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I have been a buy to let mortgage broker for several years and recently heard the most alarming story in my career regarding the Mortgage Express Exit strategy and their “right to consolidate”.
I was contacted by a long-standing client recently as he had had a disturbing conversation with Mortgage Express. After calling them in relation to a Compulsory Purchase Order on one of his properties he had been told that redeeming one mortgage would mean Mortgage Express could exercise their “Right to Consolidate” – basically force him to redeem all of his mortgages with them.
When we discussed their revelation I found it highly unlikely that such a clause would exist, and even if it did no lender would enforce it, but even if they should try then our Ethical Guardian, the Financial Services Authority, who have placed Treating Customers Fairly at the heart of their regulations would never allow such a thing to happen.
It had to be a conspiracy theory.
I was wrong!
I called Mortgage Express and they confirmed what they had already told my client.
I then called the FSA, apparently this is a “business decision” and they don’t regulate buy-to-let mortgages. “But what about the ethical implications” I naively questioned. The FSA do not see this as an ethical issue. They are quite happy for Mortgage Express to force a customer in to redeeming 20 mortgages despite the fact the accounts have never been in arrears.
With the help of some resourceful contacts I have been provided with Mortgage Express’s Right to Consolidate Definitions and Q&A Document.
It makes for some grim reading.
They hold all the cards.
If you hold any Mortgage Express mortgages then now would be a sensible time to investigate your position with them and put in place a contingency plan.
Looking to the future: spread your risk. Ease of use, low rates, sensible fees are all attractive reasons to use a lender, but avoid complacency. Use a number of lenders to provide your funding and insulate yourself as far as possible from being left in a similar situation, because sometimes, you are not being paranoid – they really are out to get you.
I’m obviously fighting this for my client so if you are in a similar position or would just like to discuss mortgages in general please complete the contact form below to get in touch. I have not disclosed my identity in this article for legal reasons, but my first name is Matthew.
PS – I’m also a member of The GOOD Landlords Campaign.
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