0:28 AM, 20th March 2014, About 9 years ago 13
It has come to our attention that Mortgage Express (now UKAR – UK Asset Resolution) have recently been appointing LPA receivers with no apparent justification.
Previously we had heard of LPA receivers having been appointed where a borrower has died or where a landlord had fallen into arrears. In some cases the properties were sold for much less than the outstanding mortgages leaving the estates of the deceased or the affected borrowers facing bankruptcy. In some cases the arrears had been paid off but this had not proven to be an effective remedy. This is all very sad for those affected but in the cases we looked into it would appear that Mortgage Express were well within their legal rights to take such action, regardless of how distressing it was to those affected or how unreasonable their actions were when compared to the attitudes of other mortgage lenders.
HOWEVER, it now appears that matters are moving to another level entirely.
Just this week we have heard from landlords with very large portfolios, who have never been in breach of any of their mortgage conditions, but have now had their loans called in and subsequently been informed that Mortgage Express have appointed LPA receivers.
Our initial investigations reveal that these borrowers purchased properties for cash or with the benefit of bridging loans and very quickly re-mortgaged them to Mortgage Express, sometimes on the day of purchase. This business model was particularly common during the period of 2003 to when Mortgage Express eventually closed its doors just after the collapse of the Northern Rock. Both former lenders mortgage books are now managed by UKAR (UK Asset Resolution) who have made no secret of the their agenda to call in as many mortgages as possible.
On many occasions UKAR have been accused of acting immorally and there have been many stories of affected borrowers shared here at Property118.com
The process on instant remortgaging was at the forefront of the Mortgage Express business model for nearly five years. They promoted the concept to their own borrowers in their own magazine which explained how borrowers could buy for cash at auction and then refinance all or perhaps more their their initial investment back out of a deal very quickly. Mortgage Express even employed a large sales team to explain their business model to mortgage brokers and even placed their mortgage underwriters into the offices of larger mortgage broker firms to speed up the process.
Just recently though, Mortgage Express, or should I say UKAR, have been demanding repayment of loans and subsequently appointing LPA receivers without full justification and then inviting borrowers to prove they are not in breach of contract. When challenged UKAR have implied that full facts surrounding remortgages were never disclosed to them. The reality is that questions were never asked about original purchase price or date of first ownership until completion, and even then the responsibility to disclose this information fell upon the solicitors acting in the arrangement of the mortgage. There is plenty of concrete evidence of Mortgage Express proceeding to allow the completion of mortgages despite full disclosure from solicitors that the property had been purchased for a lower amount that it was being refinanced for within a short period of time. For Mortgage Express to persuade a judge to lift an injuction they would then need to prove that the solicitor acting for you was negligent. If Mortgage Express were able to achieve this you would be in a very strong position to obtain legal representation on a no-win-no-fee basis against your solicitor to recover damages.
Seemingly Mortgage Express are now calling in loans where a solicitor may have been negligent and/or even where Mortgage Express themselves had allowed the completion of mortgages in full knowledge of the details of the transaction – that is simply bang out of order!
The problem is that solicitors who completed the mortgages are also being targeted for negligence so they are conflicted and cant advise their former clients. This leads to a requirement to brief another set of lawyers, usually litigation experts, many of which know little if anything about how the transactions were structured. You can imagine what a meal the lawyers cam make out of that scenario and some affected borrowers just can’t afford to pay the fees which can very easily run into tens of thousands of pounds by the time a barristers opinion has been sought!
The best bet for these borrowers is to unite and to share the investigative costs. However, they don’t know each other!
And that’s where Property118.com comes in useful.
We have search engine optimised this article so that affected borrowers can easily find it.
Personally, I have significant experience of these transactions and may well be able to assist affected borrowers. I was previously a director a mortgage brokerage which of arranged thousands of loans with Mortgage Express. In 2011 I also acted as a professional witness at a Solicitors Disciplinary Tribunal where Mortgage Express was suing a solicitors practice on this very basis. My evidence related to Mortgage Express policy towards remortgaging properties which had been purchased for cash or with bridging finance and subsequently refinanced on a back to back basis. My evidence was crucial to the findings – full details HERE. I have subsequently provided evidence for other law firms on a similar basis but none of those cases have ever gone to trial.
I am NOT a solicitor, but I do act as a Consultant to both solicitors and Barristers-At-Law. My latest case has involved organising a representative action against the West Bromwich Mortgage Company to challenge their 1.9% per annum interest rate hike in the margins charged on their base rate tracker mortgages. In phase one of that project I raised over £100,000 against an initial target of £15,000 to seek professional advice. I am now well on the way to raising an additional £250,000 within 28 days to help a group of borrowers, of which I am one, to commence legal action via the courts to get this rate hike overturned. Further details HERE.
As soon as LPA Receivers are appointed your tenants will find out. The first reaction of tenants is often to panic, stop paying rent and/or to find somewhere else to live. Cashflow from your rental properties can deteriorate very quickly, thus causing your mortgage accounts to fall into arrears and your credit rating to be severely impaired, thus creating a knock on effect of preventing you from being accepted for finance elsewhere. Given that ALL rents are usually paid to the LPA Receivers your personal finances could suffer too. Recovery from such a predicament is unusual and often ends in personal bankruptcy when properties are sold in a distressed sale scenario, often at auction and often at a value which fails to repay the mortgage debt and the LPA receivers charged which are usually considerably higher than people can ever imagine.
If you are affected by this you may be able to issue an injunction to prevent Mortgage Express appointing LPA Receivers, or to get the LPA receivership appointment stopped or suspended. Mortgage Express would then have to prove to a judge they had grounds to appoint an LPA Receiver as opposed to you having to prove they have no grounds. Given the research work I have already done on other cases I can organise that action, via a Direct Access Barrister, for a flat fee of £2,500 plus VAT.
The first step though is an initial investigation into your circumstances. I will be pleased to review correspondence you have received from Mortgage Express for a fixed fee of £395 inclusive of VAT, and in complete confidence of course. To instruct me you will need to complete the short form at the foot of this article and make payment of my fee, either by credit/debit card or via PayPal. I will then send you an email which you can reply to with scanned images of the recent communications you have received from Mortgage Express. I will respond with a full and frank opinion within four working days of receipt of your papers and if I consider it to be appropriate I will refer you to a Barrister-At-Law to organise an injunction on the basis described above. My fee of £395 is inclusive of reading documents, replying to you in writing via email, up to 30 minutes of telephone conversations with you and or your existing professional advisers and referring my recommendations and your papers to Counsel for further consideration and action. A receipt will be provided on for payment and a VAT receipt will also be made available on request if you require one.
It is not recommended for any Mortgage Express borrower to agree to a meeting with UKAR without being represented by a qualified Solicitor or Barrister. If UKAR request a meeting you should ask them why they want a meeting and what the consequences of declining a meeting might be. Then ask them to confirm what they have said in writing. When you have that letter it is time to instruct me.
If you have already arranged a meeting with Mortgage Express please instruct me immediately so that I can advise you what to do next.
If you would like me to complete an initial review of your circumstances please complete the form below and make payment. I will then send you an email explaining what you need to do next.
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8:10 AM, 20th March 2014, About 9 years ago
This is worrying. I have a mortgage with NRAM formerly Northern Rock on a very good tracker rate. Should I be worried and should I start looking to remortgage? I only have 3 years left on the term so maybe now is the time, but I don't really want to lose this rate....
8:49 AM, 20th March 2014, About 9 years ago
Just for clarification, are you referring to Max's case on the other thread?
Or have you heard something new? If so, what is the source of that information and how recent was it?
Mark Alexander - Founder of Property118
9:09 AM, 20th March 2014, About 9 years ago
Reply to the comment left by "Vanessa Warwick" at "20/03/2014 - 08:49":
I have not been following the Readers Questions thread posted by Max but will now read up on it.
I am registered as an “expert” with the SRA in such matters, hence my various calls to provide professional witness evidence to their tribunals. I am engaged by various Chambers and Solicitors firms to provide expert opinion on matters concerning the underwriting and due diligence of mortgage lenders pre-offer and pre-completion. You may also be aware that I was previously engaged by several financial institutions to develop their buy to let commercial lending criteria.
Two weeks ago I was contacted by a law firm acting for a client with over 50 properties. The firm are seeking an injunction to suspend an LPA Receivership appointment by MX, as described in my article above, and to sue for damages. Since then I have contacted directly by several affected portfolio landlords with mortgage accounts administered by UKAR for the former Mortgage Express and Northern Rock. For obvious client confidentiality reasons I cannot post specific details in open forum.
Following the evidence I gave at the 2011 SDT hearing I have been approached and engaged by several law firms acting for clients (borrowers and solicitors practices). I have utilised these contacts to provide a cost effective service, based on economies of scale, for affected borrowers.
9:12 AM, 20th March 2014, About 9 years ago
Thanks for that Mark. I am surprised that there has not been more talk of this on the forums!
I have contacted MX and sent them a link to this thread.
I will let you know their response.
Mark Alexander - Founder of Property118
9:24 AM, 20th March 2014, About 9 years ago
Reply to the comment left by "Vanessa Warwick" at "20/03/2014 - 09:12":
It's not the type of thing people openly talk about Vanessa. Borrowers at this level and especially those directly affected tend go straight to solicitors as opposed to forums. It is their solicitors who are more likely to find this article than the affected borrowers, unless of course MX gear up the campaign and begin to target people with less mortgages. We have no idea what the limits are but yesterday I spoke to a lady who has one in LPA administration, on the basis described above, and are threatening to appoint LPA receivers for her remaining 10 mortgages if she does not agree to a review. Needless to say, I am expecting to receive her instructions today, either directly or via her solicitors.
9:36 AM, 20th March 2014, About 9 years ago
Well done Mark.
10:00 AM, 20th March 2014, About 9 years ago
This Is discusting behavior, I only have 3 mortgages with MX 2 buy to let and 1 residential with permission to let on it. The residential I have sold and should be completing tomorrow, I have had telephone confirmation that if I pay off the residential they will not exercise there right to consolidate on the other 2 because it dose not apply to residential, however I have not had this confirmed in writing even though I asked for it, so I guess ill find out tomorrow!
10:19 AM, 21st March 2014, About 9 years ago
Apologies in advance for the lengthy post…please read it all.
Well done with this. It is a fabulous starting point for anyone in distress. This has not been readily available before – but it is now.
Having given this matter some thought, I conclude that UKAR are just at the stage of desperation owing to a few factors regarding low interest rates and their inability to hit their targets set by OUR elected government on getting the money in at any cost.
I could imagine a conversation along the following lines of 2 UKAR policy makers on this theme. Let’s call them P1 and P2
P1 So we’ve managed to get as many customers of MX to remortgage to other lenders, and we’ve done as many repossessions we can of those in arrears – there’s not much to go for now.
P2 Yes I know, as long as interest rates are low then the vast majority of borrowers will easily pay their monthly mortgages and stay out of arrears. It’s so frustrating!
P1 Yes, when rates start to rise, with each rise we will have plenty customers falling into arrears then. That will make it simple for us to hit our targets wont it?
P2 Yes indeed – we’re going to be rushed off our feet by taking back those properties, quite legally, of those loans that have turned bad. But until then, how do we continue to keep the Treasury happy? We need to do something…anything!
P1 Correct. So we have to make things happen then don’t we? If the rotten fruit isn’t falling from the tree naturally, we better give the tree a shake so that we get some of the decent fruit to fall off. That way we can simply keep on reporting our successes tot he Treasury until rates rise and it will be easy then!
P2 What do you mean?
P1 Well we can select certain customers and steamroller them and take their portfolios. We just dream up ‘breaches’ that are totally insignificant but give us enough leverage to frighten them.
P2 Are you talking about residential customers here?
P1 No not at all! In fact – definitely not. The products they have are regulated by the FSA – we would never get away with it! Plus can you imagine the public emotional backlash? The treasury would be furious with us too because their dirty deeds would then be exposed for the world to see. Dont forget there’s an election soon!
P2 Ah, I get it – you mean BTL customers then?
P1 Of course I do. Their products aren’t FSA regulated and there would be nowhere near enough public support for them either.
P2 But wouldn’t that mean that decent tenants are effectively thrown out of their homes?
P1 I suppose so – but as long as we do this piecemeal and get it done quickly, I’m willing to gamble it won’t be a major issue. That is providing the media don’t run campaigns to highlight what dirty tricks we are up to.
P2 So I guess we will hit our biggest portfolio customers then for maximum effect? That will be a very efficient use of resources.
P1 Not necessarily. I think the bigger portfolio customers are pretty savvy and have deep pockets for legal battles. Remember, we are going to be targeting customer here who have NEVER been in arrears! Many of the so-called breaches we create are liable to be ridiculed by a judge if they apply for injunctions before we proceed.
P2 So what are you saying?
P1 I’m saying that we hit the more homespun type customer. The ones who aren’t as strong. The industry is very fragmented. We can take advantage of that. We can hit them so hard and fast that before they have had time to gather their thoughts, we will have the LPA receivers in and start the ride on the slippy slope for them.
P2 I can see the sense in that. They won’t even have time to think straight or make any plans for a legal defence will they?
P2 I suppose this is an option we are forced to take if we wish to meet our grubby little targets that the PEOPLES government have set us.
P1 It’s such pity that decent honest UK citizens, running their businesses and paying taxes AND who aren’t in payment arrears and therefore who have done nothing wrong, need to be picked on like this. But I suppose we can always say the devil made us do it. – Casualties of war etc?
P2 So that’s it then. Until rates start to rise – when we will have so much fruit falling off the tree that we won’t know what to do – we will have to resort to these dirty tricks.
P1 Yes but there’s just a couple of possible clouds on the horizon regarding this strategy.
P2 What’s that?
P1 Well, if these landlords who we choose to surprise, became organised and prepared legally beforehand for our dirty tricks then we are going to find it much harder to get away with all this. Also, if they get themselves organised from a PR and media communications angle then we can so easily be exposed by the media for what we really are.
P2 Do you mean as grubby little underground warriors doing our government filthy work for them?
P2 Fair point – but surely that will never happen. The little people won’t do that.
P1 Don’t be too sure about that P2
I’m totally convinced, based on the tales coming out, that this is a précis of what is happening.
WELL NOW WE ARE ORGANISED A LOT MORE – ALL IN 48 HOURS!
A combination of Mark’s diagnostic initial support combined with Mark Smith’s skills as a barrister we are now prepared.
Combine this with Vanessa’s sterling efforts with a more communicative approach to UKAR, we can say we are at least prepared to fight and expose these people. Like most people I have no issue with hem chasing customers in arrears (even though even in these circumstances they are eye wateringly ruthless), but to hound people who aren’t in arrears is despicable.
We now need to spread the word and link as many interested parties as possible to this thread and PT threads too,
We also need to let as many MX customers who don’t visit the forums about the support structure available.
Strength in numbers.
I’m thinking of examples such as
Other property forums
Letting agents – they can mail shot their clients
In fact anyone who has a voice – the louder the better.
Thanks again to all concerned who are making a difference
11:30 AM, 21st March 2014, About 9 years ago
I have just received an official communication from MX in response to this thread and I have posted it, and our response to this matter, on Property Tribes:
11:32 AM, 21st March 2014, About 9 years ago
Chris how refreshing to see MX 'backdoor' dealings being highlighted and brining it to members attention in your recent post. However I did post a question regarding similar matter late last year with little or no response. Thankfully it now seems to have been picked up and I totally agree where members have played by the rules and kept their accounts in an orderly manner they should not be subjected to what is such an unfair practice.
Like ATOS that has now been outed due to such bad press they are trying to curtail their contract with the government, maybe we can hope for a similar outcome.
I think previously the lack of response was perhaps due to a combination of ignorance (I'm alright Jack my house is in order) disbelief that a government body would do such a thing or simply didn't want to put their heads above the parapit.Whatever the reason member's need to wake up and smell the coffee and be on their guard.
Keep up the good work Chris and good luck with spreading the word.