Mortgage Express Right to Consolidate

Mortgage Express Right to Consolidate

16:19 PM, 14th February 2013, About 9 years ago 53

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Mortgage Express give landlords good reason to worryI 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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Comments

by Anon

8:04 AM, 6th March 2013, About 9 years ago

Word has it that MX have poured over their documentation to see if they can do the same thing with their margins as BOI. Their conclusion is that they can't.

As MX don't have an all monies charge over properties they have financed they can't insist on taking 100% of any sales proceeds to reduce their exposure. However, they do have the powers to call in all loans if you pay off one which are in fact much nastier. Therefore, if you need to sell a property MX have the right to make you sell them all and repay all of their loans. If they actually do that complaints might be upheld and being government owned these days they don't want that grief. Therefore, they often negotiate, using the threat of using their powers to call in all loans to persuade you to overpay and use surplus sales proceeds to reduce other mortgages with them. It's a game of poker really.

If you do need to sell, the best thing to do is not disclose that to MX. Tell them you have an opportunity to refinance one property away from them and ask for written permission to do this without them enforcing their rights to consolidate. If they agree, and they most probably will as it all counts towards their redemption targets, then all you need do is a one day bridge the day before your sale is completed. Lots of people purchased properties and financed with MX using back to back financing so it's interesting to note that the same tactic is now being used to get away from them with the minimum of pain.

by Brian Smart

18:29 PM, 25th June 2013, About 9 years ago

I have come across this forum while trying to find out if Mortgage Express have been laid to rest yet as I thought they had effectively been in administration for five years. They have ruined my life, lied and cheated their way through court, double crossed me when I had struck a deal with them and used stealth procedures to search Land Registry and put charging orders on all my properties.

This is the first place I have found where people have shown any concerns about the way MX operate. More general forums have responded to post from people like me basically telling them to stop moaning and get on with their lives and they have just got what they deserved.

Over the last five years I have lost all hope of having income from property in retirement as it has all been taken from me, directly or indirectly. I have had one court case after another and lost them all, walking away believing that justice is never done. And many cases proceed without a hearing and no chance to defend.

A quick example: in one repossession hearing in 2009 I told the judge that the MX "evidence" was an identical computer generated sheet of paper for every case they brought (there were 3 that month) and it was all a pack of lies. He asked the MX representative to comment but the man shrugged his shoulders and said "this mortgage is unregulated, we don't have to do anything".

And that is the crux of all my problems. I am in my sixties and have had mortgages all my life but no-one ever explained to me when I started investing in property that these mortgages did not have any rules and the lender could do what they liked. I get no sympathy for my ignorance of course, as I am told I should have known that. To me that's like saying when you buy a train ticket you should be aware that there is a type of ticket that doesn't guarantee you a ride to your destination and there is no refund if the train company doesn't get you there, and there is no route to compensation and there are no legal safeguards to protect your rights. You don't know what you don't know! In this case that a mortgage is a mortgage is a mortgage - NOT!

I see from reading this forum that the FSA are not interested in whether there is fair play and I already know that the Financial Ombudsman will not "interfere in the running of a commercial company". The fact that MX are not "running" and are owned by the taxpayer makes no difference.

Charging orders mean that I have no right to the future value in my remaining few properties and may even mean they can be sold without my permission from what I can tell. So the only reassuring thing I have read in any forum is that my state pension cannot be touched. I just have to wait a couple of years until it kicks in and then that will be my income for the rest of my days.

by

21:26 PM, 25th June 2013, About 9 years ago

Anyone with properties which have equity and are not on MX mortgages should apply voluntary interests or charges for all the existing equity and future guesstimated equity in favour of trusted parties.
Then MX can't ouch you if you have other MX mortgaged properties with possibly negative equity!
Yes they can apply charges but won't be able to exercise them if there is no value in the property for them to obtain!
Believe me lenders of any description; credit cards etc are very quick to apply 2nd charges on any property.
Make sure you beat them by imposing voluntary charges in favour of trusted parties!
Costs about £50 per property and takes about 2 months to fully sort.
If you have parents always stick voluntary charges in their favour for any amounts you want; stops lenders getting their grubby little mitts on any equity you have or may have.
It has worked very well for me!!

by Brian Smart

17:03 PM, 26th June 2013, About 9 years ago

Does a voluntary charge placed after MX put their charging order on my BM properties have any effect? Is there a pecking order? i.e. I have a property worth £140k with a £100k mortgage and a charging order for MX value £254k. I put a voluntary charge to my brother on the house. (I owe my brother about £30k historically but haven't put this on record). What happens if I then sell at the market price for £140k? Can anyone stop me selling (i.e. MX)?

I will have a look at Land Registry site to see what they say but personal experiences are always better.

Thanks.

by

18:01 PM, 26th June 2013, About 9 years ago

YES there IS a pecking order..
ANY voluntary charges or interests MUST be applied before even a lender puts down a protection for a charge BEFORE the charge as even been applied.
If you have left it too late then you are too late; they have beaten you.
If MX have a 1st mortgage on your property then all their 1st charge has to be satisfied FIRST.
This will also apply to other MX properties you may have as MX can take equity from other properties you have MX mortgages on.
So get those charges in on your non-MX properties ASAP.
On the MX properties you have lost everything unless out of sales you can repay.
Very few MX holders have positive equity.ANY non-MX properties you ned to protect ASAP; forget the MX ones you've lost the lot.

by

15:31 PM, 27th June 2013, About 9 years ago

I am not in the unhappy position you find yourself but would like to take your advise on putting a second charge on my properties some are with MX but the majority are not I am glad to say. Can you give some advice as to how you bring a second charge in favour of a family member or indeed through my limited company if this is possible.

by

5:11 AM, 28th June 2013, About 9 years ago

Best thing to do is contact LR at Peterborough.
They were very helpful to me and actually guided me on how to complete the forms as I was in a rush; I was panicking that 2nd charges would be applied before I got mine registered!
In particular one of their operatives coached me through the process.
If you're desperate I could look out the contact name who dealt with my applications.
I think he might have even been a supervisor!
Was impressed with their helpfulness.

by Brian Smart

7:57 AM, 28th June 2013, About 9 years ago

Thanks for confirming I am beaten. It is better to know where I stand and act accordingly. I need to go off and research how charging orders can be used now as one of the properties MX have put an order on is with TMW and has a small amount of equity. It has been the focus of my attention for the last 4 years as I slowly renovated this with every spare penny I could raise. I would be heart broken if I could lose this now.

Back to MX, I have one mortgage left running with them and they have been adding all the legal charges from the repossessed properties to this account bumping up the balance. As I pay this account every month without fail I am annoyed that they put "Arrears legal charges" on it on a regular basis. I have complained to the Ombudsman but now I have seen these postings about their right to consolidate I guess they can legally do this too?

Why didn't they just sell the live and kicking mortgage accounts to another bank? Isn't asset stripping the name of the game in administration? Sell the good accounts to someone else and write off the rest, selling them to a DCA for a few pence in the pound. Why prolong the misery? It's been 5 years of this now. If my remaining MX mortgage was sold on to XYZ Bank I would have a chance to keep some retirement income. What good is it to the taxpayer owners of MX if I end up having to draw benefits and cannot generate income and therefore pay tax?

by Mark Alexander

10:11 AM, 28th June 2013, About 9 years ago

@Brian Smart - what was the catalyst which lead to all of these repossessions? Was it mortgage arrears or something else?

by

4:51 AM, 1st July 2013, About 9 years ago

Brian you need to sell these properties as all you are doing is working for MX.
You will NEVER be able to repay all that you owe.
Ideally see if you can persuade family members or close associates to buy your properties you would wish to to retain them.
Once they have purchased you may request them to apply voluntary charges in your name on those properties for ANY amount you choose.
Nobody can find out as such charges or interests are not notified to the previous creditor once the property is sold to another 3rd party.
You would need to ensure no assets appeared in your name to prevent 3rd party charging orders etc.
Easy to do as I have been doing it for years myself.
The BIG problem you will have is for any associates to afford to purchase your properties.
You'd be better chucking it all in and go bankrupt.
You'd be free and clear in about a year.
I very much doubt whether if you sold all your properties you would have any equity remaining; so why bother carrying on.
Don't spend anymore money on the properties; just get rid of them.
If MX refuse a short sale; just advise them you will file for personal bankruptcy; they can't stop you.
I know of someone who did this and is free and clear after 6 months and enjoying life and he has assets; system is easy to beat.
I can't see the point in flogging a dead horse.
Just accept MX were too fast for you and get rid of them.
Shame you didn't see my posts a few years ago about 2nd charges as you would have beaten MX!
But you are where you are.
What is the point in prolonging the agony!?
MX are NOT interested in full recovery.
they will repossess given any opportunity.
the way to stave them off is to pay the mortgages on time.
They leave you alone then.


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