My retired mothers interest only mortgage expired - please help! :(

Thrugelmir

lonestarfan wrote: »

That's interesting. How are you aware they need to reduce the book & that theres not the funding? Is it basic economics or related to the credit crunch or has it been reported on etc? Thnx.

Funding available from the wholesale markets has been progressively reducing since August 2007. Hence the raft of measures by the Government of the day to provide high levels of funding to the banks. Remember banks borrow short and for mortgages lend long. So banks are constantly having to refinance their debt positions. BOE published a report in May 2009 forecasting the problems that lay ahead.

In the past 5 and half years the measures used are:-


Direct Loans
Equity Injections
Special Liquidity Scheme
Special Guarantee Scheme
QE
Funding for Lending
New Buy
Help to Buy.

Add them up and that's over a £1,000 billion of finance that's been available. Just to keep the ship steady.

Mortgage debt doubled between 2003 and 2008, from £600 billion to £1,200 billion. So going to take many years to deflate the bubble. Estimates range at a final contraction figure of between £250 and £450 billion pounds of debt.

Switching majority of mortgages onto a repayment basis. Allows the contraction to be performed in a measured way.

TLOR

holly_hobby wrote: »

Oh by the way TLOR .... regarding your argument that all lenders automatically agree to a CTL on request, and my comments that a lender may refuse such an application, being cited by you as apparently completely inaccuate, is somewhat clarified by a new posting ...

Where the OPs CTL appliction has you guessed it .... been refused ..

https://forums.moneysavingexpert.com/discussion/4593089

Holly

Hi Holly,

Not sure if this is some kind of wind up or not, did I really say "all lenders automatically agree to a CTL on request"?

However even though I don't recall making such a statement I followed your link with interest, extremly dissapointed to discover it was merely another forum thread (with your own post in it to boot!).

I can only talk about my own experience and that of my brokers, I am sure there are many different experiences and the situation changes monthly.

I was much more concerned about your assertion that the lender would repos the property if you let it without consent, still awaiting that link though as I am sure many others. I am sure there are thousands of examples out there though, after all its a breach of T&Cs

holly_hobby

TLOR wrote: »

Not sure if this is some kind of wind up or not, did I really say "all lenders automatically agree to a CTL on request"?

Yes ...

TLOR wrote: »

It maybe in the small print but it is rarely refused, so effectively I'd say it is but I accept the bank could refuse. I have had not had a issue on the two occasions I have done this in the past though, it was a very simple phone call to the lender who had no objection whatsoever. .

TLOR wrote: »

However my own experience is that obtaining consent to let is a much more trivial issue than you suggest.

You also claimed it was your right to rent regardless, until Thurls. corrected you on the inaccuracy of your statement .....

TLOR wrote: »

Likewise, if I decided to purchase the property to live in as a second home on a residential basis and then after the mortgage went through I then decided to let the property that would be my prerogative (as long as then let the mortgage provider know I had subsequently decided to let it )

Followed by

TLOR wrote: »

However even though I don't recall making such a statement I followed your link with interest, extremly dissapointed to discover it was merely another forum thread (with your own post in it to boot!).

Its a thread about an indvidiual having a resi mge for several yrs, and still being refused consent to let .... rather relevant I would have thought ..

TLOR wrote: »

I can only talk about my own experience and that of my brokers, I am sure there are many different experiences and the situation changes monthly.

Refer again ...

TLOR wrote: »

It maybe in the small print but it is rarely refused.

TLOR wrote: »

I was much more concerned about your assertion that the lender would repos the property if you let it without consent, still awaiting that link though as I am sure many others. I am sure there are thousands of examples out there though, after all its a breach of T&Cs

Really, because the reference to repossession was actually your own, not mine ...

TLOR wrote: »

Peoples circumstances can change overnight and I am sure the last thing a bank would want would be to repossess a property that could only potentially have only 5% equity when the mortgage payments are being met.

When what I ACTUALLY stated was ....

holly_hobby wrote: »

CTL - as I say IF the lender believes you have pchd under a resi mge as a back door buy to let (although usually its the other way round), or for anyother reason, they can and do refuse CTL requests - which means that to let without the lenders tacit consent, puts you in breach of your mge T&Cs - to which they can demand immediate redemption.

Which means the mortgagee may direct the mortgagor to remortgage to an alternative BTL provider (within a permitted timeframe) ... I made no reference to any possession order (although of course the lender would of course reserve this right and option, dependant upon the prevailing circs, and a given where there are an arrears situ).

And your demand of proof from me which supports a lender will repossess on breach of T&Cs .... (direct repossession was a claim of yours not mine) ...

holly_hobby wrote: »

I have no figs on forced possession re unauthorised letting under a resi mge (as a lender wouldn't publish this data).

However the facts remain that to let without the lenders consent, is a breach of your contractual mge T&Cs - to which the lender may take several actions, from penalties and/or payrate loading onto semi-commercial rates (resulting in increased mge payments, which could lead to possession following default), to switching you onto a BTL arrangement (again higher payrate), to demanding redemption of the mge held with them (meaning you would need to remortgage onto a BTL with an alternative lender, within a given time frame - much as Mum has been told by Halifax in her situ).

Anyhoo, this thread has really rather ran its course now - you initially asked for guidance and help on how to assist Mum, which has been freely given, as to how you utilise the comments and advice provided from contributors is of course at your own discretion

Holly

TLOR

holly_hobby wrote: »

Yes ...




You also claimed it was your right to rent regardless, until Thurls. corrected you on the inaccuracy of your statement .....

Followed by



Its a thread about an indvidiual having a resi mge for several yrs, and still being refused consent to let .... rather relevant I would have thought ..


Refer again ...





Really, because the reference to repossession was actually your own, not mine ...



When what I ACTUALLY stated was ....



Which means the mortgagee may direct the mortgagor to remortgage to an alternative BTL provider (within a permitted timeframe) ... I made no reference to any possession order (although of course the lender would of course reserve this right and option, dependant upon the prevailing circs, and a given where there are an arrears situ).

And your demand of proof from me which supports a lender will repossess on breach of T&Cs .... (direct repossession was a claim of yours not mine) ...



Anyhoo, this thread has really rather ran its course now - you initially asked for guidance and help on how to assist Mum, which has been freely given, as to how you utilise the comments and advice provided from contributors is of course at your own discretion

Holly

So in summary based on the fact that none of your quotes say "all lenders automatically agree to a CTL on request" it would have saved yourself a whole bunch of time by saying NO I did not say that as I stated!

You made several references suggesting people could lose their homes if they even thought of braking a T&C but unlike yourself I am not going to trawl through this thread to try and prove a point as that would be childish.

Like I said, 1) stick to professional advice 2) let people make up their own minds on risk, and 3) certainly try and refrain from twisting peoples worlds into something that YOU THINK they mean.

For the benefit of others...

In summary this thread (before it got hijacked) was about what options a lender may give to a retired individual when their interest only mortgage expired and they would not be eligible (due to insufficient income) to extend the mortgage.

1) Before starting this thread I advised my mother to go into the bank and speak to them herself and get them to talk to the mortgage center on her behalf which she did. This proved most fruitful as she had several "no's" before the person in the bank finally got through to somebody with more authority and persuaded her to offer a solution (I don't believe this would have happened if my mother wasn't there in person).

2) The lender (Halifax in this case) offered to extend (contrary to the black and white terms and conditions of the mortgage she had) the interest only mortgage providing my mother has the property on the market within 6 months and sells it within 18 months.

It just goes to show that life isn't as black and white as some would have you believe so I would encourage everyone to not listen to the first financial adviser they get advice from and seek professional (real world) advice.

Thanks to everyone that offered genuine unconditional advice in this thread, I hope it may help others in the future who find themselves in a similar position.