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Lender's Crisis Linked To 'grossly Overvalued' Flats

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Lender's crisis linked to 'grossly overvalued' flats

Buy-to-let loans on flats marketed by a controversial Leeds property entrepreneur, Simon Morris, lie behind some of the financial problems of the West Bromwich building society, which was forced to broker a deal to shore up its finances today.

The building society put up cash on "grossly overvalued" Morris properties at the height of the boom, according to investors, some of whom say they are now facing the prospect of repossession or bankruptcy.

Events surrounding the Simon Morris property empire are under investigation by the Serious Fraud Office and West Yorkshire police. Morris's company, SRM Holdings, and 37 subsidiaries went into administration last year, owing £50m. Morris himself, who at one point was a director of Leeds United football club, appeared on the Sunday Times rich list of young entrepreneurs at the age of 29, with assets thought to be worth £69m.

According to documents seen by the Guardian, surveyors used by West ­Bromwich in 2006 certified buy-to-let properties at what could have been up to 53% higher than their true value. Employees of valuation companies were among those questioned by police last year, along with Morris himself.

John Morris, an airline pilot who is not related, said he used a Simon Morris buy-to-let package to buy two flats at Kelso Heights in Leeds in January 2006, in each case with a loan from the West Brom­wich of £204,000. Valuers used by the West Bromwich certified each property was a four-bed let worth £237,999. Morris says an independent revaluation he commissioned later revealed each property was in fact a three-bedroom flat, worth no more than £155,000 at the time. The rental returns do not cover his mortgage.

"This is ruining my life," he said. "There is a danger of my going bankrupt as my money pot is diminishing." He said the West Bromwich was not proposing to sue the valuers who were acting for it, but has suggested Morris merely hand in his keys and surrender the properties at a loss.

John Morris is one of a group of about 100 investors in Simon Morris properties who have suffered losses. The investors believed they would make healthy profits from renting to students in Leeds in a rising market.

Morris is planning litigation against Watson & Brown, the conveyancing solicitors involved, who he said were recommended by Morris Properties at the time as part of their buy-to-let package.

Karon Brown, senior partner, said three individuals had intimated they would sue for negligence over the deals. "Any claim which is issued will be vigorously defended and we deny any allegation of negligence," she said.

Simon Morris himself said he had done nothing wrong, and that would-be investors showed poor judgment by buying at the top of the market. Lenders, such as West Bromwich, normally seek to protect themselves by lending no more than 85% of the valuation on buy-to-let deals, but Morris confirmed to Property Week last April that his company had been in the habit of "gifting" 15% of the valuation price back to the purchaser. This meant the purchaser did not have to find any deposit, and the building society loan was at risk if the valuation was too high.

A spokesman for West Bromwich said they could not comment because "there is an ongoing police investigation". But they denied the loans involving Morris properties were causing their difficulties.

Just one example of the complete farce aka the collapsing British ponzi property market.

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...buy-to-let package to buy two flats at Kelso Heights in Leeds in January 2006, in each case with a loan from the West Brom­wich of £204,000. Valuers used by the West Bromwich certified each property was a four-bed let worth £237,999. Morris says an independent revaluation he commissioned later revealed each property was in fact a three-bedroom flat, worth no more than £155,000 at the time. The rental returns do not cover his mortgage.

How do you c0ck up the number of bedrooms?

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How do you c0ck up the number of bedrooms?

By counting the bathtub as a bed.

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clearly, the staff and managers are not paid enough.

doubling their pay should ensure they are of the right calibre.

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Gotta feel for John Morris, it's ruining his life apparently. Poor chap.

:lol:

I'd like to know what airline he works for so that I can avoid it:

"John Morris, an airline pilot who is not related, said he used a Simon Morris buy-to-let package to buy two flats at Kelso Heights in Leeds in January 2006, in each case with a loan from the West Brom­wich of £204,000. Valuers used by the West Bromwich certified each property was a four-bed let worth £237,999. Morris says an independent revaluation he commissioned later revealed each property was in fact a three-bedroom flat, worth no more than £155,000 at the time. The rental returns do not cover his mortgage."

Idiot bought 2 flats at a cost of half a million pounds without visiting them and without seeing how many bedrooms they had! This man is authorised to fly hundreds of people on an aeroplane. :huh:

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so a stupid greedy person took advice from a stupid greedy organisation recommended by another stupid greedy organisation

I feel strangely numb to their pain...

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Lender's crisis linked to 'grossly overvalued' flats

Watson & Brown, the conveyancing solicitors involved, who he said were recommended by Morris Properties at the time as part of their buy-to-let package

sometimes you can only sit down in jaw slacking awe at the ability of people to suprise you with their feckwittery

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Shows the shocking greed of the last decade. West Bromwich BS has been around for 160 years - surviving several wars and depressions. Yet only now has it almost been brought to its knees - only saved by some strange new financial instrument which hasn't been properly explained to the 350,000 people who are supposed to own it (i.e. savers).

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So why aren't West Bromich being investigated for lending their depositors money against what they must have known were overvalued properties?

They're a building society ffs. It's all they do. Lend money against property. That's their business.

Time and time again the lenders avoid any sort of sanction due to claiming 'victim' status. It is no different to Goodwin and his cronies walzing off with mega-pensions, Hornby walzing off into running Boots etc.

Put the lenders in prison - then we'll start getting somewhere.

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So why aren't West Bromich being investigated for lending their depositors money against what they must have known were overvalued properties?

They're a building society ffs. It's all they do. Lend money against property. That's their business.

Time and time again the lenders avoid any sort of sanction due to claiming 'victim' status. It is no different to Goodwin and his cronies walzing off with mega-pensions, Hornby walzing off into running Boots etc.

Put the lenders in prison - then we'll start getting somewhere.

silly RK, the FSA have got important things to do, like Lunch...and for the really ambitious bonus hunters.....a working breakfast.

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