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thecrashingisles

No Money Down Shysters Are Dead In The Water

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This is interesting as it shows that even the most hardcore believers in BTL are waking up:

http://propertytribes.ning.com/forum/topic...ns-why-you-will

Still think you can do a No Money Down deal? It might be time to think again:

1. Lenders have such little appetite to lend that they are cherry-picking who they lend to.: According to my personal research only one in 20 mortgage applications where the person applying has the 25% deposit are going through to completion. What does that mean for the NMD borrower?

2. Credit rating: Credit reports are now scrutinised more than ever before by lenders. Any missed payments and they will think twice about giving you a mortgage offer.

3. Source of deposit: Most lenders now ask for the source and proof of deposit. They are suspicious of where this is coming from and now check in more detail.

3. Demise of the deal packager: Many NMD deals used to be pushed through by packagers who oversaw the whole process and used a "friendly" valuer who they could "influence". There are no deal packagers left as far as I am aware.

4. Brokers no longer allowed to choose which valuer goes out: Brokers used to be able to select a valuer from a "panel" of approved valuers. This meant they could work with a "friendly" valuer. This practice has now largely stoppped and many lenders are using an in-house valuer who cannot be "influenced".

5. Property Valuation: RICS valuers have been briefed how to spot signs that someone is trying to get a false valuation. If in doubt, they will down-value. By law, they have to value the property at the purchase price, or market value, whichever is the lower. By lying to the valuer about the price, or not disclosing the net price or how the deal is being structured, you are committing mortgage fraud!

6. Rental Valuation: Rents are dropping, making it harder to get a deal to stack. A down-valuation on the rent will stop any deal in its tracks.

7. Contesting a down valuation: Until recently, you used to be able to contest a down valuation by supplying comparables. These are now no longer accepted. The decision of the valuer generally stands.

8. Solicitors and lenders require full disclosure to all parties. If there is any evidence of non-disclosure, or the lender gets wind of anything fishy, they will withdraw the mortgage offer. This happened to one person I know the day before completion, and that person has been left on a bridging loan of £2K per month. It is extremely risky to buy anything on a bridging loan for the above reason.

9. Seasoning of title: Lenders now require you to have proof of ownership of the property for a minimum of six months before remortgaging or re-financing. This means bridging loans are no longer a vehicle for purchasing NMD.

10. Education: The internet has now provided education and transparency to allow people to understand the truth about NMD deals. This can only be a positive thing for the property industry as NMD was simply not sustainable and was largely a factor in causing the first credit crunch.

The discussion below has some interesting comments too:

I spent 6 months doing research of how to find a legitimate NMD deal structure after the MX route was withdrawn - I was so desperate to keep doing NMD's!

I spoke to virtually every scheme provider in GREAT detail, spoke to the CML, checked out the Law Society guidelines, spoke to mortgage brokers, solicitors etc ... and finally came to the conclusion that there were no longer any legitimate ways of doing NMD.

Edited by thecrashingisles

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People with no money who work down the chip shop never were meant to buy a property, nevermind a BTL portfolio, FFS. :rolleyes:

All this idiosy started with Thatcher and her council housing sell off brainwave. Everyone thought of their home as a castle, even if it was a 1bedroom, rat infested hole. At least they owned that 1bedroom rat infested hole though (or rather, the bank did). Tragic.

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Some more quotes:

I heard a NMD practicioner speak late last year where he openly talked about bribing valuers and estate agents. 70 odd people lapped it up, smiling, nodding their heads. The speaker kept saying he was buying 10 NMD deals per week. At the end of the talk, he let slip that he was buying them for clients, not for himself. In fact, he admitted that he had not purchased anything for over a year!
I am just rather cynical because there are several current posts on Singing Pig discussing schemes where large returns were promised, but were never forthcoming. Those people appear to have lost all their money that they put into those schemes.

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Some more quotes:

I am just rather cynical because there are several current posts on Singing Pig discussing schemes where large returns were promised, but were never forthcoming. Those people appear to have lost all their money that they put into those schemes.

course, NMD means you had nothing to lose.

silly fracking fracking fracking fracking Bankers.

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5. Property Valuation: RICS valuers have been briefed how to spot signs that someone is trying to get a false valuation. If in doubt, they will down-value. By law, they have to value the property at the purchase price, or market value, whichever is the lower. By lying to the valuer about the price, or not disclosing the net price or how the deal is being structured, you are committing mortgage fraud

Seems allegedly pertinent to little miss fabulous t1ts in the Hollyoaks thread.

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All this idiosy started with Thatcher and her council housing sell off brainwave.

Yeah, right.

I did hear that Thatcher was a Post Office telegram girl in 1939.

Seems there was this urgent telegram from Hitler to Chamberlain and she forgot to deliver it.

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Guest An Bearin Bui
This is interesting as it shows that even the most hardcore believers in BTL are waking up:

http://propertytribes.ning.com/forum/topic...ns-why-you-will

The discussion below has some interesting comments too:

Didn't even know the half of these tricks investors were pulling - goes to show how out of touch the housing market has been with both the law and sanity. I had come across the scam where properties are valued above what the buyer is offering by a 'friendly' valuer though. A friend of mine bought this way - had no money to put down but a 'friendly' mortgage broker managed to get a convenient valuation that allowed him to get a 90% mortgage. This was a way for brokers. EAs and valuers to collude to make a sale and keep a chain going when prices were way beyond normal affordability. If this has all been taken away, how on earth are they going to get sales now??

Meanwhile EAs in my neighbourhood are still pricing properties at peak early 2008 prices. Ho-hum... :rolleyes:

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Didn't even know the half of these tricks investors were pulling - goes to show how out of touch the housing market has been with both the law and sanity.

Absolutely. Prices were pushed so high that people had a choice between taking a liar loan or not buying.

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Guest skullingtonjoe
People with no money who work down the chip shop never were meant to buy a property, nevermind a BTL portfolio, FFS. :rolleyes:

All this idiosy started with Thatcher and her council housing sell off brainwave. Everyone thought of their home as a castle, even if it was a 1bedroom, rat infested hole. At least they owned that 1bedroom rat infested hole though (or rather, the bank did). Tragic.

"Yeah, but it`s my property, innit? I get instant respect by being a property owner." :lol::rolleyes:

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"Yeah, but it`s my property, innit? I get instant respect by being a property owner." :lol::rolleyes:

:lol: I've seen some of the property people own and there ain't no respect in it. Just dodgy sh1tholes that should really be condemned, not sold on as "needing modernisation". :rolleyes:

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Meanwhile EAs in my neighbourhood are still pricing properties at peak early 2008 prices. Ho-hum... :rolleyes:

I have just moved to my third rented house and have had loads of people telling me that I should be buying now "while houses are so cheap". :blink:

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I have just moved to my third rented house and have had loads of people telling me that I should be buying now "while houses are so cheap". :blink:

And the fact that the so many people think houses are now "cheap" is a sign that we're nowhere near the bottom.

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I have just moved to my third rented house and have had loads of people telling me that I should be buying now "while houses are so cheap". :blink:

yes, the average small three bedder costing £170K.

cheap as chips. 7 times the average salary.

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People with no money who work down the chip shop never were meant to buy a property, nevermind a BTL portfolio, FFS. :rolleyes:

All this idiosy started with Thatcher and her council housing sell off brainwave. Everyone thought of their home as a castle, even if it was a 1bedroom, rat infested hole. At least they owned that 1bedroom rat infested hole though (or rather, the bank did). Tragic.

Council house sales actually started under Callaghan.

At least in the early 1980s people were paying sensible prices with properly underwritten mortgages, and all are better off as a result of the deal, unlike the past decade.

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