Uproar as Mortgage Express spokesman reveals their Exit Strategies

Uproar as Mortgage Express spokesman reveals their Exit Strategies

7:20 AM, 19th May 2011, About 11 years ago 25

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Mortgage Express logoA spokesman for Mortgage Express revealed their exit strategies at the Northern Property Tribes last night which was met with uproar both on and off-line.

Apparently, if you sell a property that’s mortgaged to them, Mortgage Express have the right to call in all of your other loans.  The details of how they can insist on this are apparently in the small print of their buy to let lending terms and conditions.   It was also intimated by the Mortgage Express spokesman that the bank is retaining the entire proceeds of sale where a property is sold.  Questions have been raised by landlords over the legality of this practice and terms and conditions are being poured over by landlords and their legal advisers all over the country.

Several landlords have already confirmed that they have put off plans for selling one or more of their portfolio as a result of this revelation so it seems that Mortgage Express plans may well backfire on them.

The spokesman for Mortgage Express did go on to say that they have the ability to be reasonable and flexible but by then the angry mob to which he was presenting were in no mood for further debate.

The point regarding CGT on sales was made and was apparently met with a very woolly response.  If a property had increased in value but MX were planning to retain all sale proceeds to reduce other loans how would the landlord raise the funds to pay the CGT bill.  The MX spokeperson suggested that MX might release the funds to facilitate the tax payment which would be at some point in the future but the property investors in the room were having none of it.  Several had already had their fingers burned on the Mortgae Express Choices plan which encourages over-payments with flexibility to access the funds over-paid at a later stage.  The concept is to reduce interest payments which outweigh the interest which would be received if the money was deposited elsewhere.  Property118.com reported on this scheme and the complaints received from landlords back on 27th October 2010.  Read the article here.

What do you think of the exit strategies of Mortgage Express?  Are they following the FSA guidelines of “Treating Customers Fairly” in your opinion?



Comments

by

5:47 AM, 14th January 2013, About 9 years ago

Make sure you have a voluntary 2nd charge registered in say a parent's name or very trusted party for all the existing equity in your PPR plus about the equity you think the property will appreciate by until you are say 75.
MX will sell your portfolio at a shortfall and put 2nd charges on your PPR or force the sale of the property, leaving you homeless.
There are thousands of LL with MX in a similar position as yourself and I face being homeless in about 5 years due to a mortgage having to be redeemed or the property sold.
I have large negative equity and I am busy trying to get as much negative equity as I can.
This situation is going to cause chaos for tenants.
But MX doesn't seem to mind taking the negative equity hit as it is all govt money.
Govt won't concern themselves with negative equity as they will just move a few digits on the balance sheet and they will have recovered a vast amount of mortgage money!
They will not be concerned about lots of negative equity property.
The cash rich LL; which tend to be the larger ones will pile in snapping these ex-MX properties,
LL will lose millions of pounds in capital they used to purchase property with MX.
These LL will have their livelihoods destroyed by MX.
Time to start hiding assets out of any accounts in your name before the receivers; bankruptcy or otherwise come calling.

by

9:08 AM, 14th January 2013, About 9 years ago

is this a new MX policy? I have two B2L with them, A1 payment record and they have never called me, ever. I do get regular letters suggesting i over pay.

I am a little confused with yours and JMOO post, are they targeting bigger borrowers to get their loan book down, or are the account reviews due to payment record?

by Mark Alexander

10:23 AM, 14th January 2013, About 9 years ago

I suggest you politely cancel the appointment and advise them that you already employ an independent financial adviser. MX have only one motive which is to encourage you to reduce your exposure to them. Providing you are operating your portfolio in accordance with their terms you have absolutely nothing to worry about. You are certainly not obliged to meet them. If they believe you are in breach if their mortgage terms they may well put pressure on you but there is nothing they can do without a court order. The more information you give to them, the more likely they are to increase pressure in you to reduce your loans with them. Give them an inch and they will try for a mile.

by

14:05 PM, 14th January 2013, About 9 years ago

You should be OK providing you keep your payments up and do not sell ONE of your MX mortgaged properties.

It is only so much conjecture but based on info that has been posted on this site it seems there is a MX policy to reduce their loan book by fair means or foul.

NEVER overpay your mortgages unless you are content with increasing the equity value of your property which gives MX the chance to sell at a loss if they so desire if there is any issues with your mortgages.

Rather than overpay keep the overpayment money in a separate high interest account or pay down any other expensive debt you may have.

If ever needed you will have access to those funds to either make a lump sum payment to reduce the mortgage debt or you may spend it on whatever.
Putting it into the mortgage means you will NEVER be able to pull it out again; though with overpayments built up to about £10000, apparently they can be used for mortgage payments the following year.
Just in case though I would NOT do this as they might just reduce the loan by the the amount of overpayments and you will NEVER recover this money for any purposes.
Remain in control of YOUR money rather than handing over control to MX!

by Mark Alexander

14:15 PM, 14th January 2013, About 9 years ago

This is standard policy, they contact all borrowers. I think they have given up on me though as I give them a hard time when they call. I have never missed a payment but I am a large borrower. Obviously it makes sense for them to target large borrowers.

by Ianc66 Ianc66

10:49 AM, 15th January 2013, About 9 years ago

Some advice would be welcome.

I live abroad (Thailand, the Sun is shining an temperature 30C , thanks for asking.) in a property I own. I don't work, have little capital, my only income is rental income and modest private pensions. I will receive a UK NI pension which will be frozen at the rate at which I take it if I remain in Thailand, so Intend not take it until I'm 66. Though the new consolidation proposals may change my thinking on this.

I have two buy to let properties both bought in late 2002 in both my equity is high about 40%. They are managed by a good agent. over ten years I've had a total of 42 days of voids. They provide £1,300 month after costs.

One mortgage is with MX at base +1.75%.

The other with another lender at base+2%

My payment record is spotless but I due dread the inevitable but likely long delayed rise in mortgage rates.

Since October I've been overpaying MX at the maximum monthly rate available in Choices of £1000 (1% of loan).

I'm now 60 and so both mortgages are due for repayment in 14.5 years time as they expire on my 75th birthday.

I have an endowment ending in March which is likely to provide £73,000.

My intention had been to earmark about £10-13,000 to continue building my Choices balance up at £1,000 month to £16-20,000 so as to provide some easy to get at capital. then continue paying off at some lower rate of say £1-300 month. This money would be rainy day money for say repairs or voids. But I'm worried by reports of them not honouring the terms and returning money when asked - which would be absurd at my LTV.

Some £2-3000 as savings necessarily at almost zero interest.

And the balance of £58,000 to pay of what is 50% of the, other higher cost, mortgage, there is no Choices scheme once it has been paid it is gone. I would also do some continuing over-payment again at £100-300 month,

It seems an absurd to be spending so much capital to save what will be about £125 month in mortgage, but this worked very well through my working life and I do not feel able or willing to try to build a portfolio.

At 75 if the lenders insist on repayment I will sell one of the properties and pay off the remaining mortgage, if the lenders insist. Does anybody have any experience of mortgages being allowed to continue beyond 75?

Does the strategy above seem sensible? Mark I know you say never pay down debt but currently find your reasoning not wholly convincing.

by

11:17 AM, 15th January 2013, About 9 years ago

Nobody is saying don't pay down debt, they are saying pay it down but have access to it, to pull it out again if needed.
You will NOT be able to recover funds of overpayment from MX; don't believe me?,, well try it then!
Their Choices plan is a con to get naive people like you to reduce their debt with MX.
What you should do is put your overpayments into a high interest account like an ISA.
That way you will be obtaining roughly the same credit interest as mortgage debit interest.
You must remain in control of your liquidity not the bank.
Do not allow the bank to control your overpayments
Do not trust them.

by Mark Alexander

12:20 PM, 15th January 2013, About 9 years ago

Ian, if you don't cant make a better return on your money than the interest you are paying to MX then and only then might it make sense to overpay but do not rely on them allowing you to draw down again. An easy way to test this is to request a maximum drawdown now and see what the response is. You can always cancel the request if you want to. Also, there are several lenders providing buy to let mortgages beyond age 75 - see http://www.property118.com/index.php/ageism-in-buytolet-mortgages/30658/

by

16:49 PM, 15th January 2013, About 9 years ago

Mark - Would you know if the consolidation of Debt by MX also counts for residential properties or residential mortgage ?

by

16:55 PM, 15th January 2013, About 9 years ago

Does anyone know if this also includes a MX residential mortgage? For example I have 2 BTL loans and 1 Residential with MX. Can they consolidate all of these loans or just the BTL's?


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