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EnglishinWales

NatWest tells BTLer to evict tenant on benefits or pay fine

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9 hours ago, stop_the_craziness said:

Brilliant!

I still see ads for rentals that say "No DHSS".    And that hasn't existed since 1988! 

Somehow "DWP" has never really caught on as a pejorative term.

That's because most landlords are either pensioners or boomers who don't know the difference!

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Top-slice basically means the bank will look at your income to see if you can make up the shortfall in the rent.

Reading the article it seems that a broker recommended this Natwest BTL mortgage that shouldn't have been offered / sold to this BTLer. The broker is fixing the issue by paying all fees involved in remortgaging the property.

Hence a lot of people have made assumptions here that are wrong:-

1) it is a BTL mortgage so Lord D'arcy Pew assumption that it wasn't a BTL mortgage is wrong.

2) Helena seems to have done things correctly by the book

3) Natwest seems to have done things correctly by their rules

4) Someone in the middle completely screwed up...

5) It's a complete non-story bar the fact that your should never trust what someone tells you, double check it yourself...

 

Edited by Houdini

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3 minutes ago, Houdini said:

Top-slice basically means the bank will look at your income to see if you can make up the shortfall in the rent.

Reading the article it seems that a broker recommended this Natwest BTL mortgage that shouldn't have been offered / sold to this BTLer. The broker is fixing the issue by paying all fees involved in remortgaging the property.

Hence a lot of people have made assumptions here that are wrong:-

1) it is a BTL mortgage so Lord D'arcy Pew assumption that it wasn't a BTL mortgage is wrong.

2) Helena seems to have done things correctly by the book

3) Natwest seems to have done things correctly by their rules

4) Someone in the middle completely screwed up...

 

Bingo!

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19 minutes ago, Houdini said:

Top-slice basically means the bank will look at your income to see if you can make up the shortfall in the rent.

Reading the article it seems that a broker recommended this Natwest BTL mortgage that shouldn't have been offered / sold to this BTLer. The broker is fixing the issue by paying all fees involved in remortgaging the property.

Hence a lot of people have made .

2) Helena seems to have done things correctly by the book

 

Except she didn't read the T&Cs

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6 minutes ago, Si1 said:

Except she didn't read the T&Cs

No she was paying a broker to do that for her - which given what the broker was charging makes perfect sense.

That's why I updated my post with point 5 - as you only learn that even professionals are often useless idiots from experience

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54 minutes ago, regprentice said:

The Nat West BTL Mortgage has the following lending criteria - http://www.intermediary.natwest.com/intermediary-solutions/lending-criteria.html then follow the link for BTL.

The terms include the following.

  • We will not consider multiple tenancies, Homes of Multiple Occupancy, bedsits, DSS tenants or 'Related Person' tenancies.
  • A minimum income of £25k pa is required (for joint applications at least one applicant must earn £25k).
  • Maximum LTV is 75% (for new build flats or houses a maximum LTV of 65% applies).

Interest Coverage Ratio (ICR): The ratio of the expected monthly rental income from the Buy to Let property to the monthly mortgage interest payment which takes into account likely future interest rate increases. The minimum ICR threshold is 135%.  We will top-slice if there is a rental shortfall, taking into account any free personal income the applicant may have. In all cases, expected rent must continue to meet a minimum rental cover calculation of 5.5% x 125%. 

The ICR is very important, i sincerely hope that the bank continues to be as aggressive in enforcing their terms as house prices continue to fall...it'll be a bloodbath for small landlords if/when there is a crash. no idea what 'top-slice' means... but it doesn't sound good.

Anecdotal - i used to work for RBS (Who own Natwest). about a year after the GFC i was speaking to a senior manager in Finance and he told me that it was unbelievable how many companies RBS had taken ownership of. If a company breached its covenants RBS would call in their loan and take ownership of the company, they would leave the managment/owners in their job but now RBS owned everything. He reckoned there were 100's if not 1000's of companies that RBS had done this to. It's probably a large part of the GRG scandal thats been in the press recently, though nothing i've read has sounded quite the same as the structure that this manager discussed with me, which made it soud like RBS was sitting on a load of 'zombie' companies it would eventually sell for a profit, as opposed to aggressively close down.. 

According to their induction course for new staff, just before the GFC RBS was the largest single owner of hotels and bars in the UK. If they wholesale foreclose on their BTL book they might end up the largest single owner of residential property in the UK.

What happens if a tenant loses their job and then gets housing benefit?

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4 minutes ago, iamnumerate said:

What happens if a tenant loses their job and then gets housing benefit?

I suspect you are keeping quiet or kicking them out on renewal were the information to become known....

Remember the only reason Natwest found out was when they investigated as the mortgage was being increased so you could do nothing provided you don't need to remortgage....

Edited by Houdini

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Just now, Houdini said:

I suspect you are kicking them out on renewal once the information is known....

Sounds a bit tough. Also if the tenant is a good risk (lets not discuss what is a good risk), why do it?

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3 minutes ago, Houdini said:

I suspect you are keeping quiet or kicking them out on renewal were the information to become known....

Remember the only reason Natwest found out was when they investigated as the mortgage was being increased so you could do nothing provided you don't need to remortgage....

Oh dear. Debt junkie indeed.

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14 hours ago, EnglishinWales said:

https://www.mortgagesolutions.co.uk/news/2018/10/10/natwest-tells-landlord-evict-tenant-benefits-pay-2-5k-ercs/

Not sure if this has already been posted but I thought I'd add it. Not heard of a case like this, most landlords would just evict in my experience...

Spare us the crocodile tears. Irrespective of the broker's statements... her solicitor should have made that patently clear during the conveyancing process. Further, she could have at any time contacted her bank for clarity.
 

 

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1 hour ago, cashinmattress said:

Spare us the crocodile tears. Irrespective of the broker's statements... her solicitor should have made that patently clear during the conveyancing process. Further, she could have at any time contacted her bank for clarity.
 

 

I do love the number of posters who haven't read the article. 

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12 hours ago, elephant said:

 

 

Does someone want to tell this state backed bank that the “Department of Social Security” has not existed since 2001 :D 

It does in northern Ireland 

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3 hours ago, Houdini said:

2) Helena seems to have done things correctly by the book

Ok, the broker is/was a scumbag.... however; ignorantia juris non excusat <- that's why we pay for solicitors!!!!

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14 hours ago, skrillex said:

Presumably the house is a dump and she'd struggle to rent it to non HB tenants.

and the evidence is???

 

5 hours ago, thewig said:

IS this article just a paid advertisement attempting to humanise DEBTjunkie scumbags?

no it is just a news item

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Quote

 

The marketing innovation manager remortgaged to NatWest in January through broker Habito, providing information about her tenant’s situation to the digital adviser.

But when she approached NatWest about taking money out of the property to buy in London in September, the lender said it had not been disclosed that the tenant was in receipt of government support.

 

Well, that escalated quickly. Remortgage in January, extend mortgage in September. Old school BTL'ing

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7 hours ago, elephant said:

Why?

Deleted.

Looks like she did have a BTL mortgage. But it is the increased risk that needs to be taken into account by the lender.

Higher risk of tenant not paying would push up the interest payments/fees for the landlord.

Default by the landlord would hit the bank.  Think of it a little like car insurance, more risk more to pay.

Edited by Lord D'arcy Pew

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I suspect the banks do not want benefit tenants in BTLs because they don't want to end up the defacto landlord to the needy and families if the shit hits the fan.

Booting younger working people out on the street to find another property or camp in a parental bedroom is one thing, thousands of "vulnerable" families out on their ears at the banks behest is another.

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14 minutes ago, disenfranchised said:

I suspect the banks do not want benefit tenants in BTLs because they don't want to end up the defacto landlord to the needy and families if the shit hits the fan.

Booting younger working people out on the street to find another property or camp in a parental bedroom is one thing, thousands of "vulnerable" families out on their ears at the banks behest is another.

In 2008 the banks were bailed out by the tax payer. The fraudsters were gifted new laundered money indirectly through QE. Passing the bill to our children and grandchildren.

Next time around the banks will have to take responsibility for their own criminality and those of their customers.   I expect to see some brutal behaviour to cover their own arses.

Edited by Lord D'arcy Pew

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30 minutes ago, Lord D'arcy Pew said:

Deleted.

Looks like she did have a BTL mortgage. But it is the increased risk that needs to be taken into account by the lender.

Higher risk of tenant not paying would push up the interest payments/fees for the landlord.

Default by the landlord would hit the bank.  Think of it a little like car insurance, more risk more to pay.

Higher risk of the tenant trashing the place and reducing the value of the loan security.

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42 minutes ago, elephant said:

Are you sure about that?  The only reference I can find to DSS in NI is Digital Shared Services which doesn’t seem to have anything to do with benefits...

https://www.finance-ni.gov.uk/articles/dss-policy-and-strategy

It's DHSS. Officially DHSSPS. 

https://www.gov.uk/government/organisations/department-of-health-social-services-and-public-safety

 

 

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