Govt Mortgage to Rent Scheme/Will it save my house?

west0504

Hi Angie, thanks for your reply. Yeah I'm pretty gutted as although I was reluctant at first, the Mortgage Rescue Scheme is a brilliant thing and was going to be the answer to all my problems.

Repossession looks pretty imminent and I can live with that as long as we're out before it happens. Don't think I could cope with packing up kids and belongings while baliffs are changing locks!

As for the local council, I contacted them after I received the, (in my opinion rather sheepish) letter on Friday. They have a guidline on when they can get involved. I'm assuming thats how close you are to being homeless? Which I think is around now so they have booked an appointment for 9am tomorrow morning. Although I was basically told again that it looks unlikely we will be offered housing as we would be seen to be intentionally making ourselves homeless. But if on the day of repo we still have no where we will be offered emergency housing for 28 days due to having children so yay, bonus!

This is obviously our fault as we decided early on that our debts and bills came before trying to save for the mortgage when we were already thousands in arrears and starting the MR back in August. This was prob a mistake as it will prevent us from further negotiations with Nrock and also help from Local Council.

To be honest I don't want to stay in this house one more minute, it feels like the biggest mistake we ever made!

Another option will be to go for private renting with a possible grant from council for deposit/bond etc. Although I can't see any lettings agent taking us?? And its still going to be hard finding something other than a 2 bed flat that we can afford!

But trying to be positive. Still! At least my children are too young to know what is going on, (1 and 2) And we're escaping a rotting, damp crumbling house... can't wait to see the pathetic amount it gets sold for and we have as our shortfall debt

Thanks again everyone, especially you Angie for all your advice and support. Just a shame it didn't work out for us as I would have loved to have also helped others starting out on the road of MR

Good luck to you all. ...I'm off to find some repossession threads now!

Leigh x

notfunnymoney

Oh L my heart goes out to you, it really does.... I don't even know you but I know what you've been thru with regard to the long drawn out process that is mrs and I am also at the stage where something could easily come up to end it all for us too....the uncertainty is soul destroying.... but I guess by this stage you're starting to feel a lot more positive about it all goin thru - even if it does take a while to completion.... did you have any idea that your works would come to £20k+?? What sort of things have they said would need doing that could amount to that?! Just thinking what Angie's havin done now - that's quite a lot isn't it? Is there any way you could get some of the works done yourself somehow and ask them to check again? Sorry, I might sound stupid but just trying to think of a few things....

In the meantime for us.... were supposed to have HA come round for mtg yesterday but snow is bad here so it got changed to next Friday - I love the snow normally but not this week!! Didn't think the valuer would turn up today for the same reason but he did - and it's that one we need to know about to check if we'll fall into the criteria for mortgage to rent - this could very well be our downfall point and one I'm pooing myself about most of the time - but it's been done now so he'll be reporting back to HA then I guess we'll hear a yay or nay from them.... also got structural surveyor coming on the 14th... as far as we know, there shouldn't be anything requiring too much work but now panicking they'll find something we couldn't have had a clue about.... but I would hope that either way, by xmas we will know.... or maybe if it is bad news then it can wait until after xmas.... Such a very stressfull time.....

L - I really hope that you can find out some answers and maybe, altho it seems far from it now, this is meant to be for you and you'll be better off in the long run by somehow going down a different route....I really hope so for you and your family.... let us know how you're getting on won't you?

H x

notfunnymoney

Hi L - just seen that I replied without reading your reply of 30/11!!! So it seems your place did need some work then if it's damp/crumbling as you say?? Cannot believe you can be deemed as making yourselves 'intentionally homeless' - having been thru all this!!! It's horrible having two young children isn't it (mine are 4 and 2) - sometimes I feel like their little lives are whizzing past without me while my head is stuck in all our money worries... my little boy (4yr old) seems to pick up on some of the anxiety now but think he's still just young enough to escape all the worry from this - much better than if they were bit older and knew what was going on....

Anyway, best wishes and good luck to you and let us know what happens!

H x

NellieNewbie

It's been a while since I posted on this thread (end of July) and I just wanted to say we are now going through the MRS process. I had just been to CAB when I last posted and a lot has happened since then.

Our main mortgage is with HBOS, but we also have a secured loan from Central Trust (CT). We are wary of not paying CT, as we don’t think they will be supportive if we were unable to meet our monthly payment. At the time I went to see CAB, apart from 6 months in 2009 when we paid half of our mortgage, we had managed to pay the mortgage and the secured loan. But it was killing us to manage this and we were doing anything to get the money in time every month and we knew we just couldn’t go on like that.

We wanted to approach the local authority to apply for the MRS, but the big problem was we didn’t have anything from HBOS to say they would repossess our house if we didn’t pay the mortgage. So we wrote to HBOS several times explaining the situation and to cut a long story short, the only way we could get the attention of HBOS was to stop paying the mortgage all together. After not paying the mortgage for 3 months, we finally got a reply from HBOS and the letter was just what we wanted. HBOS had looked at our circumstances and considered the different options available to us and agreed that we should approach the LA about the MRS (Mortgage to Rent) and no further action would be taken whilst we were going through the MRS process.

So we applied to the LA for the MRS in October (on the actual day of the government’s spending review!) and were referred to Orbit and everything seemed to be going fine.

The surveyor came out less than a week later and was here for over 2 hours going over the property. Then he chatted to us at the end of his visit about the valuation figure and the recommended rent. He had done several MRS applications and wanted to try and make sure if he could help it, that his recommendations were not detrimental to our application. We were hoping for a valuation of about £120k because that would mean we could almost pay 100% to both lenders. The surveyor was willing to give a valuation of £130k, so we thought that was brilliant (the maximum in our area is £155k). He said the maximum rent he could recommend would be about £500 pcm and that was fine for us too. So far, so good we thought.

Then the following week the Decent Homes assessor came to assess the value of any repairs or improvements. He said the house was in a great condition compared to most he had seen (he’s currently got 45 ongoing MRS applications) and he thought Orbit would be glad to get our property, particularly as it is a bungalow. He actually made suggestions for work to be done, rather than needing to be done and I actually pointed out some things that could be done. He also said he wouldn’t have been asked to assess the property if the valuation hadn’t passed.

A few days later we got a phone call from the housing officer at the LA to say Orbit had turned us down. Basically the valuation of the property was too high and the rent was too low for Orbit to recover their money. They would need to charge us £427 pcm for the first 3 years and they could only charge us £400. To say we were devastated is an understatement.

Once I recovered from the shock my brain went into gear and the next day I spoke to the housing officer at the LA and Orbit and unofficially to the surveyor. There was no way we were just going to accept the situation without a fight when everything was based on estimated values and we were so close to qualifying. The housing officer at the LA recommended I spoke directly to Orbit. So I rang Orbit and the MRS officer there explained how the financial side of the scheme works.

I hadn't realised there is a direct connection to the valuation of the property and the rental value. I now realise that basically the way that the MRS works is that the LA/RLS effectively takes out a mortgage on your property from the government and you pay back that mortgage as rent on a monthly basis. It is based on the equivalent of a 30 year mortgage, so the LA/RLS needs to be able to charge you a monthly rent that will redeem the mortgage (i.e. the amount it paid for your property plus the cost of any work that needed doing at the time of the sale) within 30 years. I didn't appreciate at all that this was how the finances were worked out.

During my phone call to Orbit, they agreed to contact the surveyor to see if there is any leeway on the figures he gave. When I rang the surveyor to explain the situation, he was very helpful and glad I had forewarned him. He was more than willing to reduce the valuation to £125k and increase the rent to £525 pcm.

I found a link on this thread to the Financial Appraisal Model (it is an Excel spreadsheet) and using this spreadsheet I worked out that this would just be enough (by £6 pcm!). Obviously I would rather we had to haggle with our lenders because we can’t pay them 100% of the balances, than not qualify for the scheme at all.

I got a phone call from the Housing Officer at the LA the next day saying we were back on the scheme and she also told me that if we needed it, up to £5000 was available from the LA as an interest free loan to meet any shortfall that could not be agreed with out lenders.

So we have everything crossed now. It has been two weeks and we've not heard anything more, so I hope that is a good sign.

I just wanted to point out that we were not actually going through the repossession procedure and were still accepted on to the MRS scheme. We were how ever in an unsustainable position and this was accepted by our lender. There may be people who don't realise that you can apply for the scheme in these circumstances.

Fortunately my work experience has given me the confidence to deal with situations like being turned down for the scheme and I feel for anyone who is not in a position to deal with difficult situations and are left to just accept the situation.

Thanks to everyone on here, especially Angie for sharing their experience.

PS I hope this is the only long post I will need to make on this thread!

west0504

Hi everyone,

Wow NellieNewbie, how amazing are you! And great work for actually getting to the bottom of your situation. And your right, I bet so many people just accept it defeated. It sounds like you've made a difference and I have all fingers crossed for you x
Also sounds like we may have had the same building work assessor, Orbit and 45+ houses He was lovely though.

Thanks for your reply H, yeah I don't think its sunk in yet. We have buried our heads in the sand for a long time and the MRS was the answer to all our prayers! As for the work that needed doing. On first inspection it just looked like a simple re damp-proofing but then the buildings work assessor took one look at it and said it wasn't damp but maybe a water leak under the house! Also there were some issues with work that was done prob 30 years ago in the loft... short story, new roof beams and extra structural surveys. As well as the usual story of new central heating system newer double glazing etc. Just makes us realise there would be no point fighting for this house as we could never afford this extent of building works and no one would ever buy the house after a survey! We've decided to cut our rather large losses and start saving for rent...

As for our appointment at council. We have started the process of applying on the housing register but again were told as we haven't paid our mortgage for so long it would appear as though we were doing it intentionally. I know, I did tell them it honestly wasn't our life long plan of get together, work our bums off, buy a house, have children, take maternity leave, fall behind on mortgage payments, get into huge debt and then trot off to the council and ask for a huge house for no money and then give up work, apply for benefits then breed some more...! :rotfl:

Oh you have to laugh. Or I'd probably strangle someone!

But as I was saying, we have been told that we have to apply for housing like everyone else and also subit lots more info including 6 months of bank statements each and an up to date letter and statement from lender. He said it takes some time to come to a decision and if we still didn't have anywhere to live after the court hearing and end of repossession proceedings then we will be given emergency accomodation for 28 days in a rented flat, (by this he means one of two high rise block of flats )

Not that I'm bitter or ungrateful but I am so fed up of hearing stories of people cheating the system and living like kings :mad:

Thanks again for providing a beautiful place to vent!

Leigh x

NellieNewbie

Thanks for your reply west0504. I'm strong and then I collapse for ages! :rotfl: I don't think most people can understand what a lot of us are going through and very few think "There but for the grace of God...". We had financial problems once before, years ago and is it hard to work out how we ended up in an even worse situation this time. It certainly isn't because we lived like kings and I do wonder sometimes if some people aren't really facing up to their own problems. You just do what you think is right at the time. This time job loss and ill heath are at the root of our problems, along with thinking/believing/hoping/pretending for far too long that things will get better.

I'm trying not to count our chickens about the MRS, but we will be in dire straights if it doesn't work out. I hope something good happens for you soon. Fingers crossed.

notfunnymoney

Well hats off to you Ms Nellie!!! I have to say I'd have done exactly the same as you - wouldn't be able to let it drop at that, would require explanations!!! But you're right, for anyone with not as much confidence to fight like us (mine from work experience also!) that poor family would suffer massively just cos the powers that be don't quite know how to do their job properly and made a bit of an un-thought-about decision!!!! Gggrrr makes me so angry!!! All thru this process I've felt like I'm almost telling the people doing this for us the MRS process as I've researched it so much myself, ha!! There have been a lot of comments that could've put us off but I've kept at it - even writing a 3page letter to LA after they'd had our App for 3mths and we'd heard nothing - I wasn't massively stroppy but within a week they were round visiting us and forwarding our app to the RSL - who have also been fairly quick at getting everything sorted.... I just wanna get to that bit where everything is approved for rescue and even if we have to wait mths while the solicitors do their gumph at least we'll know it's on it's way to a def completion!!!

Very interesting what you found out about the LTV/Rent/Mortgage amount they take out.... I had no idea about all that side of things either... as far as I know we'll be ok cos we're quite far away from being in neg eq (back from the days when we could afford a deposit plus luck in rising house prices!) so our rent should easily cover the mortgage but it's all these quirky little things that are 'behind the scenes' that freak me out the most cos even after all my research into the process/eligibility criteria etc - there are still lots of little (but big!) details that could potentially make this all fall apart for us and like you, if that were to happen we'd be absolutely devastated and I just don't know what we'd do.....

I'm totally with you Leigh on the whole 'people cheating the system' thing - how is it these uneducated/non-working people seem to be very clever and clued up on all the details and processes that will get them the most out of our benefits system??!! Like you said, we no way set out to live a life on benefits and gov help.... I feel very sad it's come to this and either way we'll end up not owning our own home and may not have a very secure life for our children.... however, like you and Leigh, we also got to a point where you have stop thinking this is just a 'temporary blip', give up your pride and put your hands up and say "we surrender - please help us!!" But when you've tried so hard to do everything the 'right way' in life and to wind up here, sometimes you can't help but think "why did we bother?!" - when I met my dh 7yrs ago I was still living at home and had he got me preg and I had said I didn't know who Father was, I'd have got a nice little flat that would've grown to a house as my brood grew with me, eh??!! Oh I know that sounds a bit off but when you've struggled as much as we have it does make you a bit bitter sometimes!!!

I really hope something works out for you soon Leigh... keep us updated .....and Nellienewbie - let us know how things are going!!!

H x

NellieNewbie

It is appalling that your LA had done nothing with your application after 3 months! :eek: No one needs that kind of extra stress. :mad: Do you think it was mislaid or something? :huh:

Originally at our LA only one person was trained to do MRS and then later everyone else was trained. We were lucky to see the person who was originally trained, but even then we were only the seventh application they'd had and the last three had all been received since August and turn down because of how much work to the property was needed. I completely understand that you want to get the 'routine' bit of the process out of the way.

Fingers crossed then.

notfunnymoney

No, not mislaid - just slack!! We are actually the first mrs in our borough so nobody had a clue!! They'd had some training and a pack given to them 18mths previous when the mrs came out but they'd had no app's up until mine so I think a lot had got forgotten!! Hopefully if anyone else applys now then it'll be a bit quicker for them now they've had a practice run on us!

It's really scaring me now hearing about all these mrs failing due to more than £20k works needed.... I naively thought that £20k was quite a high figure and would easily cover most things.... now I'm freakin they're gonna find something we could never have even thought about before a trained eye sees it!! Well a week Tues (14/12) we'd have had the valuation, meeting with RSL and the RICS survey all done (hopefully no cancellations/snow!) so we can only pray that it wouldn't be tooooooo much longer after all that, that we'll find out if all's well - if it isn't then I'd prefer to find out after xmas thanks, ha!!

Keeping everything crossed for all of us xxxxxxxx

H x

sizzler

sorry to hear:)

a no win:)

but good luck:)