Mortgage Rescue Discussion Area

Former_MSE_Dan

This threads specifically for discussing the Mortgage Rescue benefit, available to homeowners struggling to repay the mortgage.

Read the Mortgage Rescue
section of the full Mortgage Arrears Help Guide

Click reply to discuss this.

If you want to discuss a different aspect of mortgage arrears help, jump to the Support for Mortgage Interest, Homeowner Mortgage Support Scheme, or General Mortgage Arrears Help threads.

Air-Wolf_2

Here are my notes made after attending a meeting of a West Midlands Local Authority on the governments MRS:-

The main point not mentioend in the front article is that there are regional caps on property values - the West Midlands is £145,000.

The main aims are:-

• prevent homelessness by preventing repossession
• assist 6000 families over a two year period in England and Wales
• It's a discretionary fund
• 2 main options
  • shared equity - equity loan to reduce mortgage payment or eradicate it
  • mortgage to rent - purchase and let back
• Partners to include
  • Lenders
  • Money Advice
  • LAs
  • RSL (Zone Agents)

There are six main steps to obtaining this support - they are not for the faint hearted!

1. Enquiry Stage. Provide initial assistance
2. Seek lenders position - has the lender exhausted all other hardship options with the customer?
3. Involve money advice - obtain and up to date financial assessment showing the homeowner can afford to stay in the property with MRS assistance
4. LA assessment - is the owner really the owner? What's the risk of homelessness? Area they eligible for assistance - are they a priority (family) is their any other outstanding charge or ownership dispute on the property, what is the owners income (£60,000 cap), what is the value of the property (£145,000 cap) is the property appropriate for future continued occupation (size/ overcrowding issues)?:
5. Go to lender - freeze any additional interest charges and all repossession proceedings for 3 months
6. Go to Zone Agent - gathers yet more evidence and assess them again!

Special requirements:-

• not for houses in negative equity
• not for owners earning more than £60,000
• not for houses costing more than £145,000

palflat

When you first approach you local authority they should contact your lender straight away to hold off any repossession action whilst they assess your eligibity for mortgage rescue. Amongst other things I manage a housing options team and there is a specialist mortgage rescue advisor there. We have helped many people with mortgage problems, including attending court to defend possession where it was clear the lender had not exhausted all the tools they have to help those in debt. In many cases in fact we refer people back to the lenders because they are too hasty to threaten posession without making the borrower aware of the help they can give. All council of mortgate lender members, who have lent about 98% of all mortages in the UK are signed up to offer assistance packages before they will take possession action.

The money/debt advice is part of the process because often people's outgoings can be reduced to a point where they are able to pay their mortgage. Anyone who watches 'it pays to watch' will understand how this is done.

The mortgage rescue scheme has received a bad press because so few rescues have been done, but in my experience this because people can get help before they get to the end of the process. That is what the process is for though, most people would prefer to keep owning thier property if possible.

heywood11

As one of the "lucky few" who has been rescued by the scheme, let me just say that it is not all it is cracked up to be.

Yes, you are saved from repossession and remain in your home, but the terms under which you remain are no better than being a tenant of a private landlord. In fact it is not much better than the private buy/rent back schemes in private operation.

The story: we heard about this scheme in Feb 2009 and applied. It took until December 2009 to complete. There were several surveys repeating previous ones and even other tests up until a few days before completion. They will seriously undervalue your house and no amount of comparable property details will shift this. You may on this basis find yourself still owing monies to your mortgage lender.

At this point, I hope your own experience is much better but I will tell you ours. Completion was arranged and we were contacted by the housing officer of the relevant housing association. We were signed up and only at that point did we find out what tenancy we were to be given. A 3 year assured shorthold tenancy!!!! As we had completed, essentially we had to sign it. I did ask what happened at the end of the 3 years and was told "it just carries on provided no terms of the tenancy had been breached". This may seem perfectly fine to most people. However, in the middle of the sale to them, I found out I had cancer, my husband already has MS. We made a decision to look at a mutual exchange of social housing properties back to my home town, so we could receive further and additional support from my extended family.

Having found the perfect mutual exchange, we have been told the following:

1. The tenancy states that a court order is required to allow the exchange to go ahead. This is blatantly different to other social tenants' rights.

2. Because the tenancy agreement stays with the property, any exchanger to my property will receive the balance of the tenancy agreement ie 2 years. This effectively makes it impossible for us to exchange. Most social tenants have assured tenancies. Who in their right mind is going to exchange to a 2 year assured shorthold tenancy, with no guarantee of continuance.

YOU HAVE BEEN WARNED. GET YOUR SOLICITOR TO FIND OUT WHAT TERMS OF TENANCY YOU WILL GET BEFORE CONTRACTUAL COMPLETION TAKES PLACE AND READ THOSE TERMS THOROUGHLY TO ENSURE YOU HAVE THE SAME RIGHTS AS OTHER SOCIAL TENANTS.

A POORLY THOUGHT OUT SCHEME IN ITS INFANCY MEANS WE ARE STUFFED IN EVERY DIRECTION AND NOW HAVE TO TAKE LEGAL ADVICE TO TRY TO RESOLVE THIS, AS WE ARE BOTH DISABLED, WE DONT NEED THE STRESS AND WORRY OF THIS.

Lastly, again after completion, we were then informed of a works schedule to include a complete rewire was needed. The HA refuse to pay for the redecorations required and will not rewire either the garage or conservatory. If we want that done, we have to pay for it. These two rooms house 2 freezers, a tumble dryer and a computer. Where do they go?

Angiepange

Hi there. I was interested to read your experience as I have just spent a year going through Mortgage Rescue (MTR option) with completion date set for next week. I am sorry to hear of your experience and understand your grievances completely. Although, unlike yourselves, we were given more information prior to completion about the tenancy, property exchange and repairs side of things. For my family I felt renting from a HA would be a better option than from a private landlord, it does work out cheaper for us. I have made a few comments on your post below. The link to my experience is in my signature below!

heywood11 wrote: »

As one of the "lucky few" who has been rescued by the scheme, let me just say that it is not all it is cracked up to be.

Yes, you are saved from repossession and remain in your home, but the terms under which you remain are no better than being a tenant of a private landlord. In fact it is not much better than the private buy/rent back schemes in private operation.

The story: we heard about this scheme in Feb 2009 and applied. It took until December 2009 to complete. There were several surveys repeating previous ones and even other tests up until a few days before completion. They will seriously undervalue your house and no amount of comparable property details will shift this. You may on this basis find yourself still owing monies to your mortgage lender. We only had one survey carried out by an independent valuer which we felt was a true reflection of the market value of the house. We also had an energy performance survey, gas and electrics tests and 2 builders in to assess repair work. Our house is in negative equity and we have successfully negotiated with the mortgage lender to write off the shortfall.

At this point, I hope your own experience is much better but I will tell you ours. Completion was arranged and we were contacted by the housing officer of the relevant housing association. We were signed up and only at that point did we find out what tenancy we were to be given. A 3 year assured shorthold tenancy!!!! As we had completed, essentially we had to sign it. I did ask what happened at the end of the 3 years and was told "it just carries on provided no terms of the tenancy had been breached". This may seem perfectly fine to most people. However, in the middle of the sale to them, I found out I had cancer, my husband already has MS. We made a decision to look at a mutual exchange of social housing properties back to my home town, so we could receive further and additional support from my extended family. I am so sorry you are going through this. We were told at the very beginning what type of tenancy it would be and were given information of terms and conditions. Also at the first meeting with our HA they went over the tenancy and discussed the fact that we would not be eligible for exchange. I think its terrible you had such little information prior to completion. We were also told we could pull out at any time right up to completion if we wanted.

Having found the perfect mutual exchange, we have been told the following:

1. The tenancy states that a court order is required to allow the exchange to go ahead. This is blatantly different to other social tenants' rights.

2. Because the tenancy agreement stays with the property, any exchanger to my property will receive the balance of the tenancy agreement ie 2 years. This effectively makes it impossible for us to exchange. Most social tenants have assured tenancies. Who in their right mind is going to exchange to a 2 year assured shorthold tenancy, with no guarantee of continuance.

YOU HAVE BEEN WARNED. GET YOUR SOLICITOR TO FIND OUT WHAT TERMS OF TENANCY YOU WILL GET BEFORE CONTRACTUAL COMPLETION TAKES PLACE AND READ THOSE TERMS THOROUGHLY TO ENSURE YOU HAVE THE SAME RIGHTS AS OTHER SOCIAL TENANTS.

A POORLY THOUGHT OUT SCHEME IN ITS INFANCY MEANS WE ARE STUFFED IN EVERY DIRECTION AND NOW HAVE TO TAKE LEGAL ADVICE TO TRY TO RESOLVE THIS, AS WE ARE BOTH DISABLED, WE DONT NEED THE STRESS AND WORRY OF THIS.


Lastly, again after completion, we were then informed of a works schedule to include a complete rewire was needed. The HA refuse to pay for the redecorations required and will not rewire either the garage or conservatory. If we want that done, we have to pay for it. These two rooms house 2 freezers, a tumble dryer and a computer. Where do they go?Again here,well before completion we have been told exactly what repairs are to take place to the property. They aim to complete building work within 6-8 weeks and bring the house up to the 'Decent Home Standards'

Mortgage Rescue for us has not been easy, in fact the whole process has been a nightmare from start to finish, with many hurldes to overcome. But for us, it was our best option and my advice would be to read up all you can on the scheme so you are fully aware of what you are getting into and if you decide to go ahead, be persistent and don't take no for an answer.

Best wishes Angie

heywood11

HI Angie

Im glad that your experience is a whole lot better than ours. It maybe that we were almost one of the first in the country to be accepted onto the scheme so they were refining the process.

As Ive posted elsewhere, Ive become involved in trying to move to a different part of the country for health reasons. The fact is this scheme does not give you the same rights as social tenants. The tenancy you get is more like private rented tenancies. Yes it is for 3 years, but the rights are not there. Having involved our local law centre in this, she agrees that the scheme is more designed to give people under financial pressure a breather for 3 years with the view that they can buy back their house in the future or buy something else.

Im curious what tenancy you have been given? It should be a 3yr Assured Shorthold Tenancy. My question and one which our local law centre is taking up with my housing association is what happens at the end of the 3 years. What tenancy is going to be given then? Are you going to be served with a s21 notice to quit? Where is the security in that if you are not going to be as secure as assured social tenants.

This whole thing is a minefield. Yes, it deals with the short term problem of threatened repossession but over the longer term, the scheme is very poor.

Good luck with your completion next week, Im truly pleased that you have been able to get a deal which suits you. The deal suited us at the time, but circumstances change and we are now stuck. Our only option is to apply to social landlords in the area we want and go onto the waiting list. As I want London, it could take years and I may not have that long.

Kind regards heywood

heywood11

UPDATE: I have just been informed by the authority which purchased our house under the Mortgage Rescue Scheme that at the end of the three year Assured Shorthold Tenancy that the tenancy becomes periodic (ie rolling). You are then a statutory periodic tenant and could find yourself out of your property within a very short time, ie 1 month after the previous month's rent date once the s21 notice has been served on you.

Angiepange

heywood11 wrote: »

UPDATE: I have just been informed by the authority which purchased our house under the Mortgage Rescue Scheme that at the end of the three year Assured Shorthold Tenancy that the tenancy becomes periodic (ie rolling). You are then a statutory periodic tenant and could find yourself out of your property within a very short time, ie 1 month after the previous month's rent date once the s21 notice has been served on you.

Thanks for the update heywood.

Angie

Hump

I've been involved in around 9 successful rescues in the past year and I agree the early rescues took 7-9 months. More recent rescues have taken substantially less time.

The process is not without pitfalls but with clients with 117% loan to value mortgages with massive arrears the prospect of staying in their homes without 'mortgage rescue' seems remote to impossible. I'm utterley convinced it has a role to play, especially for people in 'negative equity' - but it's never going to be for everyone.

The 3 year AST is an issue, especially as the 'private' sale and leaseback industry is now regulated and they have to give 5 year ASTs. The only plus points are that your landlord is a 'Registered Provider' (aka Housing Association) and given the recent European Court ruling in 'Kay' they can't just serve notice and evict you without having a reason and probably having given you the oportunity to challenge their decision through an internal appeals process (we can discuss endlessly whether this is fair) - they have to follow their own internal procedures before serving a s21 notice.

Secondly your rent is capped for the first 3 years at 80% of the market rental, a little cheaper than what is generally available if you had been repossessed and had to find an alternative.

Thirdly (and finally) your home will have been brought upto the decent homes standard within 6 months of the tenancy commencing - with the Registered Provider possibly having spent £20k to do it - something that is still relatively rare in the private sector.

Not perfect - but could be worse........

Angiepange

Kindly posted by the North East Derbyshire CAB on my Mortgage Rescue thread, a guide to Assured and Assured Shorthold Tenancies.

http://www.communities.gov.uk/documents/housing/pdf/138289.pdf

Hump

The TSA have a Tenancy Standard all Registered Providers must follow:

Tenure
Required outcomes
Registered providers shall offer and issue the most secure form of tenure compatible with the purpose of the housing and the sustainability of the community. They shall meet all applicable statutory and legal requirements in relation to the form and use of tenancy agreements.
Specific expectations
Registered providers shall publish clear and accessible policies which outline their approach to tenancy management. They shall develop and provide services that will support tenants to maintain their tenancy and prevent unnecessary evictions. The approach should set out how registered providers will make sure that the home continues to be occupied by the tenant they let the home to.

In my experience Registered Providers using ASTs all have an internal appeal process before acting upon their s21 notice