Ukar Portfolio Landlord Disposals

[Neverwhere]

This thought crossed my mind a while back, it may play a part but doubt its the reason especially if the T&C`s allows UKAR to call in a mortgage at the drop of a hat, as i have been lead to believe

They could quite easily have said the whole lot has to be wound up by such a date you have X amount of months to settle your account or we will repossess job done,would have thought this would have rocked the political boat far less than the new tax legislation

The reason for the tax is more political than it`s fiscal there`s simply way too many priced out that will be blaming the government which wil have been in power for a decade come the next election,this is not a good scenario if they are hoping for a third term

I agree that UKAR's buy-to-let mortgage book would have been more of a tangential consideration than anything else. The central reasoning for the tax changes are almost certainly political - as you say - and economic, given the Bank of England have been flagging the sector as a potential risk to financial stability for some time now. It's just interesting to see that the potential interplay between the impacts of the Budget and UKAR's ability to close down its book is already on the radar of at least some of the buy-to-let crowd.

[bobbo]

There are also growing calls to disallow any tax deduction for all interest payments due to misallocation of capital and tax avoidance (already partly initiated). This move will significantly reduce the impact should such a change be implemented.

[long time lurking]

I agree that UKAR's buy-to-let mortgage book would have been more of a tangential consideration than anything else. The central reasoning for the tax changes are almost certainly political - as you say - and economic, given the Bank of England have been flagging the sector as a potential risk to financial stability for some time now. It's just interesting to see that the potential interplay between the impacts of the Budget and UKAR's ability to close down its book is already on the radar of at least some of the buy-to-let crowd.

At least thats a step forward from Dave's mates wants all our house at a knockdown price

In a twisted way there maybe some truth in that

[pipllman]

We have already seen, with the RBS share sale, that the government is quite happy to lose money to get this sort of stuff of its hands.

Maybe the most recalcitrant customers of UKAR - the ones that really don't take the hint to go - will be sold on to some real debt collectors!

[dgul]

There are also growing calls to disallow any tax deduction for all interest payments due to misallocation of capital and tax avoidance (already partly initiated). This move will significantly reduce the impact should such a change be implemented.

Where'd you hear that?

[justthisbloke]

HPC probably!

[bobbo]

It's been in the economist recently, can't be bothered finding links, and HPC.

[bobbo]

Also, If you remember announcements by Cameron following all that amazon hooha where interest deductions to related parties in low tax jurisdictions were to be disallowed. Not sure what came off that.

[Neverwhere]

We have already seen, with the RBS share sale, that the government is quite happy to lose money to get this sort of stuff of its hands.

Maybe the most recalcitrant customers of UKAR - the ones that really don't take the hint to go - will be sold on to some real debt collectors!

They've sold some of it off already but I suspect the other way around, with private firms picking out the best performing mortgages:

UK 'zombie' bank sells 2.7 billion pounds of loans to JP Morgan group

State-owned UK Asset Resolution (UKAR), the holding company for Bradford & Bingley and Northern Rock Asset Management, said it sold the portfolio of about 27,000 performing mortgages to Commercial First, a consortium led by U.S. bank JP Morgan (JPM.N).

. . .

JPMorgan said it will syndicate the portfolio as residential mortgage-backed securities (RMBS) to a group of investors.

The thing about the most aggressively leveraged landlords that are likely also the most recalcitrant customers, on the BTL side of things, is that there's probably not enough meat there for a debt company to want to pick over it. This may also be why UKAR have not simply called these loans by issuing thirty days termination notice (fairly standard clauses for BTL, as I understand it) . Even though they can take some losses their remit is to recover as much of the taxpayer's money as possible, so they may be walking a fine line between closing down their book and forcing bankruptcies.

[jammin35]

Good thread this.

WRT tenants rights in these circumstances, here is the link you need:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/5933/1729687.pdf

In a nutshell, tenants get quite a lot of protection. The interesting thing is, the exact position of the lender, wrt a tenant, isn't known until a court case.

In 20 years of renting, I've never known anyone lose their home through a mortgagee repossession. It obviously does happen, but it's a sufficiently rare event for judges to be unfamiliar with the process and treading slowly and lightly. They are not, after all, in the business of making innocent tenants homeless.

Thus, in the case of mass repossessions, the lenders are navigating without a map. They won't even always know on what terms tenancies have been granted. Bankrupt landlords won't be helping them. Repossessing properties and disposing of them will be a very expensive and time-consuming business. Which is why I think LTVs of 75% will leave the lenders nursing a loss in many cases.

Hmmmm.....

"Hello Mr UKAR, my name is James and i rent a property for which you are the mortgagee in possession"

"How can we help?"

"I would like to offer you 76% of the market value"

[pipllman]

Hmmmm.....

"Hello Mr UKAR, my name is James and i rent a property for which you are the mortgagee in possession"

"How can we help?"

"I would like to offer you 76% of the market value"

76 is very generous as an opening offer!

[long time lurking]

They've sold some of it off already but I suspect the other way around, with private firms picking out the best performing mortgages:

The thing about the most aggressively leveraged landlords that are likely also the most recalcitrant customers, on the BTL side of things, is that there's probably not enough meat there for a debt company to want to pick over it. This may also be why UKAR have not simply called these loans by issuing thirty days termination notice (fairly standard clauses for BTL, as I understand it) . Even though they can take some losses their remit is to recover as much of the taxpayer's money as possible, so they may be walking a fine line between closing down their book and forcing bankruptcies.

Well at some point even the ones in negative equity at the beginning of UKAR inception will show a break even number on UKAR books providing the borrower has kept up with the payments ,one has to remember UKAR are only looking at breaking even opposed to MEX who were expecting a 80-100% margin over the full term of the loan

4-5 years of repayments could go a long way in covering any negative equity

[mrtickle]

We have already seen, with the RBS share sale, that the government is quite happy to lose money to get this sort of stuff of its hands.

Maybe the most recalcitrant customers of UKAR - the ones that really don't take the hint to go - will be sold on to some real debt collectors!

I'm reminded of Mark Alexander boasting that when UKAR phone him for a consultation, his plan is to make an excuse, end the call, and then block their number so they can't call him again.

It follows therefore that he will soon find himself dealing with those debt collectors. Maybe he'll be invited to consult with them?

[Venger]

I'm reminded of Mark Alexander boasting that when UKAR phone him for a consultation, his plan is to make an excuse, end the call, and then block their number so they can't call him again.

It follows therefore that he will soon find himself dealing with those debt collectors. Maybe he'll be invited to consult with them?

I've been trying to find that post for some time. Just found it after a hint to the location from another hpcer.

And great HPC reply by littlefish

Rob 25/07/2015 at 11:58

Received a letter today from Ukar saying I now have a relationship manager and he is going to contact me to make an appointment in order to see if he can help me! I have 2 btl with MX and they are not in arrears and currently sit at about 70% Ltv I’m thinking under no circumstances should I talk to this person what do you think?

Mark Alexander 25/07/2015 at 12:07

Reply to the comment left by “Rob ” at “25/07/2015 – 11:58“:

I’ve received the same letter.

I will explain that I’m too busy to chat when I receive the first call, then block the number and see what happens after that.

----------------------

back at HPC...

Nice article! "We’ve got 1,500 people who are good at the jobs they do - helping customers in distress." From what I'd read on Property118, they don't see it as "help" rather tricking people into situations where they have to pay off their mortgage! Such as Mark Alexander's brilliant tactic which he announced recently of blocking their number and refusing the answer the telephone when they call him.

I can only imagine how he would deal with a tenant who just decided to ignore him. Obviously he doesn't understand that he is only renting the house of the lender.

[Venger]

spyguy I suggest you edit #90.

It's past the limit of what is allowed - imo, or at least I don't feel comfortable with it.

Rules I try and stick by.

Some advice for Bulletin Board posters

# Is this a libellous comment: "Scoot sounds like a rotten place to work". It makes the right thinking person think less of the company after reading it. But is it actionable? I am expressing an opinion, a value judgement, which is not subject to the law.

# This is possibly libellous comment: "Drew Cullen is a rotten apple". This is actionable - it is saying that I am corrupt. As a company director with a fiduciary duty of care to my shareholders, such a claim would materially impugn my reputation.

# Truth is a cast-iron defence against libel actions. But is it not enough to be telling the truth - you have to be able to prove you are telling the truth. And that can be hard.

# Think carefully before you make damaging statements about a person or company, especially if you are in possession of inside information. Would you make those statements if your name was published? If not, resist the temptation. The Internet creates the ultimate audit trail, and ISPs and Web sites will co-operate with investigators, if told to by the courts.

Edited September 4, 2015 by Venger

[mrtickle]

I've been trying to find that post for some time. Just found it after a hint to the location from another hpcer.

And great HPC reply by littlefish

----------------------

back at HPC...

And, that was 6 weeks ago.

Surely they've written him another letter by now...

[Neverwhere]

Well at some point even the ones in negative equity at the beginning of UKAR inception will show a break even number on UKAR books providing the borrower has kept up with the payments ,one has to remember UKAR are only looking at breaking even opposed to MEX who were expecting a 80-100% margin over the full term of the loan

4-5 years of repayments could go a long way in covering any negative equity

I think that's probably highly dependent on where the properties are located. It may be true for part of UKAR's book, certainly anything in the major metropolitan areas, but there are lots of places around the UK that haven't returned to, or seen any growth on, 2007 prices. As they're still far in excess of reasonable multiples of local wages negative equity may be more likely to deepen than anything else. Also, no repayments for any of the interest only borrowers and some of the original deals were so mental, in terms of the differential from base rate, that they may be costing UKAR money to fund rather than turning a bankable profit.

[Neverwhere]

spyguy I suggest you edit #90.

It's past the limit of what is allowed - imo, or at least I don't feel comfortable with it.

Rules I try and stick by.

Some advice for Bulletin Board posters

# Is this a libellous comment: "Scoot sounds like a rotten place to work". It makes the right thinking person think less of the company after reading it. But is it actionable? I am expressing an opinion, a value judgement, which is not subject to the law.

# This is possibly libellous comment: "Drew Cullen is a rotten apple". This is actionable - it is saying that I am corrupt. As a company director with a fiduciary duty of care to my shareholders, such a claim would materially impugn my reputation.

# Truth is a cast-iron defence against libel actions. But is it not enough to be telling the truth - you have to be able to prove you are telling the truth. And that can be hard.

# Think carefully before you make damaging statements about a person or company, especially if you are in possession of inside information. Would you make those statements if your name was published? If not, resist the temptation. The Internet creates the ultimate audit trail, and ISPs and Web sites will co-operate with investigators, if told to by the courts.

I think that's very sensible advice Venger.

[Si1]

If, for example, Mark Alexander refuses to cooperate with UKAR (by not answering their phone calls for example) after they have made reasonable attempts, surely their final option, given no verbal negotiating position had been permitted, is to enter hard legal proceedings, such as demanding money to be paid down to reduce their exposure to him, and then repossess?

Edited September 6, 2015 by Si1

[long time lurking]

If, for example, Mark Alexander refuses to cooperate with UKAR (by not answering their phone calls for example) after they have made reasonable attempts, surely their final option, given no verbal negotiating position had been permitted, is to enter hard legal proceedings, such as demanding money to be paid down to reduce their exposure to him, and then repossess?

I think some like to be seen as de`man ,but i suspect it was yes sir no sir three bags full sir

Edited September 6, 2015 by long time lurking

[spyguy]

spyguy I suggest you edit #90.

It's past the limit of what is allowed - imo, or at least I don't feel comfortable with it.

Rules I try and stick by.

I cannot remember what it was about. It's been pulled.

Apologies to anyone upset or whatever.

[Si1]

I think some like to be seen as de`man ,but i suspect it was yes sir no sir three bags full sir

indeed, I suspect that was a naive question on my part!

[Guest_growlers_*]

Woops

Edited September 10, 2015 by growlers

[Simon Taylor]

Interesting quote from Lisa Orme in an otherwise sensible post:

So what does this mean?

Well it means it has an end; I strongly suspect that when the loan book is sufficiently repaid we will see a softening of this tax. They will do enough but not too much.

It maybe that wishful thinking what helps them sleep at night but history tells us that when a government gets it's hands on a new tax cashflow, it is unlikely to hand it back. Income tax, you will recall, was a temporary measure to help fund the nation's addiction to war with France.

I think she is also missing the politics here. Osborne is an astutely political chancellor and understands the electoral consequences of a maturing cohort who feel that the housing market is turning them over. This tax change is just the beginning. Leveraged BTL is in the death throes.

[Neverwhere]

Interesting quote from Lisa Orme in an otherwise sensible post:

So what does this mean?

Well it means it has an end; I strongly suspect that when the loan book is sufficiently repaid we will see a softening of this tax. They will do enough but not too much.

It maybe that wishful thinking what helps them sleep at night but history tells us that when a government gets it's hands on a new tax cashflow, it is unlikely to hand it back. Income tax, you will recall, was a temporary measure to help fund the nation's addiction to war with France.

I think she is also missing the politics here. Osborne is an astutely political chancellor and understands the electoral consequences of a maturing cohort who feel that the housing market is turning them over. This tax change is just the beginning. Leveraged BTL is in the death throes.

Absolutely. The financial stability considerations as set out by the BoE have to be taken into account as well. Any impact on UKAR is a sideshow IMO, although it may not appear that way from the perspective of aggressively leveraged landlords who have mortgages with them.