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.

Oops! We could not locate your form.


by Mark Alexander

22:54 PM, 4th July 2013, About 9 years ago

Hi James

I fear that you have fallen for propaganda.

Please take a look at these linked threads:-

1) Making Overpayments on Your Mortgage >>>

2) Mortgage Express client labels their Choices Overpayment Scheme “sharp practice”. >>>

3) Uproar as Mortgage Express spokesman reveals their Exit Strategies >>>

4) What you shouldn’t do – buy to let mortgage advice >>>

by James Leavesden

23:21 PM, 4th July 2013, About 9 years ago

Thanks Mark,
These are my only debts, no personal loans or credit cards and mortgage interest rates are still higher than savings in cash ISA's. I am a little risk averse at the moment so not looking to invest. Further more I can borrow back my overpayments so I havent waved goodbuy to them.

I did read this
which is why I wondered if I could get around this by paying off my mortgage first. Then I could do what I want with the proceeds of any subsequent sale as MX would no longer have an interest in the property at the time of sale. If I didnt need to sell, then I wouldnt pay off the mortgage completely just keeping it ticking along for the rest of the term and borrow back any money I may need.


by Mark Alexander

8:38 AM, 5th July 2013, About 9 years ago

I understand that James but I really think you ought to read the other threads I linked you to as well. Several landlords have posted comments complaining that MX have used every possible excuse not to allow them to withdraw their over-payments under the MX Choices plan.

I only have the word of these landlords of course as over-paying is something I would never do personally. As you say, it's cheap money at base + 1.75% making a pay rate of 2.25%. It's possible to get a better rate on your money in a deposit account. What's more, so long as you don't spend the money on anything other than your property business or withdrawing capital which you invested to make the purchases initially you can still offset the extra mortgage interest against your rental income. The purpose of the loan being for further investment which you have not made yet. You could actually make a return on borrowed money on the differentials between interest rates. It's totally safe if you spread it around in various High Yielding deposit accounts which are insured by the government. You could always pay the mortgages back by withdrawing it from your deposit accounts at a later date.

You need to consider that the primary goal for MX is to reduce their mortgage book. Their tactics have often been described as "dirty tricks" which is why I wanted you to read about other peoples experiences in the comments section of those other threads which I provided links to.

I have no idea whether MX would call in all your loans if you were to pay one of them off but from what I have read in other peoples comments I wouldn't dismiss the idea that they might.

Obviously it's your money, your future, your choices but if I were you I would test them at the very least by applying to draw back all the over-payments. Hopefully you will not have a nasty shock but I think you might. If you do that will you come back here and share your experiences with us please, positive or negative? If they do allow you to withdraw your over-payments, do consider what I have said above. As their target deadlines for recoveries get ever closer the MX tactics seem to be getting more aggressive. I would not trust a state owned mortgage company whose primary mission is to liquidate their loan book if I were you. As I've said above though, the choice is yours.

by James Leavesden

23:27 PM, 5th July 2013, About 9 years ago

Reply to the comment left by "Mark" at "05/07/2013 - 08:38":

Thanks Mark for all the tips. Well they certainly have allowed me to borrow back some 30K I had over paid on one property in April (which is my entire amount of overpayments on that property). But as I purchased this one in 2001, their valutation (had one of those phone chats with a portfolio manager before about my plans and how this were going) is above the purchase price so I an only on around 70%LTV.
I will keep you posted either way with happens when the time comes.
Thanks again for the insight.

by Mark Alexander

0:50 AM, 20th March 2014, About 8 years ago


Please see my linked article below and help to spread the word in any way you can.

by AllinLeedsRooms

13:55 PM, 8th July 2014, About 8 years ago

Ive just recieved a load of documents through from Mortgage Express forcing me to consolidate a number of properties on to new terms and conditions. It would appear a breach of terms and conditions has occurred be cause a freeholder on 3 flats slapped a forfeiture notice on them. Mortgage Express paid up without even questioning the procedure. This money was due to the RTM company i formed and now i can't get it back leaving the the RTM company in jeopardy of breaching the lease.
What is is everyones thoughts on why MX behaves like this?

by Mark Alexander

14:25 PM, 8th July 2014, About 8 years ago

Reply to the comment left by "AllinLeedsRooms " at "08/07/2014 - 13:55":

You need to challenge their right to pay a bill without even contacting you. If no such right existed (and I doubt it does) then they cannot say you were in default.

The problem is that you may well need to throw a few thousand pounds at getting some good legal representation to deal with this matter. It may well be the case that MX don't think many borrowers have the funds or the desire to do this. On this basis they can simply play the numbers game and back down if/when somebody does fight back.

I recommend you to make contact with Mark Smith (Barrister-At-Law) - see >>>

by Mark Alexander

14:27 PM, 8th July 2014, About 8 years ago

Reply to the comment left by "AllinLeedsRooms " at "08/07/2014 - 13:55":

PS - I recommend you DO NOT sign the new terms without taking independent legal advice.

by Mark Smith (Barrister-At-Law)

15:44 PM, 8th July 2014, About 8 years ago

Reply to the comment left by "AllinLeedsRooms " at "08/07/2014 - 13:55":

Like all of these things the devil is in the detail of the contract. I would be surprised if they were entitled to consolidate for an event that was not your fault, but if you send me the t&c and the correspondence I will review it and give you some advice about what can be done.

by AllinLeedsRooms

18:03 PM, 18th July 2014, About 8 years ago

Hi - Just to give you an update. I met with my portfolio manager and i was given terms to sign within 14 days or they would be taking legal action. Im assuming this is LPA receivers etc.
The terms are as follows
1. All mortgage terms reduced to 8 years from there current 12/13 year span
2. An Overpayment of £500 per month rising to £1000 per month from month 5
3. Repayment of £24,000 service charge on 3 flats -- yes you read it right - £24,000 or £8,000 each which the freeholder has frittered away after MX paid him out.
4. Pay £400 for the pleasure of shafting me

Ive noticed their valuations are way off the mark as well which probably helps them in their pursuit of another clause

No portfolio shall exceed 105% LTV

I have no idea what to do. Im off on holiday on Monday and this will take me past the time they want the docs back. Im worried if i don't sign them i will come back to find half my portfolio with receivers!


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