Tag Archives: MX

Negative equity – forced to repay mortgage Latest Articles, UK Property Forum for Buy to Let Landlords

I have a buy to let mortgage with Mortgage Express. This mortgage finishes in April 2015. The value at present of the property is around £50000. I paid £126,000 for it 6 years ago with a mortgage of £113,500. There is now negative equity in the property in the region of £76,000.

I have paid the interest on the mortgage consistently and the property has been let at a fair rent allowing the mortgage payments to be met.

I have asked Mortgage Express for an extension of the term to allow equity to build in the apartment so as to give me a chance to sell it and redeem the mortgage. Negative equity - forced to repay mortgage

I have asked Mortgage Express to allow me to overpay and they have agreed, however I don’t want to overpay to find that I am made bankrupt due to their unwillingness to extend the mortgage in April 2015. There will be a shortfall of £45000 even if I over pay £1000 a month.

I earn a good wage and can afford to overpay by over a £1000 per month.

I have also written to the Prime Minister who has given the treasury my letter who in turn have responded. They say tackle the case with the Financial Ombudsman. My past dealings with them seem to be that they are weak to say the least.

It seems unfair that due to no fault of my own, indeed the financial crisis of the country being the cause and the disastrous dealings of the banks being responsible, I have to be responsible and accountable instead of the perpetrators.

Any suggestions?

Regards

David


Mortgage Mugging Latest Articles, UK Property Forum for Buy to Let Landlords

First they came for the Bank of Ireland ‘buy to let’ landlords,

I didn’t speak out because I wasn’t a Bank of Ireland customer.

Then they came for the West Bromwich Building Society landlords,

and I didn’t speak out because I didn’t have my tracker mortgage with them.

Then they came for all the ‘buy to let’ landlords,

and I didn’t speak out because I wasn’t a landlord.

Then as an owner-occupier with a tracker mortgage they came for me,

and there was no one left to speak for me. Mortgage Mugging

Also See

1) ACT NOW to protect the margin on your YOUR tracker mortgage

2) West Brom Building Society to increase BTL tracker margins

3) Complaint letter template to mortgage lenders and the Financial Ombudsman Service

4) Will Mortgage Express copy BoI and West Brom and raise their rates?

5) Mortgage Express Conspiracy Theory

6) Bank of Ireland increase differential on my tracker rates


Mortgage Express Conspiracy Theory Latest Articles, UK Property Forum for Buy to Let Landlords

I would appreciate your thoughts on the following Mortgage Express conspiracy theory.

As we know, Mortgage Express is run by UK Asset Resolution who are tasked with recovering as much money as possible for the tax payer.

If UKAR were to increase tracker margins for Mortgage Express customers, to a point where most landlords were to default on their mortgages, UKAR would be in a position to appoint LPA receivers. This would not affect the number of properties in the PRS but it would mean that a centralised body, controlled by the Government, would control a huge section of the PRS. In turn, that would create jobs in the public sector, it would mean that Jo Public wouldn’t have to deal with rogue landlords and letting agents to anywhere near the same extent and it would also provide a better opportunity for recovery of tax payers funds.

Apart from landlords, can you imagine tax payers not supporting such a scenario?

As I see it, the clock is ticking and landlords only have so much time to diffuse this bomb. The success of a Class Action against West Bromwich Building Society or Bank of Ireland could prevent the above. If a test case isn’t won before the above scenario comes to pass then I’m afraid the PRS as we know it may be doomed.

Mortgage Express Conspiracy Theory

Thoughts?

EDITORS NOTE

Property118 is leading a Class Action group to fight back by taking a test case to Court if necessary to prove once and for all that amending the margin on a tracker rate mortgage is breach of contract. If you are worrying whether your mortgage lender will follow the lead of Bank of Ireland or West Brom please READ THIS and complete the form below to support this campaign.

The deadline for submission of instructions has now expired. However, it may still be possible to join the representative action subject to paying Court fees and an additional cost to cover associated administration. For details please email : carla@cotswoldbarristers.co.uk


Will Mortgage Express copy BoI and West Brom and raise their rates? Latest Articles, UK Property Forum for Buy to Let Landlords

Is there a trend? First the Bank of Ireland raised their Tracker rates and now West Bromwich Building Society have followed suit, will Mortgage Express copy and raise their rates?

We borrowed a tidy sum from Mortgage Express and have been enjoying the “Product Variable Rate” of 1.75% above the Bank of England Base Rate. The rate seemed secure but West Bromwich Building Society’s recent move to increase their tracker rates worries me.

If West Bromwich BS get away with this, then will Mortgage Express have a punt as well? Their reputation these days is of doing all they possibly can, fair or foul, to get borrowers to re-mortgage to other banks.

I’ve looked back at my mortgage offers from Mortgage Express and it looks hopeful for us. The mortgages started as either discount or fixed rates and then reverted to the “Product Variable Rate”. The first one we took out in 2001 and then we renewed the deal with various extra drawdown loans and new discount rates etc. On first impression, the renewals all seem to refer back the original contract rather than start new ones. The key phrase in the original 2001 agreement was straight: “the interest rate will be 1.75% above base rate”. I trust it still stands.

Another Mortgage Express mortgage offer (2004) states “a variable rate of 6.5% (which is 1.75% above the Bank of England Base rate – currently 4.75%)” and later it states that the rate “will revert to the variable rate …. for the remainder of the term”. The separate “Conditions 2004” booklet did contain a section on Mortgage Express’s rights to change the interest rate but it started “If the interest rate is one which we can vary at our discretion …”. So again this looks good.

However, I hear from Property118 that West Bromwich have no clauses in their offer letters referring to their rights to increase their tracker margin. Also they didn’t refer to their special conditions booklet (which presumably did have some text providing for when and how the tracker margin might be changed). Finally, they ignored the October 2004 mortgage regulations cut off date.

Property118 also reports that Bank of Ireland did keep to those 3 rules and they seem to be getting away with it. So, now West Bromwich have gone further than Bank of Ireland and we all wait to see if they’ll get away with it.

Mortgage Express would need to push the boundaries further still, I guess. I suppose they are first waiting on the outcome of the West Bromwich’s move. Will Mortgage Express copy BoI and West Brom and raise their rates

Are you worried as well?

EDITORS NOTE

Property118 is leading a Class Action group to fight back by taking a test case to Court if necessary to prove once and for all that amending the margin on a tracker rate mortgage is breach of contract. If you are worrying whether your mortgage lender will follow the lead of Bank of Ireland or West Brom please READ THIS and complete the form below to support this campaign.

The deadline for submission of instructions has now expired. However, it may still be possible to join the representative action subject to paying Court fees and an additional cost to cover associated administration. For details please email : carla@cotswoldbarristers.co.uk


Mortgage Express or Mortgage Distress? Advice, Buy to Let News, Cautionary Tales, Financial Advice, Landlords Stories, Latest Articles, Mortgage News, Property Investment News, Property Investment Strategies, UK Property Forum for Buy to Let Landlords

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. Mortgage Express or Mortgage Distress

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.

Mortgage Express Reviews

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:-

  • living in a property financed as a BTL
  • Letting a property which was financed as a private residence
  • letting to tenants which are now claiming benefits
  • where a property is an HMO

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?

My Preferred Mortgage Express Exit Strategy

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.

Why don’t Mortgage Express just exit now?

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?

Don’t be bullied by Mortgage Express

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.

Mortgage Express problems - You are NOT alone

 


Second charge BuytoLet loans via Shawbrook Buy to Let News, Commercial Finance, Landlord News, Latest Articles, Property News

shawbrookI received an email today from Shawbrook outlining their Secured BuytoLet Loans which on first glance I nearly ignored as I normally do for other second charge lenders.

On second thought though it struck me that I get a lot of questions from readers who would like to raise equity, but either do not want to remortgage as they are locked into extremely attractive tracker rates from the pre-credit crunch days, or their existing lender no longer offers further advances.

Therefore despite the high interest rate at 9.95%, which I would normally tell people to avoid, it could be possible that by not moving the whole mortgage a small amount extra on a higher rate might actually be more cost effective.

Shawbrook while only dealing direct with brokers are becoming a popular lender of choice for more difficult BuytoLet and commercial deals.

I asked Howard Reuben of HDconsultants if a lender like Mortgage Express, who are desperate to find any excuse to enforce redemption of a  BuytoLet mortgage, if it was possible they would then see the borrower as in default of their terms and conditions. The response upon investigation was not clear cut:

“We have not heard of any such foreclosures on the basis that a 2nd charge was implemented, but could not state categorically that a lender would not consider this action in the future though as it is assumed that it all depends on the lenders attitude towards their borrowers at that time. However the product, which has actually been available for quite a while now, is a successful product. Borrowers should of course be advised of all potential pros and cons – which is down to the Adviser.”

Shawbrook BuytoLet Secured Loan cost and criteria:

  • Interest Rate 9.95%
  • Lender fee £1,250
  • Maximum LTV 65% including existing mortgage
  • Maximum number of properties in a borrowers portfolio of 3
  • Early repayment charges 3% first 5 years and 1% thereafter
  • Stress tested so rent has to cover 110% of existing mortgage and new loan
  • Min Loan size £5,000 Max Loan size £75,000
  • For residential investment properties only – no DSS or HMOs
  • Max age 80 years old
  • Max term 25 years

To summarise the costs are high, the criteria strict, the LTV low and certainly should only be considered in the right circumstances. Although as you can tell I am certainly not going to sell anyone on the idea I thought it was interesting to discuss this type of product considering my first reaction was just to delete it out of my inbox.

Please let me know what you think if you have an opinion by leaving a comment below.

To search for a Buy to Let mortgage and Calculate how much you can borrow please Click Here

If you would like any advice from our recommended mortgage broker please do not hesitate to contact me on 01603 489118 or info@property118.com

 


Mortgage Express are forcing me to sell my home – HELP! Landlord News, Latest Articles, Property News, UK Property Forum for Buy to Let Landlords

Mortgage Express are forcing me to sell my homeI own a property in the UK that I rent out since being made redundant, getting offered work in Spain and moving approx 4 years ago. My UK property is my only home and I intend on returning to live in it when the UK comes out of recession and I can get a decent job again. I have a standard variable residential mortgage with Mortgage Express.

I did not tell Mortgage express initially that I was renting my house out as it is my only home, I plan to return there and I do not know how long my work will last in Spain. Continue reading Mortgage Express are forcing me to sell my home – HELP!


Mortgage Express Right to Consolidate Advice, Buy to Let News, Cautionary Tales, Financial Advice, Landlord News, Landlords Stories, Latest Articles, Mortgage News, Property News

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. Continue reading Mortgage Express Right to Consolidate


Agreement to Letting Fee now being charged by Mortgage Express Buy to Let News, Landlord News, Landlords Stories, Latest Articles, Mortgage News, Property News, UK Property Forum for Buy to Let Landlords

Agreement to Letting fee now being charged by Mortgage ExpressIs Rob’s mortgage lender pulling a fast one by charging him an “Agreement to Letting Fee” or has he been lucky so far and actually got a relatively fair deal? Rob’s email as follows:-

“I own with a flat with a £225k residential mortgage on it from Mortgage Express. Six years ago I purchased a new home and got permission to let from Mortgage Express to let the property.

Every year for the last 6 years Mortgage Express have sent me a bit of paper to sign to renew the permission to let, no charge, no problem, easy. Continue reading Agreement to Letting Fee now being charged by Mortgage Express


Mortgage Express want an account review – Readers Question Landlord News, Latest Articles, Property News

Readers QuestionsHelp! I have a Mortgage Express representative coming over for an account review!

Why are they are demanding a huge array of info from my entire portfolio, the 15 mortgages I have with them and the 19 mortgages I have with other lenders? They want evidence of everything I do make spend etc which has me worried about my own home.

Does anyone know what their intent is and what they can take hold of should they insist I repay their mortgages most of which are in negative equity due to recessionary factors not my immaculate lending and payment habits? Continue reading Mortgage Express want an account review – Readers Question


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