7:20 AM, 19th May 2011, About 11 years ago 25
A 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?
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.