Pls help - consent to let probs from Northern Rock

silvercar

MissMoneypenny wrote: »

Silvercar, why are you still encouraging people to let their property without permission, No, I was answering the question on what would happen if someone did.In this case the OP can afford the mortgage.when you know that the renter will be given little or no notice to get out of the property if the landlord falls into arrears?Mute point in that lenders on owner occupier mortgages have to treat customers fairly and often give more time when arrears build up. BTL mortgages are commercial in nature, offer less protection in terms of FOS/ FSA regulation and the lender can and does repossess quicker. In both cases the lender will write to "the occupier". Yes, the tenant will be able to sue the landlord and letting agent if this happens, but that is of little consolation to them at the time, when they and their children are put out on the street because the landlord got into financial difficulty and had failed to obtain consent to let from the lender.

The property will not be covered by the insurance if the landlord has failed to obtain consent to let from the mortgage lender.Check the terms and conditions of tenanted property insurance before making generalised and often untrue comments.

Rather than selectively quote maybe you would like to comment on my first paragraph:

Its all guesswork as there hasn't yet been a repossession hearing for someone who had no arrears AFAIK. That in itself says a lot. No lender has risked going to court and asking for repossession where the borrower has kept up with repayments. (To quote the catchphrase: your home is at risk if you don't keep up with repayments, not if you do.)

People are caught when they need to move, either for job/ personal reasons or to let their home to avoid repo. That lenders (who screwed up by over-lending in the first place) can turn around and stop people acting in the most sensible way is outrageous. Consent to let only came into existance as a money spinner when BTL mortgages became popular, before that people just got on with it. So lenders thought they could raise a fee for giving consent. Only recently have they decided to withhold consent, in the hope that people would move lenders and so they could clean up their books. The whole problem has arisen because people can't move their mortgages. I really would like to see a lender try and justify refusing consent to let, how can it make sense to refuse to allow someone to do something that makes their mortgage affordable, how is that treating customers fairly. In other countries, in Australia for example, you get a mortgage, you are responsible for it, whether you rent out or live in is upto you.

Voyager2002

silvercar wrote: »

Rather than selectively quote maybe you would like to comment on my first paragraph:



People are caught when they need to move, either for job/ personal reasons or to let their home to avoid repo. That lenders (who screwed up by over-lending in the first place) can turn around and stop people acting in the most sensible way is outrageous. Consent to let only came into existance as a money spinner when BTL mortgages became popular, before that people just got on with it. So lenders thought they could raise a fee for giving consent. Only recently have they decided to withhold consent, in the hope that people would move lenders and so they could clean up their books. The whole problem has arisen because people can't move their mortgages. I really would like to see a lender try and justify refusing consent to let, how can it make sense to refuse to allow someone to do something that makes their mortgage affordable, how is that treating customers fairly. In other countries, in Australia for example, you get a mortgage, you are responsible for it, whether you rent out or live in is upto you.

No, this practice has been around for a long time. I first encountered it in 1993, when I needed to move away for a while and let my home. I was in the process of re-mortgaging to Britannia, who told me that if I were to let the property I would be moved on to a "commercial" mortgage, with an interest rate about double that of the product I had paid to go on to. Fortunately my "old" lender allowed me to let while remaining on their standard variable rate, which was not good but not particularly painful. I lost the remortgage fee but that was bearable.

The risk the OP runs is that once NR discover that she has let without permission, they will charge her a whole range of extortionate fees. She would have little option but to pay them, since after all they have got her house. Should she fail to pay them, arrears and repossession would follow.

And the OP does have a whole range of options: moving her OH into her home is the most obvious; or finding some form of credit to cover the negative equity; or even keeping on a "spare" home for a while.

silvercar

The risk the OP runs is that once NR discover that she has let without permission, they will charge her a whole range of extortionate fees. She would have little option but to pay them, since after all they have got her house. Should she fail to pay them, arrears and repossession would follow.

Except she is asking NR to pay the fees now and they won't let her!

There is something immoral about houses standing empty when other people are in desperate need.

catlover32

I know it's really immoral. *sigh*. I'll let everyone know what i get back from the appeal letter, but in the meantime I'm getting on with it. Not right now but in a couple of months I'll be letting it.

MissMoneypenny

silvercar wrote: »

Check the terms and conditions of tenanted property insurance before making generalised and often untrue comments

It's getting the payout on a claim where the problems can begin. Ask the insurers to put in writing that they will still cover all eventualities even thought the mortgage lender has not given Consent to Let, otherwise you stand a real risk if not having a claim upheld. We all know how insurers don't like payng out.

silvercar wrote: »

Rather than selectively quote maybe you would like to comment on my first paragraph:

I was asking you why you continually encourage people to rent their property out without consent to let, when you know that a tenant and their family are put at risk. Why do you do that?

Everybody believes they can make the mortgage payments when they first rent out, but voids, repairs and job losses happen all too often

If the lender finds out a property has been rented without consent (as mentioned in a recent post in the link in my signature) they can do a number of things as the landlord has not complied with the mortgage agreement. Putting them onto the higher Buy to Let rate mortgage is one thing they can do and this will only worsen a struggling accidental landlord's financial problems. It's in the lenders interest to get more money out of the borrower and hope they can pay than to start a repossession straight away. However, they do have the power to do this is they want to.

silvercar wrote: »

People are caught when they need to move, either for job/ personal reasons or to let their home to avoid repo. That lenders (who screwed up by over-lending in the first place) can turn around and stop people acting in the most sensible way is outrageous. Consent to let only came into existance as a money spinner when BTL mortgages became popular, before that people just got on with it. So lenders thought they could raise a fee for giving consent. Only recently have they decided to withhold consent, in the hope that people would move lenders and so they could clean up their books. The whole problem has arisen because people can't move their mortgages. I really would like to see a lender try and justify refusing consent to let, how can it make sense to refuse to allow someone to do something that makes their mortgage affordable, how is that treating customers fairly. In other countries, in Australia for example, you get a mortgage, you are responsible for it, whether you rent out or live in is upto you.

The lender may have "screwed up" in the past in lending to someone they should have never had loaned to, but that person choose to take the money. Nobody forced the borrower and they have to take the responsibility for that.

The lenders are refusing to give consent to let to some because we are in a falling market. Why should they take an even bigger hit? They are not a charity. Over the years I have seen a few booms and busts and have sold house in both. Boom and bust is part of our culture.

In the rental market, the mortgage lenders know that the market has been flooded by people hoping to sell "when the market picks up". Lenders will give consent to let to those that have a good LTV as the market is still dropping and the reality is, that the tenant might buy a house when the market has bottomed out. Without a tenant and no way pay the mortgage, the accidental landlord will have to sell (or be repossessed) when houses are almost certainly lower than they are now. The good LTV will protect the lender from taking the gamble the borrower is taking

Therefore, the bottom line is that the risk to lenders of giving Consent to Let now to those that have a high LTV or are already in (or on the brink of) negative equity, is too high a risk for the lender to take. They are a business, not a charity.

MissMoneypenny

silvercar wrote: »

There is something immoral about houses standing empty when other people are in desperate need.

Without consent to let from the mortgage lender, those in "desperate need" could be thrown out.

What is "immoral" is that people are letting out properties without their mortgage lenders consent and putting those "in desperate need" in a much worse position. Please, please, stop encouraging people to do this.

catlover32

Perhaps if mortgage companies just gave the consent there wouldn't be so much of a problem. It's wrong.