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Ukar Ask Btlers To Prove Their Innocence

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Taken from Property 118, Mortgage Express UKAR LPA Receivership

It has come to our attention that Mortgage Express (now UKAR – UK Asset Resolution) have recently been appointing LPA receivers with no apparent justification.

This won't be news to some of the old hands I'm sure, but if it is as the Property118 shill suggests it shows the Wild West that Mortgage Express became in the dog days of the pre-2008 credit boom. The Property118 version of the story is this that Mortgage Express sales people suggested to mortgage brokers that a good business model for a BTLer is to buy cash then 'remortgage' at a higher price than the price paid.

I guess that gives you the classic BTL as cash machine magic trick where you can extract capital appreciation into cash in your hand. Also this can create very high loan to value meaning that you are very highly geared. In principle you could have bought at £90k, remortgaged at £100k at 90% LTV interest only, (and therefore the gearing is in principle infinite!). The only cost of creating the asset carried at margin would be the cost associated with the investment return foregone for a couple of months when the the £90k was locked up in the BTL.

It seems however that the UKAR play works like this:

  • You can't use a remortgage product when there's no mortgage to remortgage
  • UKAR can assume that the remortgage product that Mortgage Express wrote was dodgy, i.e. it was a cash purchase then a remortgage
  • Just on the assumption that it was dodgy, they call in the mortgages
  • The BTLer has an easy out if it wasn't a cash purchase
  • If it was a cash purchase and the remortgage was dodgy, then the BTLer has to remortgage elsewhere, but basically they've got off lightly
  • If however high-LTV or some other problem means that they can't remortgage elsewhere, they have a serious problem
  • They can sell - but that may crystallise a loss. As they were probably mortgaged to the hilt, negative equity is a distinct possibility
  • Their legal options are not too sweet. The BTLer can claim that their solicitor didn't advise them properly, but obviously the solicitor is not going to just throw themselves under a train, so that means getting another solicitor to take on your own solicitor. Which is all money down the drain

I love the line "without apparent justification". Presumably the UKAR people have worked out that there are enough dodgy mortgages in the Mortgage Express book that you can just throw a stick at some of the mortgages and the trawl will cause some people to move their mortgage. Out of the money BTLers who would otherwise have no inclination to do anything but hold the asset and have the tenants service the mortgage will be unable to fight the 'unjustified' move to call in the mortgage because there will be some skeleton in the cupboard which means any daylight on the mortgage will merely evidence some other fraud that they've committed. It looks like UKAR are not clowning around with the ex-Mortgage Express BTLers. One assumes that the same crap is to be found in all the other major lenders, but they have no cause to expose it...

Edited by ChairmanOfTheBored

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Oh oh where do I start?

'Just this week we have heard from landlords with very large portfolios, who have never been in breach of any of their mortgage conditions, but have now had their loans called in and subsequently been informed that Mortgage Express have appointed LPA receivers.'

Says who? I'd suggest they read the T+C carefully.

The fact they have 'very large protfolios' indicates a very leverages person.

'Our initial investigations reveal that these borrowers purchased properties for cash or with the benefit of bridging loans and very quickly re-mortgaged them to Mortgage Express, sometimes on the day of purchase. This business model was particularly common during the period of 2003 to when Mortgage Express eventually closed its doors just after the collapse of the Northern Rock. Both former lenders mortgage books are now managed by UKAR (UK Asset Resolution) who have made no secret of the their agenda to call in as many mortgages as possible.'

You mean they might have fibbed about how much debt they'd took on?

'On many occasions UKAR have been accused of acting immorally and there have been many stories of affected borrowers shared here at Property118.com'

Immorally??? Courts don't take a line on morality. Is it legal or not?

'Just recently though, Mortgage Express, or should I say UKAR, have been demanding repayment of loans and subsequently appointing LPA receivers without full justification and then inviting borrowers to prove they are not in breach of contract. When challenged UKAR have implied that full facts surrounding remortgages were never disclosed to them.'

Any mortgage provider can requests the repayment of a loan. Standard T+Cs.

Bascailly, from 2002-2007 there loads of BTL'ers pushing the envelope on borrowing, leverage and process.

How often did sites like 188 provide 'guidance' on which broker to get an application approved?

UKAR is preparing itself for the upcoming rises in IRs. Its got a lot of work todo. Its starting early.

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The guy that runs that site is a former mortgage broker and seems to be on a nice little earner. Charging BTL's £395 for a fixed fee consultancy.

The first step though is an initial investigation into your circumstances. I will be pleased to review correspondence you have received from Mortgage Express for a fixed fee of £395 inclusive of VAT, and in complete confidence of course. To instruct me you will need to complete the short form at the foot of this article and make payment of my fee, either by credit/debit card or via PayPal.

He'll organise a direct access barrister too for £2500 fixed fee. The legal professions cash tills will be jingling again thanks to BTL cash.

The end of BTL 'death by a thousand legal actions?'

Edited by aSecureTenant

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Any mortgage provider can requests the repayment of a loan. Standard T+Cs.

Eh? I think you're off the mark on that particular point. It's a mortgage, not an overdraft. Presumably a lender cannot call in a mortgage during its term unless you've in some way broken the terms, (e.g. missed a mortgage payment).

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Eh? I think you're off the mark on that particular point. It's a mortgage, not an overdraft. Presumably a lender cannot call in a mortgage during its term unless you've in some way broken the terms, (e.g. missed a mortgage payment).

Yes and no.

They need a reason but they can basically make up a reason.

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The guy that runs that site is a former mortgage broker and seems to be on a nice little earner. Charging BTL's £395 for a fixed fee consultancy.

He'll organise a direct access barrister too for £2500 fixed fee. The legal professions cash tills will be jingling again thanks to BTL cash.

In the comments section where he gives an anecdotal and suggests that "he expects an instruction" from the troubled BTLer, I thought for a moment that he was an estate agent and that he was suggesting that the BTLer would have the sense to quit whilst they were behind before it got really ugly, but I assume that actually you have it right.

The end of BTL 'death by a thousand legal actions?'

The interesting thing is that the CML data shows that money is still flowing into BTL. I think that the rumours of outrageous returns still loom large in the minds of the great unwashed even as we enter the time when some of the the late entrants to the pre-2008 bubble phase are starting to have to take their losses. I suspect that the death of BTL will actually be a long and tedious affair discovered in private and without fanfare.

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Yes and no.

They need a reason but they can basically make up a reason.

That's fair enough. As the threads willie posted links to show, even a drop in LTV is enough if it takes the LTV above the terms of the mortgage.

I seem to recall that some of these specialist lenders have mortgage books which are quite geographically concentrated so we can hope that forcing some sales will pull down prices allowing UKAR to force other sales. Hopefully some 2014 vintage BTLer snaps up the bargain so they can take their share of the losses on the next leg down. And hopefully there will be losses all the way down to saner prices for crap flats all across this great nation.

Edited by ChairmanOfTheBored

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Eh? I think you're off the mark on that particular point. It's a mortgage, not an overdraft. Presumably a lender cannot call in a mortgage during its term unless you've in some way broken the terms, (e.g. missed a mortgage payment).

Page 20

6 When our 'power of sale' arises

Our statutory power to sell the property arises as soon as you sign the mortgage deed.

web.archive.org/web/20070310232248/http://www.mortgage-express.co.uk/pdf/Conditions2004.pdf

I can't get this link to work - copy & paste if anybody is interested.

Edited by neontetra

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Page 20

6 When our 'power of sale' arises

Our statutory power to sell the property arises as soon as you sign the mortgage deed.

web.archive.org/web/20070310232248/http://www.mortgage-express.co.uk/pdf/Conditions2004.pdf

I can't get this link to work - copy & paste if anybody is interested.

That's interesting! You learn something everyday.

Why then do UKAR not just exercise the Power of Sale? Am I way off track here, or does the politics play better if you just pick on the chancers who want to keep quiet about their own dirt? Hence this is a way of shrinking the mortgage book without producing a bunch of Wronged Faces of Daily Mail readers.

Edited by ChairmanOfTheBored

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The guy that runs that site is a former mortgage broker and seems to be on a nice little earner. Charging BTL's £395 for a fixed fee consultancy.

He'll organise a direct access barrister too for £2500 fixed fee. The legal professions cash tills will be jingling again thanks to BTL cash.

The end of BTL 'death by a thousand legal actions?'

What happened to his brokerage? ;)

Looks like brokers at one of the company's franchises ran amok. http://www.eveningnews24.co.uk/news/business/fraudsters_got_off_lightly_business_chief_1_755549

My brother has been to a couple of new QC celebratory parties last few years, in impressive surroundings in one of the Lincoln's Inn rooms, in gratitude as well as probably friendship, for quite a few high value instructions to different chambers for counsel. My brother doesn't own a house as a solicitor. I wasn't aware just anyone from the street could hook up with barristers, but no doubt his solicitor could.

On the fund-raising for the effort and case against West Brom.... http://www.property118.com/tracker-rate-campaign-goes-to-parliament/62913/

REQUEST FOR HELP!

I expect to be called to London to provide further briefings to both MPs and and the media and intend to use the campaign marketing fund to pay for my travel expenses, wining and dining key contacts and loss of *fee-earning time from other consultancy work, (*capped at a maximum of £500 per day). We need to top this fund up and I am highly reliant on your generosity for this as the people I will be meeting will not be too impressed if the lunch budget only extends to a McDonalds or a Subway! Please donate HERE.

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That's interesting! You learn something everyday.

Why then do UKAR not just exercise the Power of Sale? Am I way off track here, or does the politics play better if you just pick on the chancers who want to keep quiet about their own dirt? Hence this is a way of shrinking the mortgage book without producing a bunch of Wronged Faces of Daily Mail readers.

Power of Sale requires a Court Order. LPA Receivers doesn't?

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That's interesting! You learn something everyday.

Why then do UKAR not just exercise the Power of Sale? Am I way off track here, or does the politics play better if you just pick on the chancers who want to keep quiet about their own dirt? Hence this is a way of shrinking the mortgage book without producing a bunch of Wronged Faces of Daily Mail readers.

I have spent years wondering that. Can only be a publicity thing. 10 years reading these contracts and I can't think of one that doesn't specify how easily they can force sale. MX are a bit of a dodgy one (more than most) as MEX promoted one day re-mortgages to BMV buyers and the property clubs. It could never be argued that they didn't know what was going on.

Unlike me to ever come down on the side of any BTL but I have to say that the MX receivers are an especially shoddy lot.

Another thread on LTV and margin calls here.

http://www.housepric...pic=81288&st=60

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From the little attention I've paid to LL forums, eg the action against West Bromwich, I get the impression that this Alexander guy is engaging in a desperate attempt to protect his reputation against the obvious flaws in the BTL strategy which he has been pushing hard on a professional basis. He's coining it in on the way, just in case he fails.

Mortgage Express Correspondence Review by Mark Alexander of Property118.com*

Price: £ 395.00

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Power of Sale requires a Court Order. LPA Receivers doesn't?

Much easier to scare them into selling, re-mortgaging or bankruptcy. It can be time consuming but usually works. If it doesn't they force sale.

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That's interesting! You learn something everyday.

Why then do UKAR not just exercise the Power of Sale? Am I way off track here, or does the politics play better if you just pick on the chancers who want to keep quiet about their own dirt? Hence this is a way of shrinking the mortgage book without producing a bunch of Wronged Faces of Daily Mail readers.

It`s not about shrinking the mortgage book they have a finite time to clear the books, there`s also another part of UKAR which is UKAR coprate services and this is the company that`s in charge of HTB supply and demand comes to mind

http://www.housepric...howtopic=194478

Edited by long time lurking

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What happened to his brokerage? ;)

Looks like brokers at one of the company's franchises ran amok. http://www.eveningne..._chief_1_755549

My brother has been to a couple of new QC celebratory parties last few years, in impressive surroundings in one of the Lincoln's Inn rooms, in gratitude as well as probably friendship, for quite a few high value instructions to different chambers for counsel. My brother doesn't own a house as a solicitor. I wasn't aware just anyone from the street could hook up with barristers, but no doubt his solicitor could.

On the fund-raising for the effort and case against West Brom.... http://www.property1...rliament/62913/

Barristers can now take instructions from anyone, but the competition element is that their fees are by contractual agreement with the client (ahem, sry - customer).

Sounds great, but it will just lead to profit-is-in-the volume business model - corporates/agencies with advertising dominance will capture everything. The independent professional fades into the mists of time.

The bar is expected to shed 50% of members over the next few years.

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UKAR is preparing itself for the upcoming rises in IRs. Its got a lot of work todo. Its starting early.

UKAR are trying to clear their books completely this has to be done before the privatisation of the taxpayers stake in RBS can take place

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I have spent years wondering that. Can only be a publicity thing. 10 years reading these contracts and I can't think of one that doesn't specify how easily they can force sale. MX are a bit of a dodgy one (more than most) as MEX promoted one day re-mortgages to BMV buyers and the property clubs. It could never be argued that they didn't know what was going on.

Unlike me to ever come down on the side of any BTL but I have to say that the MX receivers are an especially shoddy lot.

Another thread on LTV and margin calls here.

http://www.housepric...pic=81288&st=60

It's fascinating. I see that The Mortgage Works has the same clause in their 2012 T&C's, albeit rather more heavily disguised. BTL is nasty! Who would enter into such a contract? At any time the bank has the right to close out your leveraged position. I guess that people in the UK really do believe that house prices only ever go up.

B&B bought Mortgage Express from Lloyds Group in 1997 whilst they were still a mutual then listed in 2000. What more pressing evidence do we need of a predatory financial sector than a mutual that becomes a plc and then starts writing BTL mortgages with clauses like this?

I love the hpc massive. Every time I think that I'm cynical enough to know what's what I get schooled about just how nasty and predatory our financial sector really is and the extent to which the price of shelter has been set by gullible idiots who would like to see themselves as canny but are in reality quisilings of the worse sort.

Edited by ChairmanOfTheBored

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What happened to his brokerage? ;)

Looks like brokers at one of the company's franchises ran amok. http://www.eveningnews24.co.uk/news/business/fraudsters_got_off_lightly_business_chief_1_755549

My brother has been to a couple of new QC celebratory parties last few years, in impressive surroundings in one of the Lincoln's Inn rooms, in gratitude as well as probably friendship, for quite a few high value instructions to different chambers for counsel. My brother doesn't own a house as a solicitor. I wasn't aware just anyone from the street could hook up with barristers, but no doubt his solicitor could.

On the fund-raising for the effort and case against West Brom.... http://www.property118.com/tracker-rate-campaign-goes-to-parliament/62913/

I have followed almost every post on the issue of West Brom on Property 118. It is as though that guy has all of them under some kind of spell. He requests money for this or that and they cough up with no questions asked. Then after they have complied with his wishes, and coughed up money to him they then spend days and post after post thanking him profusely, and telling him how amazing he is. It is truly strange

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I have followed almost every post on the issue of West Brom on Property 118. It is as though that guy has all of them under some kind of spell. He requests money for this or that and they cough up with no questions asked. Then after they have complied with his wishes, and coughed up money to him they then spend days and post after post thanking him profusely, and telling him how amazing he is. It is truly strange

Bit like a Money Mose, leading his faithful?

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I have followed almost every post on the issue of West Brom on Property 118. It is as though that guy has all of them under some kind of spell. He requests money for this or that and they cough up with no questions asked. Then after they have complied with his wishes, and coughed up money to him they then spend days and post after post thanking him profusely, and telling him how amazing he is. It is truly strange

The Mark Alexander story in his own words from LinkedIn.

In June 1989 I purchased a three bedroom detached bungalow for £73,000. By June 1992, its value had fallen to £42,000 and times were tough. I couldn"t afford to live in the property any longer as interest rates had hit 15%, I had a newborn daughter and I had become the only income earner. Due to negative equity the property couldn"t be sold so moving out was the only realistic option. I decided to let the property and rent elsewhere. The rent I received didn"t completely cover the mortgage payments but I was marginally better off as the rented property cost less and I scraped by. Times move on and I still own the bungalow. It is worth well over double and approaching treble what I paid for it now. It has been remortgaged several times, allowing me to use the cash released as deposits for further properties and to provide liquidity for a rainy day.

Rental income is the life blood of any property investment business. Finding the right tenants, securing rental streams, keeping costs to a minimum and operating tax efficiently requires skill and most of all reliable advice and contacts. Having a strategy and the people skills to ensure that my plan was implemented effectively was crucial.

I continue to follow this strategy across my portfolio of properties and businesses. This strategy has allowed me to build a multimillion pound portfolio of residential investment property as well as a variety of successful businesses. My journey has seen me working alongside regulators, the Bank of England and various companies where my skill sets have been transferable.

I share my experiences with anybody who cares to listen via public speaking and electronic communications. I have helped thousands of landlords to build highly lucrative portfolios of investment property and businesses by sharing my own experiences and theirs.

Property is my chosen medium to achieve financial independence; however, financial wealth alone is not enough for me.

And...

Together with my family we own and manage a property portfolio which stretches from Whitley Bay in Tyne and Wear to The Wirrall, Manchester, thorough Yorkshire, in the Midlands, East Anglia and as far south as Portsmouth.

Would seem that he's not just doing this out of the goodness of his heart.

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Found an article from FT Advisor quoting Mark Alexander stating that if the Property 118 action against West Bromwich fails then brokers and solicitors could be in the firing line. (sorry link won't paste and can't copy article as I believe FT have hassled HPC over copyright.)

Is this the real reason for Mark Alexander's involvement with the West Brom case?

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Found an article from FT Advisor quoting Mark Alexander stating that if the Property 118 action against West Bromwich fails then brokers and solicitors could be in the firing line. (sorry link won't paste and can't copy article as I believe FT have hassled HPC over copyright.)

Is this the real reason for Mark Alexander's involvement with the West Brom case?

He's just making sure that if the game is up for BTL he'll be coining it in as it crashes.

I've got to say it's going to be interesting to see how BTL tries to manage once rates start their return to something like normal.

Those BTLers on that thread concerning the WBBS seem to on the one hand claim that the increase is going to ruin them whilst stumping up over a grand to join his action against West Brom.

Edited by Blod

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Googled Mark Alexander BTL

Quite revealing.

Here's the families property website, run by his brother Alexander:

http://lettingagentsonline.co.uk/free-guide-to-finding-perfect-tenants/

'Discussing references and the potential for a full refund of their deposit is a big incentive for tenants to be as helpful as possible. Explain to your tenants that it is your aim to provide an excellent reference and refund the entire deposit and use this as an opportunity to tell them what they can do to help that to happen. For example, replacing light bulbs, carpet cleaning and professional cleaning are a classic examples of things they can do prior to checkout to ensure a full deposit refund and a good reference.'

There is no requirements to get the house clean. All comes under wear and tear.

'At this point you are in a good position to ask your tenants to allow you to show prospective tenants around before they move out. We recommend arranging block viewings. Give your tenants tips on what they can do to help, for example, if they are a bit untidy or the grass needs cutting etc. very subtly point that out. The discussion about references, a full refund of their deposit and what you will be doing to help them on moving day are all very powerful motivators.'

They can show a tenant round when you've left. If they ask than I would advise the tenant to charge - maybe 200 for viewing services.

'Always remember allow yourself at least a day or two to redecorate between tenancies.'

A day or two to redecorate? Really???

'Given that tenants buy on price, why not make your property slightly cheaper than others currently being advertised in the area? You can always put the rent up a bit after six months.'

They'll probably leave then. If there are a lot of rentals then you have to pitch your price under the rest and leave it there. Then the other LLs do the same, repeat + rinse.

There are very few, good private tenants.

You are selling a very expensive service to people who, in the main, do not have a lot cash.

That is not a good business to be in.

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