This is an extract from a post made on a UK Property Forum i am actively involved with and relates to a lender Mortgage Express who were very heavily involved in residential lending to investors.
And we think our lenders are ruthless.
Can you imagine your Banker wanting to do a Annual field inspection of your properties and any that weren't up to scratch would give you 30 days to refinance elsewhere.
Hi Everyone
Just had a yearly review from MX wasn't pleasant this time.
i have 9 propertys with them and never missed a payment so no worries there.
The new guy was originally there collections guy so has experience at scaring people.
i have a property coming to the end of its term in 4 years so he was asking me what my plans were and that they need all propertys off there books.
he said if no finance in place then they could come to some arrangement but in favor of them and not me meaning put all my mtge payments up on all 9 propertys.
He also said in 4 years if i was to either remtge this property or sell it then they are well within there rights to consolidate the other mtges i have with them so no way out there,can they do this as i have seperate contracts with them.
He also asked if i rented to any friends or family lucky enough i dont because if i did then i would be in breach of my contracts and did i ever buy a house with tenant already in situ lucky enough the answer was no again as again in breach of contract,he mentioned they had a guy with 90 props and he bought a house off the owner the owner then became the tenant and he made 30k from the deal,he was in breach of contract and lost all of his propertys,he had never missed any payments.
They seem to be getting very nasty i told him that he was scaring me and his answer was well thats what i'm here for to scare you as we want you off our books.
there also doing drive bys and if they see any propertys which look neglected there reposessing them.
They seem pretty desperate but not giving people a chance to remortgage the odd property as you can end up having to consolidate and if thats not possible then having to come to arrangement of upping your mtge payments on each property.
he said they dont care about us and they can do what they want as anyone who trys to take them to court fails miserably.
He asked me a few questions and gonna send his report through to me whatever that means.
i told him they are worse than the government and that the only way i would move them would be if they reduced my mtge amount,he said he's never heard anything so ridiculous and that will never happen
He wasn't amused when i told him i lived off my property money,he said i shouldn't be relying on this and that i was spposed to have another job.
Can they do this to landlords as there looking for any excuse to repossess to get there money back.
_____________________________________________________
There were subsequently 167 replies and over 14,000 views of this thread.
I believed that the thread raised 9 questions that I felt MX / UKAR should be prepared to answer.
I approached their PR company, but unfortunately received very short shift from them!
I then wrote to MX CEO Richard Banks.
Three weeks later, I was contacted by Head of Marketing and PR, Tim Newman, who said that UKAR were very happy to engage with the landlord community through PT and that they would answer my questions.
Well finally ... here they are:
Note from Mortgage Express (UKAR)...
The answers below are indicative only and are designed to outline our overall approach to the areas in question. We recommend that portfolio landlords discuss their specific circumstances with their Relationship Manager rather than relying on these general comments. Certain decisions and actions are always considered on an individual basis for a specific landlord, based on a full understanding of their account.
- - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - -
1. Are all landlords being targeted for field visits, or particular landlords who have large MX-only portfolios?
Our specialist Relationship Managers and Commercial Consultants currently provide support to portfolio landlords holding 5 or more Buy to Let mortgages with Mortgage Express, Bradford & Bingley and NRAM (Northern Rock Asset Management).
Our Relationship Managers are field based (we have around 35 working across the UK) whereas our Commercial Consultants are based in our office near Bingley in West Yorkshire and in Doxford near Sunderland.
In practice, our Relationship Managers will make field visits to landlords who have larger portfolios, or in cases where there has been some activity on the account that indicates they could benefit from this direct support or that the property may be in a poor state of repair. When arranging visits, we correspond with landlords and seek to arrange an appointment which is convenient for them.
2. We need the definitive word on sales of MX properties being used to pay off other mortgages on MX properties.
Our mortgage conditions include a 'right to consolidate' clause which applies to our portfolio landlords.
Where a property is sold as a result of a repossession or via an LPA receiver, we will apply any sales surplus to other mortgage accounts that the landlord holds with us, if these are also in default (see question 4).
Where a borrower arranges a sale or otherwise seeks a redemption of one mortgage within a portfolio, we also have a right to refuse to allow the redemption and to insist that the borrower redeems the whole portfolio. In these circumstances, rather than insisting on other redemptions, we would usually assess the equity position across the remaining portfolio and negotiate with the borrower for some or all of the surplus from a proposed sale to be used to pay down the balance on the remaining portfolio. If the remaining portfolio was already at a low LTV, we would ordinarily allow the sale to proceed without requiring any of the surplus to be applied to other properties.
It can often be best practice for the landlord to reduce their remaining debt in this way, as this can help increase the long-term sustainability of their portfolio.
In addition to the 'right to consolidate' some mortgages are subject to 'all monies' terms. In these cases, surplus sales proceeds would be applied to other mortgage accounts held by the same borrower, whether or not in default.
3. What happens to landlords with MX mortgages in negative equity and negative cash flow or with bad credit ratings or excessive LTV's who cannot re-mortgage or sell?
It is impossible to give a detailed answer here without considering all of the factors involved in a specific case. However, provided that a landlord adheres to his/her mortgage conditions, it is not necessary for them to remortgage or sell before the term has ended.
In cases where the portfolio is clearly unsustainable, we can help customers consider the most appropriate exit strategy to minimise their losses as far as possible.
It is for this reason that we have a team of Relationship Managers and Commercial Consultants who seek to engage directly with our landlords to address any matters of concern as soon as they arise. We encourage customers to approach us at an early stage, before they have broken their mortgage conditions. Many landlords have Buy to Let mortgages with other lenders and we will review their full financial position, with their permission, as part of this process.
4. Are there specific "triggers" for MX loans being called in early?
Yes, although the "triggers" can differ depending on the relevant conditions that apply to each specific mortgage.
For most landlords, arrears of payments which equate (in amount) to two months' worth of payments will usually result in Mortgage Express issuing 'formal demand' for the full mortgage balance.
The mortgage conditions also provide that a wide range of other events and breaches of conditions can be used to call in the debt. However, we will only use breaches of condition which we consider to be material (for example, serious disrepair of the property) as a trigger to call in a loan.
Each case is considered on its merits and where a landlord actively engages with us and seeks our support to remedy a breach of conditions (and the portfolio is sustainable), we may decide to refrain from issuing 'formal demand' and enter into an arrangement whereby the landlord is given time to correct the breach.
Even after formal demand has been issued, we will usually seek to engage with the landlord. Where the portfolio is sustainable and the landlord is cooperative we will usually offer to reschedule the debt subject to revised terms.
5. Can or have MX appointed an LPA receiver to dispose of MX properties?
If 'formal demand' has been issued to call in the debt and an agreement to reschedule is not made, we will often appoint an LPA receiver.
In addition to managing the letting of the property and collecting rent, one of the receiver's key duties is to assess how the value of the property can best be maximised. Using their professional judgement, the receiver will usually decide upon a 'let' or 'sale' strategy.
Where a sale strategy applies, the receiver has a duty to both the customer and the lender to obtain the best price reasonably obtainable.
6. What can we, as landlords do, to cooperate and work with MX?
We ask that landlords are open and honest with us, develop a clear strategy as to what they want to achieve through their property investment and share their plans with us.
7. Should ALL landlords with MX mortgages - even ones with 15 to 20 years to run - be thinking of disposing of their MX mortgages?
Since nationalisation we have been closed to new mortgage business and are unable to offer further loans to existing borrowers. One of our key objectives is to reduce the size of our mortgage book. We want to ensure our landlords are aware of this situation and the impact this has on the services we can offer and the policy decisions that we take.
If interest rates rise in the future we will not be able to offer any new deals, so our landlords may end up on a higher rate with higher monthly payments than they could get elsewhere. Or, if a landlord needed to borrow more money, such as for property refurbishments, we will not be able to lend this money to them. Furthermore, we don't have the same ability as other lenders to offer term extensions, so we will always seek full repayment of the balance from a landlord at the end of the agreed mortgage term.
The buy to let market has also changed dramatically since the time when the majority of our landlords took out their mortgages with us. In general, rental cover requirements are greater, maximum LTVs have reduced, terms are shorter and some lenders now require loans to be agreed on a repayment basis.
As a result, landlords need to be alive to the changing market conditions and adapt accordingly. Some landlords could be better off by moving their mortgage to another lender before the end of the term. For others, it may be sensible to take steps now (such as making overpayments) to reduce their balance and potentially open up more remortgage options in the future.
8. Will MX be allowing ANY mortgages to run their full term?
Yes. Provided a landlord manages their monthly payments and maintains the Terms & Conditions of their mortgage (and subject to our responses to questions 2 and 4) then they are under absolutely no obligation to remortgage elsewhere or pay-off their loan before the end of the agreed term.
9. If MX appoint an LPA receiver, sell a portfolio, will they accept whatever they get in full and final settlement, or will they pursue the landlord for any shortfall?
A landlord remains personally liable for the whole debt and it would not be appropriate for us to simply to waive a shortfall debt. Having said this, we would usually look to agree a plan for repayment of the debt in line with the landlord's resources and financial position.
____________________________________________________________
If this has prompted further questions for you or you have any questions about your MX mortgage, it is recommended that you contact your Area Relationship Manager by calling 0844 892 1887.
And we think our lenders are ruthless.
Can you imagine your Banker wanting to do a Annual field inspection of your properties and any that weren't up to scratch would give you 30 days to refinance elsewhere.
Hi Everyone
Just had a yearly review from MX wasn't pleasant this time.
i have 9 propertys with them and never missed a payment so no worries there.
The new guy was originally there collections guy so has experience at scaring people.
i have a property coming to the end of its term in 4 years so he was asking me what my plans were and that they need all propertys off there books.
he said if no finance in place then they could come to some arrangement but in favor of them and not me meaning put all my mtge payments up on all 9 propertys.
He also said in 4 years if i was to either remtge this property or sell it then they are well within there rights to consolidate the other mtges i have with them so no way out there,can they do this as i have seperate contracts with them.
He also asked if i rented to any friends or family lucky enough i dont because if i did then i would be in breach of my contracts and did i ever buy a house with tenant already in situ lucky enough the answer was no again as again in breach of contract,he mentioned they had a guy with 90 props and he bought a house off the owner the owner then became the tenant and he made 30k from the deal,he was in breach of contract and lost all of his propertys,he had never missed any payments.
They seem to be getting very nasty i told him that he was scaring me and his answer was well thats what i'm here for to scare you as we want you off our books.
there also doing drive bys and if they see any propertys which look neglected there reposessing them.
They seem pretty desperate but not giving people a chance to remortgage the odd property as you can end up having to consolidate and if thats not possible then having to come to arrangement of upping your mtge payments on each property.
he said they dont care about us and they can do what they want as anyone who trys to take them to court fails miserably.
He asked me a few questions and gonna send his report through to me whatever that means.
i told him they are worse than the government and that the only way i would move them would be if they reduced my mtge amount,he said he's never heard anything so ridiculous and that will never happen
He wasn't amused when i told him i lived off my property money,he said i shouldn't be relying on this and that i was spposed to have another job.
Can they do this to landlords as there looking for any excuse to repossess to get there money back.
_____________________________________________________
There were subsequently 167 replies and over 14,000 views of this thread.
I believed that the thread raised 9 questions that I felt MX / UKAR should be prepared to answer.
I approached their PR company, but unfortunately received very short shift from them!
I then wrote to MX CEO Richard Banks.
Three weeks later, I was contacted by Head of Marketing and PR, Tim Newman, who said that UKAR were very happy to engage with the landlord community through PT and that they would answer my questions.
Well finally ... here they are:
Note from Mortgage Express (UKAR)...
The answers below are indicative only and are designed to outline our overall approach to the areas in question. We recommend that portfolio landlords discuss their specific circumstances with their Relationship Manager rather than relying on these general comments. Certain decisions and actions are always considered on an individual basis for a specific landlord, based on a full understanding of their account.
- - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - -
1. Are all landlords being targeted for field visits, or particular landlords who have large MX-only portfolios?
Our specialist Relationship Managers and Commercial Consultants currently provide support to portfolio landlords holding 5 or more Buy to Let mortgages with Mortgage Express, Bradford & Bingley and NRAM (Northern Rock Asset Management).
Our Relationship Managers are field based (we have around 35 working across the UK) whereas our Commercial Consultants are based in our office near Bingley in West Yorkshire and in Doxford near Sunderland.
In practice, our Relationship Managers will make field visits to landlords who have larger portfolios, or in cases where there has been some activity on the account that indicates they could benefit from this direct support or that the property may be in a poor state of repair. When arranging visits, we correspond with landlords and seek to arrange an appointment which is convenient for them.
2. We need the definitive word on sales of MX properties being used to pay off other mortgages on MX properties.
Our mortgage conditions include a 'right to consolidate' clause which applies to our portfolio landlords.
Where a property is sold as a result of a repossession or via an LPA receiver, we will apply any sales surplus to other mortgage accounts that the landlord holds with us, if these are also in default (see question 4).
Where a borrower arranges a sale or otherwise seeks a redemption of one mortgage within a portfolio, we also have a right to refuse to allow the redemption and to insist that the borrower redeems the whole portfolio. In these circumstances, rather than insisting on other redemptions, we would usually assess the equity position across the remaining portfolio and negotiate with the borrower for some or all of the surplus from a proposed sale to be used to pay down the balance on the remaining portfolio. If the remaining portfolio was already at a low LTV, we would ordinarily allow the sale to proceed without requiring any of the surplus to be applied to other properties.
It can often be best practice for the landlord to reduce their remaining debt in this way, as this can help increase the long-term sustainability of their portfolio.
In addition to the 'right to consolidate' some mortgages are subject to 'all monies' terms. In these cases, surplus sales proceeds would be applied to other mortgage accounts held by the same borrower, whether or not in default.
3. What happens to landlords with MX mortgages in negative equity and negative cash flow or with bad credit ratings or excessive LTV's who cannot re-mortgage or sell?
It is impossible to give a detailed answer here without considering all of the factors involved in a specific case. However, provided that a landlord adheres to his/her mortgage conditions, it is not necessary for them to remortgage or sell before the term has ended.
In cases where the portfolio is clearly unsustainable, we can help customers consider the most appropriate exit strategy to minimise their losses as far as possible.
It is for this reason that we have a team of Relationship Managers and Commercial Consultants who seek to engage directly with our landlords to address any matters of concern as soon as they arise. We encourage customers to approach us at an early stage, before they have broken their mortgage conditions. Many landlords have Buy to Let mortgages with other lenders and we will review their full financial position, with their permission, as part of this process.
4. Are there specific "triggers" for MX loans being called in early?
Yes, although the "triggers" can differ depending on the relevant conditions that apply to each specific mortgage.
For most landlords, arrears of payments which equate (in amount) to two months' worth of payments will usually result in Mortgage Express issuing 'formal demand' for the full mortgage balance.
The mortgage conditions also provide that a wide range of other events and breaches of conditions can be used to call in the debt. However, we will only use breaches of condition which we consider to be material (for example, serious disrepair of the property) as a trigger to call in a loan.
Each case is considered on its merits and where a landlord actively engages with us and seeks our support to remedy a breach of conditions (and the portfolio is sustainable), we may decide to refrain from issuing 'formal demand' and enter into an arrangement whereby the landlord is given time to correct the breach.
Even after formal demand has been issued, we will usually seek to engage with the landlord. Where the portfolio is sustainable and the landlord is cooperative we will usually offer to reschedule the debt subject to revised terms.
5. Can or have MX appointed an LPA receiver to dispose of MX properties?
If 'formal demand' has been issued to call in the debt and an agreement to reschedule is not made, we will often appoint an LPA receiver.
In addition to managing the letting of the property and collecting rent, one of the receiver's key duties is to assess how the value of the property can best be maximised. Using their professional judgement, the receiver will usually decide upon a 'let' or 'sale' strategy.
Where a sale strategy applies, the receiver has a duty to both the customer and the lender to obtain the best price reasonably obtainable.
6. What can we, as landlords do, to cooperate and work with MX?
We ask that landlords are open and honest with us, develop a clear strategy as to what they want to achieve through their property investment and share their plans with us.
7. Should ALL landlords with MX mortgages - even ones with 15 to 20 years to run - be thinking of disposing of their MX mortgages?
Since nationalisation we have been closed to new mortgage business and are unable to offer further loans to existing borrowers. One of our key objectives is to reduce the size of our mortgage book. We want to ensure our landlords are aware of this situation and the impact this has on the services we can offer and the policy decisions that we take.
If interest rates rise in the future we will not be able to offer any new deals, so our landlords may end up on a higher rate with higher monthly payments than they could get elsewhere. Or, if a landlord needed to borrow more money, such as for property refurbishments, we will not be able to lend this money to them. Furthermore, we don't have the same ability as other lenders to offer term extensions, so we will always seek full repayment of the balance from a landlord at the end of the agreed mortgage term.
The buy to let market has also changed dramatically since the time when the majority of our landlords took out their mortgages with us. In general, rental cover requirements are greater, maximum LTVs have reduced, terms are shorter and some lenders now require loans to be agreed on a repayment basis.
As a result, landlords need to be alive to the changing market conditions and adapt accordingly. Some landlords could be better off by moving their mortgage to another lender before the end of the term. For others, it may be sensible to take steps now (such as making overpayments) to reduce their balance and potentially open up more remortgage options in the future.
8. Will MX be allowing ANY mortgages to run their full term?
Yes. Provided a landlord manages their monthly payments and maintains the Terms & Conditions of their mortgage (and subject to our responses to questions 2 and 4) then they are under absolutely no obligation to remortgage elsewhere or pay-off their loan before the end of the agreed term.
9. If MX appoint an LPA receiver, sell a portfolio, will they accept whatever they get in full and final settlement, or will they pursue the landlord for any shortfall?
A landlord remains personally liable for the whole debt and it would not be appropriate for us to simply to waive a shortfall debt. Having said this, we would usually look to agree a plan for repayment of the debt in line with the landlord's resources and financial position.
____________________________________________________________
If this has prompted further questions for you or you have any questions about your MX mortgage, it is recommended that you contact your Area Relationship Manager by calling 0844 892 1887.
obviously most actually have insurance
