The TMB, Challenor Investments and a Mis-sold Mortgage

Dan_1976

OK, Cashpig, lets drop the insults.

A good mortgage broker would have been involved in what you have done. OK you may havebeen done, but you have to admit you were blinded by cash and were probably sold to.

You have basically been involved in, knowingly or not, a dodgy deal between lenders and property developers that 100% needs property prices to increase to work. You got a 100% mortgage on a buy to let on dodgy rental valuations. You signed up for it, false docs or not. If you were that savvy then you failed yourself. If your an amatuer then I feel for you as you will lose money.

I know of a friends client who knows what he is doing, he has brought10-15 properties like this, he was not intending to commit frued but was sold a 100% buy to let with dodgy rent values!

Business is tough, I hope your wallet is not completly ruined!

Cashpig74

Tiddler - I do not understand. if you say I was duped because I was buying a flat "worth" 180,000 for 150,000 and the market turned and im looking for some else to blame, then thats not the case. Challenor are fraudsters and thats the crux of it. It was bought at a discount but I didnt get the discount as it was meant to be. Thats the con. I do not blame the bank as such - because I do not have all the facts YET.

Besides, this business of remortgaging at current value business, I did not own the flat prior to this - it was an outright purchase DRESSED up to be a remortgage.

The vendor (builders) offered a their "market value" flat of 180,000 to me to buy for 150,000. They discoutned the price by 17% so I buy their flat for less moeny. This is supposed to be my incentive.

Their paperwork which I got my hands on today, claims that the purchase price was 180,000 and with the discount leaves a balance due of 150,000. I ended up with a mortgage of 150,000 cos the paperwork gets mudded along the way to make it look like im PAYING 180,000 but the builder is putting up £30,000 gifted for me. He's not - he's just reduced an already over inflated price. So I did NOT recieve a discount, EVEN though the entire operation was set up to look like I was getting a good deal (as thats the whole point of an investment). This is where "they" have all won. Builders did sell for a discount but not to me - it was all done prior to me even knowing them probably.

Let's face it, the fraud squad wouldn't on the case if it was all kosha.

The banks received dodgy paperwork - not their fault admittedly - but then they did not do sufficient checks either, otherwise they would have seen the disprepancies in the builders statements.

Solicitors were acting for BOTH parties at the same time it turns out, AND they were later asking me to sign bridging loan paperwork 6 MONTHS later and return them UNDATED and WITNESSED UNDATED. !!!!!!??!

The flats were clearly "bought" somehow by Challenor for a discount off the builder and some dodgy deal was struck - INFLATED the price to 180,000 and "sold" them to us lot for this magical "get a 17% less than market price" deal.

When in fact - IF I got this discount from 180,000 THEN the PURCHASE price should have been 150,000 (17% less) as that is what the maths works out to be. SO, the bank should have lent me 85% of the PURCHASE price - but they never, they lent me the whole lot which makes it a 100% DRESSED up to be an 85% mortgage. I have ended up buying the flat for the inflated price of 180,000 at 85%. This was not the deal, I received no discount.

The builders are not looking good here - but then the banks IMO, should have CLREALY done some better research with it all cos this should not have happened the way it did.

AND there were 2 valuations from the "bank" or "brokers"... the first one said MAX value 165,000 but prices are depressed in the area due to a glut of new builds - 165,000 at best.

That was ignored by the bank and they took the next so called valuation 2 weeks later of 180,000 - different company saying all was great.

Why did they ignore the first one and go with the MAX on the second one... does not make sense.

Besides, a valuation is NOT a PURCHASE price, it is a guide as to what someone thinks a property may sell for if marketed at that price.

It is only worth what someone pays for it, and I BOUGHT mine for 150,000 from the builder. It states the balance due to them for the flat, on the builders paperwork - 150,000. (180,000 less discount of 30,000).

When I completed, the flats were only worth 150,000-160,000 so did they all drop 20,000 overnight or was the first valuer more acurate - the one that was ditched in favour of another who estimated the EXACT fugure to the last single pound that the builder and challenor claimed it was worth.

The DI from the fruad squad (20 years exp) informed me that it is unlawful to use a "discount" as a deposit and it cannot be accepted by a bank.

There was never any cash transaction to put down as security against the flat - just inflated figures as a "guide" from a dubious source and that cannot be taken as a purchase.

I do not know exactly where the wrong doing is here, but I have been done - challenor yes - but the solicitors and brokers were acting the part too for this all to work which meant the bank must have been duped too.

But I think they have been neglagent in some respect for allowing this process to happen the way it has.

Cashpig74

Dan_1976 wrote: »

OK, Cashpig, lets drop the insults.

A good mortgage broker would have been involved in what you have done. OK you may havebeen done, but you have to admit you were blinded by cash and were probably sold to.

You have basically been involved in, knowingly or not, a dodgy deal between lenders and property developers that 100% needs property prices to increase to work. You got a 100% mortgage on a buy to let on dodgy rental valuations. You signed up for it, false docs or not. If you were that savvy then you failed yourself. If your an amatuer then I feel for you as you will lose money.

I know of a friends client who knows what he is doing, he has brought10-15 properties like this, he was not intending to commit frued but was sold a 100% buy to let with dodgy rent values!

Business is tough, I hope your wallet is not completly ruined!

So - if this is the case the the lender has to take the responsibility for lending inappropriately. Whether I am a clued businessman or not, we all fall victim to things in our time. I was no great property guru and it was an investment flat - I was not blinded by cash, i understood the process as explained by trusting sources - so it seems - and was guided through.

They made millions of pounds and have all been arrested now (challenor lot) so if it was a basic wee through plan then it would not ahve worked. It was complex and very involved. I did not play a knowingly fraudulent part in it. I was the one that got done and now im looking for redress.
I would have to be a true complete fool not to.

silvercar

You paid 150k for a property that you were happy to pay 150k for.

Someone dressed it up to enable you to get a mortgage for all 150k and you went ahead and bought.

Where is the issue? That you thought you were getting a bargain? But why would a builder sell to you for 150k if they could get more from someone else?

Is this not identical to car dealers offering special deals that reduce list price? To furniture stores like DFS and MFI having offers and deals, where no-one pays the full price?

dunstonh

The DI from the fruad squad (20 years exp) informed me that it is unlawful to use a "discount" as a deposit and it cannot be accepted by a bank.

That is not correct. The lender can choose to accept it or not. However, if the discount is used to inflate the price with a view to defraud then it would be. However, that isnt to do with the lender.

There was a panarama programme on last year that covered this. You should look it up.

Cashpig74

dunstonh wrote: »

That is not correct. The lender can choose to accept it or not. However, if the discount is used to inflate the price with a view to defraud then it would be. However, that isnt to do with the lender.

There was a panarama programme on last year that covered this. You should look it up.

Well either way - Im relying on the experience of the Fraud squad here - there is obvioulsy alot more to it than this. It's very involved.

Cashpig74

silvercar wrote: »

You paid 150k for a property that you were happy to pay 150k for.

Someone dressed it up to enable you to get a mortgage for all 150k and you went ahead and bought.

Where is the issue? That you thought you were getting a bargain? But why would a builder sell to you for 150k if they could get more from someone else?

Is this not identical to car dealers offering special deals that reduce list price? To furniture stores like DFS and MFI having offers and deals, where no-one pays the full price?

U misunderstand. I was happy to buy a flat for 150,000 that was worth 180,000 (as this was the investment offer).

I was supposed to be getting a discount from 180,000 BUT the flats were never worth 180,000 to start with - their true worth was 150,000 and CHallenor it seems had bought them for this and sold them on for a "discount" by inflating the price UP. So I bought a flat worth 150,000 for 150,000 duped into thinking it was discounted. If it was truely discounted, then I should only have a mortgage for around 120,000 which would truly be 85% of the PURCHASE price - not the "estimated" price.

What if the surveyor estimated the value at 1.5m? Would that mean that my mortgage is a 10% mortgage? I still woould have borrowed 100% of the price I actually bought it for. It doesnt matter what anyone says something is "worth", its the price it is ultimaely bought for that should be taken into account.

TMB knows the real purchase price was 150,000, they lent me 150,000 yet claim it is an 85% borrowing - which fixes nicely with their ability to flog me a mortgage.

I would never have bought an investment flat for full value. if I know that, then the bank must have seem the same thing. They skipped over an original valuation of 165,000 in favour of a higher one!? WHO does that? Banks are famous for UNDER doing the valuations to give themselves a little margin..

this whole affair is nonesense - but had the prices increased it would be different for me. I would never had known that there was a pricing issue cos it would have been lost in the increase - that was what Challenor was banking on. Its only the price drops that have exposed the massive over infalted pricing con.

Dan_1976

The lender knew what was going on and as big D says a discount is not against the law if done correctly.

The lender or builders probably got a brown bag with some cash in it.

Your in the middle and loose out. However you have to admit they use the fact that everybody want in the property market and the whole nation went money mad!

Cashpig74

It was an opportunity for investors to by below the market value - but it was done to stitch up the wide eyed investor. I still think that the deposit "discount" thing is all wrong here. Once a purchase price is agreed, then the money needs to be stumped up - The mortgage provider can agree in principle to lend say, 85% of a projected purchase price and base some figures on a "value", but they can't lend on a value given by an internal valuer - it's a seriously flawed system.. The agreed price to buy was 17% less than the asking price of 180,000 - which is 150,000. Thie is NOW the actual price that the flat is going to be purchaed at - IF I am to receive the discount. THEN, the mortgage company can lend 85% of that price if I stump up the funds for the rest of it. It was not dont like that. They were informed secretly that I was buying for 180,000 making 150,000 an 85% figure, whilst I was informed that I was recieving a discount FROM 180,000 to 150,000. I wasn't privy to all the paperwork at the time but I am now, well not all but enough to see it unfold.

My gripe with the bank is that they did not background check things enough - and they chose (for what ever reason) to use a valuation HIGHER than the first and NOT inform me about the first one and totally disregard it - even though it actually benefitted the lender better in terms of risk management on the property.

Of course, only a dodgy workman at the bank would welcome the higher valuation as it makes the price required from the builder/solicitors/brokers fit the situation.

As the copper says, the bottom line is no matter how you look at it, I have been lent 100% of the purchase price, cos it was only bought for 150,000 cos that's all the money that was received for it. there was no discount, it was a paper myth to make the figures work and the bank are guilty - knowingly or otherwise - of 100% lending on a buy to let/self cert mortgage.

Cashpig74

I am in the middle and I have lost out, but there surrounding parties are guilty as hell, it's just finding out where the weakness is and how to go about rectifying it.