'i Lost Seven Properties' Cut-Price Repossession Sales 'are Cheating The Taxpayer'

[singlemalt]

A landmark battle between a borrower and lender has provided evidence of what many distressed homeowners have always suspected – lenders sell repossessed properties at less than their market value, making the financial position of the borrower much worse.

Repossessions are running at 3,000 properties a month, and this figure is expected to rise'.

.......

'But in the case of retired policeman-turned-landlord Keith Young, who had seven properties in the Newcastle upon Tyne area repossessed and sold by his lender during 2011, a challenge was mounted

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Full Article

I suppose he needed some wise investments to supplement his meagre police pension and give him a comfortable retirement. He clearly saw BTL as a one way bet and obligingly piled in. Filled his boots. Don't reckon he banked on potentially coming out penniless and wearing sandals (literally).

Maybe I'm too harsh I think his obvious genuine concern for the taxpayer is to be applauded. There's so much concern for "The taxpayer" these days

How many young people in the Newcastle area have been stuffed by people like this guy. The sooner people like this who feed off the rest of us get wiped out financially the better for all!

[Giordano Bruno]

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Full Article

I suppose he needed some wise investments to supplement his meagre police pension and give him a comfortable retirement. He clearly saw BTL as a one way bet and obligingly piled in. Filled his boots. Don't reckon he banked on potentially coming out penniless and wearing sandals (literally).

Maybe I'm too harsh I think his obvious genuine concern for the taxpayer is to be applauded. There's so much concern for "The taxpayer" these days

How many young people in the Newcastle area have been stuffed by people like this guy. The sooner people like this who feed off the rest of us get wiped out financially the better for all!

I have serious doubts about whether Keith Young is concerned about the taxpayer. He is the one who is liable for the shortfall between his debt and the selling price.

It's definitely an interesting and a bearish story:-

Repossessions are running at 3,000 properties a month, and this figure is expected to rise.

That is bound to dent sentiment. Pity that it is not a more mainstream publication.

[Si1]

A landmark battle between a borrower and lender has provided evidence of what many distressed homeowners have always suspected – lenders sell repossessed properties at less than their market value, making the financial position of the borrower much worse.

of course the fact that the mortgageee failed to sell them for "market value" within a reasonable timescale has no bearing at all on the matter

[campervanman]

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[

How many young people in the Newcastle area have been stuffed by people like this guy. The sooner people like this who feed off the rest of us get wiped out financially the better for all.

* BTL is of course exclusive to anyone born between 1946 and 1965

[tim123]

of course the fact that the mortgageee failed to sell them for "market value" within a reasonable timescale has no bearing at all on the matter

agreed

all this article proves to me is that valuers over value properties even when they have no vested intererst in obtaining the comission for sale

tim

[StainlessSteelCat]

I don't know who's buying them then - it's always seemed impossible to get a deal done with the few repos I've offered on (20-30% off). It's always been - we want the asking price and nothing less. So they stay unsold for months.

[Saving For a Space Ship]

consequences can be ruinous, with lenders able to chase debt for up to 15 years.

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2193459/Repossession-sales-cheating-taxpayer.html#ixzz24dEL3hUz

when did it become 15 yrs? I thought it was 12 yrs, whereas non mortgage debt was 6 yrs.

A more interesting area for investigation, would be who gets first pick at these 'below market price' properties.

ie Ea's and their mates', Big btl barons giving big backhanders, corporations

[Daveky]

Looking at him I think he's most worried about the wife 'wanting her own space' should the other houses go.

[tim123]

I don't know who's buying them then - it's always seemed impossible to get a deal done with the few repos I've offered on (20-30% off). It's always been - we want the asking price and nothing less. So they stay unsold for months.

I've looked at two in the past few months, both requiring a full makeover to make them habitable.

Repo (1) AP 99K, currently SSTC at 91K. Identical (good condition) flat next door, AP OO 110K (I'm told that after several months they eventually have an acceptable offer which I shall be surprised if it's over 105). These flats are "un-lettable" so the BTL brigade can't buy them.

Repo (2) AP 95K, currently SSTC at 85K. Similar, but larger flats on the same estate AP 100-120K but none of them moving at that price. There are also several available to let at various prices from 575 to 625, this being a fast turnover estate. This particular flat was amongst the smallest 2 bed that I have ever seen in my life. It will be a tough deal to let it.

In both cases I think the AP was fair for a good condition property, but they aren't. I suspect that they price as a "try on" in case anybody "fell in love" and is prepared to do the work for nothing, but they aren't the sort of property where that is likely and there certainly isn't any "wow" factor when you walk through the door.

I turned them both down as they were too small. I might have just done a deal at 90 for the first, but the second one is so small I would have only considered it if I took the dividing wall down between the bedrooms and made it a "good size" 1-bed, but then the value would have been, at best, 75K.

tim

[Dorkins]

agreed

all this article proves to me is that valuers over value properties even when they have no vested intererst in obtaining the comission for sale

tim

The valuer was paid "several thousand pounds" by the ex-landlord for his opinion, so if anything he had a vested interest in coming up with the answer the ex-landlord wanted.

[yorkshireman]

He did not 'lose seven properties'. Property by definition, is something that you own and have title to. If they had been his properties, owned by him, then he would have been able to hold on to them, sell them, or rent them out. The reality is that his business has failed, like many other better businesses, as his business model was based on the illusion that property prices always go up. I read only yesterday, that UKAR was set up to prevent the collapse of Northern Rock et al and this is not true. Northern Rock had collapsed, just like this man's 'property' business.

As usual with the DM, we only know a part of the sob story and we would need to know, the amount of the mortgage on the properties, their location, the level of arrears, the condition, rentability and saleability of the houses, the number of houses for sale in those areas and the actual sale prices that have been achieved.

I suspect that we would find that the EA's and valuers were living in the same dream world that this man and other 'property developer types' inhabit and that the taxpayer had received fair value in a falling market.

[Warwick-Watcher]

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Full Article

I suppose he needed some wise investments to supplement his meagre police pension and give him a comfortable retirement. He clearly saw BTL as a one way bet and obligingly piled in. Filled his boots. Don't reckon he banked on potentially coming out penniless and wearing sandals (literally).

Maybe I'm too harsh I think his obvious genuine concern for the taxpayer is to be applauded. There's so much concern for "The taxpayer" these days

How many young people in the Newcastle area have been stuffed by people like this guy. The sooner people like this who feed off the rest of us get wiped out financially the better for all!

Notice that he lives in Essex with his wife yet BTLs were all in Newcastle.

Perhaps he didn't know the local market, living 200 miles away?

He came, he gambled, he lost. End of!

[thecrashingisles]

Is it just me or does the level of general bearishness in the media exceeds anything we saw in 2008/2009? If this is backed up in the indices over the next couple of months I really think it will be game over.

[righttoleech]

I want to "fill my boots" on stories like this. Greed does not always pay.

[Rupert The]

* BTL is of course exclusive to anyone born between 1946 and 1965

Thats right. Apparently there was no such thing as BTL before the 1st boomer bought his 2nd house & the practice will cease altogether when the last boomer dies.

When anyone from generation x onwards sells a house, they will not try to make obcene profits from it but "do the right thing" by selling it for much less than the market price.

[porca misèria]

Is it just me or does the level of general bearishness in the media exceeds anything we saw in 2008/2009? If this is backed up in the indices over the next couple of months I really think it will be game over.

thisismoney has been full-on-HPC for years. Nothing new there.

[Mrs Bear]

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Full Article

I suppose he needed some wise investments to supplement his meagre police pension and give him a comfortable retirement. He clearly saw BTL as a one way bet and obligingly piled in. Filled his boots. Don't reckon he banked on potentially coming out penniless and wearing sandals (literally).

Maybe I'm too harsh I think his obvious genuine concern for the taxpayer is to be applauded. There's so much concern for "The taxpayer" these days

How many young people in the Newcastle area have been stuffed by people like this guy. The sooner people like this who feed off the rest of us get wiped out financially the better for all!

I have posted about this before, but a year or so ago I met a bloke* who made a business of buying and tarting up repos. He said he had an arrangement with local EAs, who would tip him the wink when one became available. From what I gather they never went on the open market, of if they did it was a for a token few days, for the say-so. EAs in turn apparently had an arrangement with the banks.

This was in Plymouth or Portsmouth, forget which. All the properties were cheap, lower end stuff, and after quick cheap tart-up he was not renting out but selling on, nearly always to BTL investors. He told me he was getting them so cheaply he could easily make 10% and had recently made as much as 14%.

*there's no accounting for who you might meet at friends' lunch do's, even when the friends are perfectly nice people.

[@contradevian]

Notice that he lives in Essex with his wife yet BTLs were all in Newcastle.

Perhaps he didn't know the local market, living 200 miles away?

He came, he gambled, he lost. End of!

What is the betting his tenants were DHSS clients? Refused to pay over housing benefit to their feudal robber baron landlord `darn sarf` and pocketed the cash? I hope they did.

He's wasted his money on professional surveys. He hasn't got a leg to stand on.

Edited August 26, 2012 by Socially Housed

[up2late]

If he thought he was in a pickle before, wait and see what things are like once he's blown thousands on legal fees.

The lender will get their own expert report which says different to his. As others have pointed out, any value other than what someone is willing to pay at the time and point of sale is questionable anyway. The case will be lost and landlord will be ordered to pay the lender's costs.

He could have had a nice retirement if only he'd kept away from property.

Oh well. Too bad.

[ader]

I remember in the 1980s that banks had internal lists of repos that were distributed to all staff in case they wanted a house.

Perfectly legal as it was just a further avenue of advertising the properties. I doubt the practice prevails today though.

[@contradevian]

If he thought he was in a pickle before, wait and see what things are like once he's blown thousands on legal fees.

The lender will get their own expert report which says different to his. As others have pointed out, any value other than what someone is willing to pay at the time and point of sale is questionable anyway. The case will be lost and landlord will be ordered to pay the lender's costs.

He could have had a nice retirement if only he'd kept away from property.

Oh well. Too bad.

The only way he could win would be proving that the bank had failed procedurally in some way to obtain the "best offer." For example even when they have an offer accepted they usually place an advert in requesting further offers. Such as this one..

NOTICE OF OFFER Property address: 23 St. Michaels Way, Roche, St. Austell, Cornwall PL26 8FG By order of the mortgagees in possession, we would advise that an offer has been made for the above property in the sum of 110,000. Any person wishing to increase on this offer should notify the agents of their best offer within the next 7 days

If everything has been done by the book, to get the best offer, then he can kiss goodbye to winning any case.

[Woot]

Is it just me or does the level of general bearishness in the media exceeds anything we saw in 2008/2009? If this is backed up in the indices over the next couple of months I really think it will be game over.

Agree entirely. I was commenting on this to my OH only yesterday. Several sources have published on the falling UK housing market in the past couple of months - after years of bullish speculation, while a quick search highlights lots more. Is this the sentiment tipping point perhaps?

http://mypropertypowerteam.com/remortgage-misery-as-falling-property-prices-slash-equity/

http://www.guardian.co.uk/business/2012/aug/14/property-sales-rics-survey-house-prices

http://business.ukplurk.com/2012/08/uk-house-prices-decline-in-july.html

[Bruce Banner]

Why the hell should the lender wait for his money, in the current market it could take years to achieve what a delusional surveyor values it at. Personally, I don't see why a lender shouldn't sell at whatever price is acceptable to them, it's their house, sell quickly and cut your losses.

[newbonic]

I have posted about this before, but a year or so ago I met a bloke* who made a business of buying and tarting up repos. He said he had an arrangement with local EAs, who would tip him the wink when one became available. From what I gather they never went on the open market, of if they did it was a for a token few days, for the say-so. EAs in turn apparently had an arrangement with the banks.

.....

From the DM article: "Regulations state that lenders must market repossessed properties ‘as soon as possible’ and sell them ‘for the best price that may reasonably be paid’. Lenders use contractors that in turn may engage estate agents or auctioneers.

Agents, who are often paid low rates for repo sales, may favour regular buyers, such as local landlords, rather than pursue the highest possible offer."

In my view it should be law that repossessed properties should be put up for public auction with at least 2 months publicity. As it is, it's too easy for dodgy EAs to make sure that a BTL or property developer mate gets first dibs on the best stuff.

I can remember a conversation with an EA* back in the early noughties when the boom was gathering full steam - he actually bragged how him and a mate had bought a flat that had come on the market with them, tarted it up cosmetically for under 2k and then flipped it for 20% profit in the space of a couple of months. At no point were they acting in the best interests of the seller.

* he was almost comically stereotypically spivvy: young guy, sharp suit, hair gel, black BMW

[Democorruptcy]

Has The Masked Tulip done a comment on that article?

I almost bought a repo in Swansea a few weeks ago. On for a ludicrous and greedy 330K asking price for 2 years and did not sell. Changed EAs a few times before very slowly dropping the asking price to late 200s. It then got repoed and sold for 210K at auction - 210K is the new market price for that house in that road in Mumbles. Dont moan about things if you are a greedy house seller - the market is crashing.

- Bob, Swansea, 26/8/2012 09:34