment one day and then sent us the letters to say we owed them another £130,000 per property as this was the short fall.
we had been sold a mortgage for 220,000 on two properties. and they sold the houses for £80,000 approx and sent the bill. we signed nothing , the place had tennants and we had cleared arrears. they seemed to just make that decision over a a few weeks, we spoke to them often ( very often ) they called nearly every day, we felt being in touch was good as we could explain that a payment was going to them at a certain day , we made this payment and then as i say got the letter to say . . .er we now owed them £260,000.00.
Diana Donobauer
9:10 AM, 17th October 2013, About 11 years ago
Txa Little, it seems more hopeless the more you look into the situation with MX. They are doing nothing legally wrong, apparently there is a clause in all mortgage agreements that allows them to foreclose at will. They are no longer in charge anyway, UK Asset Resolution Limited are apparently employing over 2000 people to do exactly what they are doing to you and me, and what they intend to do with tens of thousands of other MX borrowers. Have a look at their nice website :-
http://www.ukar.co.uk/links
I hope 'the taxpayer' is aware of what they are really paying for. They will realise soon when there are so few private landlords left that there is a major housing crisis.
Mark Alexander - Founder of Property118
9:34 AM, 17th October 2013, About 11 years ago
@Diana and Txa - what professional advice have you sought to date?
Diana Donobauer
9:52 AM, 17th October 2013, About 11 years ago
Reply to the comment left by "Mark Alexander" at "17/10/2013 - 09:34":
Mark, the Financial Ombudsman looked into the case, I furnished them with all the evidence I have, and even after an appeal the found that MX had done nothing legally wrong and they were entitled to make these 'business decisions'. They could only look at MX, however, not the receivers or their agents who I had much to complain about, I didnt ask about UKAR but I don't suppose they would tackle them either.
I have a very good solicitor who specialises in property litigation, he also is at a loss to help at the moment, he says I have already done everything possible at this stage. MX have yet to approach me with a demand for the shortfall, he will step in at that point to help.
Txa Little
14:00 PM, 18th October 2013, About 11 years ago
Reply to the comment left by "Mark Alexander" at "17/10/2013 - 09:34":
We are seeking a lawyer to take up the case for the debt along with another lost property. i have searched the internet for similar cases and expected to find a group case bought against MX and BTL gone wrong. i know there is a process for mis sold mortgage under bad advise and we do fall in to the catorgory of being offered the money to buy two properties, without other avenues being put to us.. .and we have found a company to start athe process but it seems a big deal to bring about with MX because its like sueing the government, but we have to try. the process can try to . . "return you to the position you were in before the advice" we are pushing for how this could apply to us.
thank you for you reply or response, you can feel invisible on forums when you chip in . also i do note that your post say what should MX customers do . . i say stand together and go public anyone up for a march on white hall. . .im ready !
Mark Alexander - Founder of Property118
14:11 PM, 18th October 2013, About 11 years ago
Reply to the comment left by "Txa Little" at "18/10/2013 - 14:00":
A legal argument based on mis-selling will get you nowhere I can assure you.
What you should be asking your lawyer to challenge is UKAR's rights to sell your property, without your consent, despite having cleared your mortgage arrears.
I you need a referral to a good lawyer please let me know.
.