Sunday, August 26, 2012

The value of your investment…

'I lost seven properties': Cut-price repossession sales 'are cheating the taxpayer'

The sorry tale of a retired policeman-turned-landlord Keith Young had seven properties in the Newcastle upon Tyne area repossessed and sold by his lender during 2011. He thinks they were worth more than they were sold for and says the taxpayer is losing out [by which I think he means he's been left with a bigger debt than he envisaged] but then he probably believed the hype that property prices can only go up.

Posted by stuartking @ 02:44 AM (2074 views)
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7 thoughts on “The value of your investment…

  • He means the taxpayer is losing out because:

    1. The building soc (Mort Express / B&B) has sold them (presumably through Auction) for less than they “are worth”. [actually if they were sold privately he may have a point but at Auction? hmmm.

    2. Mort Express has lost out by not getting the money to pay off the mortgage.

    3, Therefore since B&B s mortgages were “sold” to the taxpayer (in effect) the taxpayer is light.

    4. He shouldnt worry too much as B&B can get the money off him, but he is challenging the AMOUNT of money.

    As i said yesterday :

    “Sure some are BTLrs for which i have no sympathy. Any business involves risks and if you dont realise / assess the risks or if the investment doesn’t pay off then thats a risk that they should have been aware of and tried to minimise. ”

    Surely one of the risks is that you wont be able to keep up with payments, get repossessed and then find that the lender will sell the properties on the cheap (to quickly crystalise their loss). If its at auction i cant see he has a leg to stand on. If its to an estate agent who pushes it through to a specific client then he may have a case.

    Very nice of him to worry about us poor taxpayers- must keep him awake at night.

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  • Perhaps when he said they were cheating “the” taxpayer he meant only one taxpayer – namely, himself.

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  • mark wadsworth says:

    Glorious.

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  • The following from UKARs latest interims:-

    “In seeking to support customers through periods of financial difficulty, we actively work with a range of non fee-charging debt advice agencies to help customers reorganise their finances and have made 2,437 referrals in the first half year.

    In some circumstances, however, the most appropriate course of action is for customers to sell their homes and we support this process, where suitable, through assisted voluntary sales.

    Repossession proceedings for customers in arrears are always viewed as a last resort but regrettably, in some situations, this is inevitable. During the first half, the number of properties taken into possession reduced by 15% to 3,871 (H1 2011: 4,567). The stock of properties in possession decreased from 2,705 at 31 December 2011 to 2,475 (H1 2011: 3,075).”

    Link: http://www.ukar.co.uk/media-centre/press-releases/2012/27-07-2012?page=1&nextprev=1

    I think Mr Young was one of the regrettably inevitable.

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  • general congreve says:

    The comments are priceless. Wondering how many are from HPCers? Pretty sure many aren’t though and reflect a properly disgruntled public. Not the first time I’ve seen some greedy incompetent [email protected] go in the DM looking for sympathy and then get a public roasting. Very odd, these people really are asking for it.

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  • This guy is a joke. Public sect worker, BTL, retired at 50, living off rents, text book example of what’s wrong with this country.

    Repossessed assets ALWAYS sell for a discount. Repossessed cars, antiques, furnitures, boats and etc. Who would buy a repossessed asset at market value? I mean who? WHO? HELLO? Are you sane? No, didn’t think so!

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  • Pete the question is how MUCH of a discount? If there is transparency and the properties are put out for auction then thats one thing (ex the fees) but if they all go via an estate agent who feeds them to (for example) other BTLrs but at a MUCH reduced rate then he has a point. In fact that would surely just re-perpatrate the cycle.

    The article itself quotes “a recent dispute where a borrower claimed a repossessed property had been sold to one buyer, even though a higher offer had been received from another.

    The FOS investigated and concluded: ‘We took the view that the lender had failed to obtain the best purchase price reasonably available, and we told the lender to pay the difference between the highest offer that had been made and the final sale price.’
    Leading consumer lawyer Daniella Lipszyc of Ultimate Law in Altrincham, Cheshire, says: ‘The legal position is that lenders should act in borrowers’ interests in obtaining the best possible price. In practice, lenders don’t care – they want the property off their books and will take anything. But it’s very hard to prove under-selling. There’s very little borrowers can do.’

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