Warning: Sale and Rent back schemes

Doozergirl · 20 February 2008 at 11:26PM

Can we have a sticky about this on the House Buying etc board please? We're asked several times a week about these schemes.

homer_j_3 · 21 February 2008 at 12:16AM

no - go away.. Only joking.

I believe this topic is more suited to the House selling board too..

toonfish · 21 February 2008 at 11:23AM

chunkylegs wrote: »

Do you seriously believe that people have not already tried that my financial life fell apart 9 months ago and the bottom line is there is nothing you can do about it until it bottoms out. I was stupid but I am not stupid and believe me I have found myself in a situation I can not fathom. I earn over £40.000 a year and the powers that be are desperate to see me go to the wall.

if there is 25% equity in your propoerty I would be very surprised if it can't be sorted out without selling way under value, and I've seen some pretty desperate situations. Unfortunately these "property angels" that come to save you would rather you didn't know about the alternatives - all they want is a cheap house.

RepossessionAngels · 21 February 2008 at 5:34PM

Sorry Toonfish, I would have to disagree. The company I represent, Repossession Angels, is keen to build long-term relationships with its clients and we would not be doing ourselves any favours if we didnt explore all the options available to our clients before proceeding with a sell and rent back transaction.

The main options that are usually explored include re-mortgaging; swapping from repayment to interest only; a payment holiday; extension of the term; an estate/auction agent sale; help from friends/family. We ask whether the person(s) has explored them all (and will assist our clients in finding out) before we proceed to even discuss the possibility of sell and rent back. The unfortunate reality is that the majority of people that are facing repossession are those who have taken sub-prime loans and initial lower fixed rates which are hiked up after 2-5 years to a totally unaffordable rate, at which point the mortgage companies would point to the small print. We have found that they are, more often than not, unwilling to compromise.

Having been recently communicating with the FSA and Office of Fair Trading, regulation of the industry is inevitable and we, along with must Sell and Rent Back Property Investors I have met, are welcoming it. We run credit, bankruptcy and CRB checks against anyone who wants to join the organisation as well as ensuring that the investor has sufficient capital backing should things go wrong (such as tenants defaulting, damages). We also offer separate long-term rental agreements (with compensation to the tenant should the SARB landlord breach the terms).

toonfish · 21 February 2008 at 5:53PM

RepossessionAngels wrote: »

Sorry Toonfish, I would have to disagree. The company I represent, Repossession Angels, is keen to build long-term relationships with its clients and we would not be doing ourselves any favours if we didnt explore all the options available to our clients before proceeding with a sell and rent back transaction.

The main options that are usually explored include re-mortgaging; swapping from repayment to interest only; a payment holiday; extension of the term; an estate/auction agent sale; help from friends/family. We ask whether the person(s) has explored them all (and will assist our clients in finding out) before we proceed to even discuss the possibility of sell and rent back. The unfortunate reality is that the majority of people that are facing repossession are those who have taken sub-prime loans and initial lower fixed rates which are hiked up after 2-5 years to a totally unaffordable rate, at which point the mortgage companies would point to the small print. We have found that they are, more often than not, unwilling to compromise.

Having been recently communicating with the FSA and Office of Fair Trading, regulation of the industry is inevitable and we, along with must Sell and Rent Back Property Investors I have met, are welcoming it. We run credit, bankruptcy and CRB checks against anyone who wants to join the organisation as well as ensuring that the investor has sufficient capital backing should things go wrong (such as tenants defaulting, damages). We also offer separate long-term rental agreements (with compensation to the tenant should the SARB landlord breach the terms).

you may be an exeption, but the number of websites selling qualified leads to contact distressed sellers would suggest my experience is not unusual.

payless · 21 February 2008 at 5:57PM

RA..
The company I represent, ...., is keen to build long-term relationships with its clients and we would not be doing ourselves any favours if we didnt explore all the options available to our clients before proceeding with a sell and rent back transaction.

The main options that are usually explored include re-mortgaging; swapping from repayment to interest only; a payment holiday; extension of the term; an estate/auction agent sale; help from friends/family.

can't see these mentioned on your website

dunstonh · 21 February 2008 at 6:35PM

With the FSA looking at introducing a minimum of £50k in the bank (and having assets exceeding liabilities) for firms directly regulated by them, I wonder how many of these companies could afford that?

RepossessionAngels · 21 February 2008 at 7:33PM

payless wrote: »

can't see these mentioned on your website

Very true, but if you would like me forward a copy of the literature we give to each person that expresses an interest in our service - I would be more than happy to do so...

RepossessionAngels · 21 February 2008 at 7:41PM

toonfish wrote: »

you may be an exeption, but the number of websites selling qualified leads to contact distressed sellers would suggest my experience is not unusual.

I agree, the barriers to entry into the sell and rent back industry are very low - which is why certain parameters need to be set with the rent-back tenants' interest being central, whilst also thinking of the landlords risks.

silvercar · 21 February 2008 at 9:05PM

RepossessionAngels wrote:

We run credit, bankruptcy and CRB checks against anyone who wants to join the organisation as well as ensuring that the investor has sufficient capital backing should things go wrong (such as tenants defaulting, damages). We also offer separate long-term rental agreements (with compensation to the tenant should the SARB landlord breach the terms).

Credit and bankruptcy checks are pretty pointless, most SARB operators want to remortgage properties regularly so they obviously have good credit rating. What is CRB going to tell you, that they haven't abused children in the past?

Can you explain how long term rental agreements ties in with mortgage lenders demanding a maximum 12 month AST. Most SARB want no money down deals or limited deposits, so would be bound by lenders requirements for ASTs, how can you offer tenants rental agreements in breach of mortgage terms and conditions?

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Warning: Sale and Rent back schemes

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