Friday, February 3, 2012

FSA notch a noteworthy success to protect people from themselves.

'Sale and rent back' sector closed down by FSA

I remember these 'sell and rent back' schemes were big in the immediate aftermath of the 07/09 crash. Distressed homeowners unable to meet their mortgage repayments would sell their homes to these firms, obviously BMV, and rent it back to them. Of course the danger was no security of tenure or guarantee that these companies wouldn't rachet-up the rent after a year. So, fair play to the FSA for kicking this lot in to touch, although of course these sharks are simply symptoms of the problem.

Posted by sibley's b'stard child @ 03:43 PM (2186 views)
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15 thoughts on “FSA notch a noteworthy success to protect people from themselves.

  • so now rather than sell to rent back they now have to ……….. answers on a postcard or phone 09090909090909 rates £500 per min

    A) get repossessed

    b) go on a holiday

    c) borrow more money on storecard

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  • Looks good to me.

    Those who can’t afford to own the house will be forced to sell to someone who can afford it.

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  • So the Sale And Rent Back sector has had a good five year run before the FSA (which stands for “F**king Sleeping Again”) caught onto them.

    Goodness knows, in a few years time, the FSA – might catch onto the scam that is the car insurance industry and even liar loans.

    Smart chaps those FSA chaps – sharp as buttons.

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  • So the Sale And Rent Back sector has had a good five year run before the FSA (which stands for “F**king Sleeping Again”) caught onto them.

    Goodness knows, in a few years time, the FSA – might catch onto the scam that is the car insurance industry and even liar loans.

    Smart chaps those FSA chaps – sharp as buttons.

    Reply
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  • mark wadsworth says:

    “Sharp as buttons”, nice one, I read in the FT today some Yank referred to somethings as “a drop in the bucket”.

    My motto is “When changing horses, don’t mix metaphors midstream”.

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  • I could have said “bright as a knife” but it doesn’t quite deliver as well as “sharp as a button”.

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  • mark wadsworth says:

    I’d have thought that the flipside to “Sharp as buttons” was “Bright as a tack” but maybe I’m just old fashioned. I even say “rooves” not “roofs” 🙁

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  • sibley's b'stard child says:

    In fairness Paul, the timeline given in the article is reasonable to me; OFT does initial investigation in 2008, FSA takeover in 2009, FSA bring in curtailing proposals in 2010.

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  • Nausicaa Delfras of the FSA said

    The…..closure of this market could have been avoided if sale and rent back firms had taken the time to fully understand their regulatory responsibilities and customers’ needs.”

    “It seems most were more focussed on their own commercial success rather than the welfare of the customers, with one firm even resorting to fraud.”

    She obviously lives in la-la land, like her namesake in the Odyssey. These are spivs, FFS.

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  • Nausicaa Delfras of the FSA said

    “The resulting….closure of this market could have been avoided if sale and rent back firms had taken the time to fully understand their regulatory responsibilities and customers’ needs.

    “It seems most were more focussed on their own commercial success rather than the welfare of the customers, with one firm even resorting to fraud.”

    She obviously lives in la-la land, like her namesake in the Odyssey. These are spivs, FFS.

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  • Hilarious! “A lender alleging that one firm was committing fraud by arranging transactions as buy-to-let mortgages, with the rogue firm purchasing properties at below market value before inflating the purchase price to defraud the lender.” Tip of iceberg.

    So, this is why BTL mortgage flourished? Through fraud? Who would have thought!?

    Hmm, the sweet irony is that all those bankers, BTL, mortgage brokers, EAs and surveyors used to be like good pals, they dined together, played golf together, kids probably even went to the same school – until they found out they are actually just a bunch of incestuous backstabbing bxstxrds and once time gets tough, they just started backstabing each other.

    You know why UK property market won’t recover? Well, you have all the key players basically assume that every other bxstxrd out there is, well, lying. Bankers assume surveyors lying about valuation, mortgage brokers assume BTLs lying about their income, BTL assume banks lying about credit availability, EA assume surveyors are actually threatened by the bank to undervalue.

    Great fun to watch.

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  • So British. It’s a wonder that the word ‘corruption’ hasn’t yet been struck from Chambers!

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  • Every so often a new financial scam emerges, and all the shysters (in this case, a thousand companies) jump on board in a matter of months.

    Yet it takes the government five years to put a stop to it

    – Not good enough..

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  • 10. peter_2008 said…
    Hilarious! “A lender alleging that one firm was committing fraud by arranging transactions as buy-to-let mortgages, with the rogue firm purchasing properties at below market value before inflating the purchase price to defraud the lender.” Tip of iceberg.

    ‘One rogue firm’, – don’t make me laugh……and the lenders didn’t want to know as they were too busy dancing while the music still played. Who cares when you can slice em, dice em and sell em on!

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  • A variation on this scam is when homeowners in difficulties (but with equity in their property) are targeted by lenders/brokers who arrange a ‘bridging loan’ at a modest rate ‘until a mortgage is arranged in due course’.

    When in, due course, the ‘bridging loan’ term runs out, the borrower finds they are unable to re-mortgage due to all the tighter new lending rules. At this point, the interest rate goes through the roof and various ‘default fees’ are added to the loan. All this is simply rolled up and left running until the lender decides they are running out of equity, at which point they foreclose and cash in.

    I can assure you, it’s happening now.

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