Repossession - mortgage lender valuation

Rick62

Helen, you'r obviously Bruno. Please stop hijacking and crawl back to your hole.

CAS32

To answer Rick as to why we did not sell the property ourselves previously.

We had got a new tenant in the property, via a Letting Agent, at the time. The tenant was getting behind with his rent and we were obviously chasing him for it. We tried to enlist the Letting Agent to visit the tenant as their office was in the next road to the tenant, as we live over 70 miles away from the property.

We explained the situation to the mortgage lender, who were patient for about 2 months. Without any further warning they issued a Court summons for a Possession Order. We asked them if they would suspend any further action to allow us to evict the tenant and then put the property on the market ourselves. The mortgage lender was uninterested in this proposal.

We managed to evict the tenant about a week before the Court case, and as I said previously we were denied the opportunity to sell the property ourselves at the Court hearing.

As any prospective purchaser could have discovered by going to various free house price websites, the prices that the properties in the same development sold for 2 years earlier was £249,950. Most - not necessarily all - purchasers may have considered that, due to the prevailing property market increases in this area, that the selling price would have been in excess of £249,950. So if the property was being marketed at well below what they expected the guide price to be, would probably raise concerns of why it was being sold so 'cheaply'.

We appreciate that others may have looked at it as a bargain, but prices in this specific area had risen fairly dramatically over this period, which would have possibly raised suspicions on such a low price compared to the rest of the market.

The other point is that The value that the mortgage lender put on the property, was actually LESS than the amount of the mortgage they had given us two years previously.

Guy_Montag

CAS32 wrote: »

When we bought our property the prices they sold for were approximately all the same. Only one identical property to ours has been sold, and that was sold after about 12 months later (2005) for the same as the original purchase price at £249,950.

Everyone paid about the same, that suggests the original valuation was about right.

silvercar

were you making any effort to meet your mortgage payments, or were you not paying anything due to no rent coming in. I am very surprised that lenders will win a court case with less than 2 months arrears.

MarkyMarkD

CAS32

You seem to be missing the point that the mortgage is YOUR financial commitment, irrespective of any void periods or tenant problems you face.

If you bought the house as a BTL with no ability to pay the mortgage for even two months without a tenant, you were daft for going into BTL. You can't guarantee that a property will be let all the time unless you use an agency and pay them for that guarantee - effectively an insurance policy against voids.

epz_2

CAS32 wrote: »

The other point is that The value that the mortgage lender put on the property, was actually LESS than the amount of the mortgage they had given us two years previously.

no the point is you borrowed 1/4 of a million to take a punt on the property market thinking its easy money. seriously if you are willing to borrow that kind of cash but dont have £2k-3k in reserve then it is you being stupid.

i could borrow £100k on credit cards in about a week, its not like i could pay it back at 20% interest but hey why should i i mean its the banks fault for lending the money with clearly defined payment terms and charges, not me for borrowing irresponsibly.

its the same logic thats now means vacum cleaners have "not for internal use" to stop people sueing them after injuring themself ramming the thing up there @rse.

grow up, you borrowed the cash and didnt pay the debt back, its your fault and debt.

Rick62

silvercar wrote: »

were you making any effort to meet your mortgage payments, or were you not paying anything due to no rent coming in. I am very surprised that lenders will win a court case with less than 2 months arrears.

Remember BTL is a commercial loan not a residential loan. This is why banks like BTL and are falling over themselves to lend to BTL.

Had it been his own residence then you would have turned up in court with kids in tow talking homeless and been given time to sort it out probably. BTL, straight investment, if you are in breach of the terms then you lose.

The bank sound like they have been particularly and unnecessarily harsh, but if you go into BTL you must understand all the legal principle and, for a £250k investment with circa £200k mortgage you should have reserves of at least £10k.

CAS32

To answer MarkyMarkD's point.

Surely it is a JOINT responsibility. Should not the mortgage lender Lend responsibly too?

If the mortgage lender considers that the property is worth LESS than they originally granted the mortgage for 2 years previously, shouldn't they question their original acceptance of their accepted valuation, particularly as there had not been in a slump in property prices in the area, but in fact a rise over the time period?

As has been pointed out, all the other properties in the development sold for a similar price to our own at the same time. There was a mix of BTL investors and Private buyers.

We also have another BTL property which we have owned since 2003, but in a different area.

The point I am trying to make is the prinicipal of 'Duty of Care' by the mortgage lender when granting a mortgage, and also if and when re-possessed, that they attempt to market the property at prevailing market value ie. taking into account the upward trend of property prices in the specific area. Rather than commence by offering it for sale at not only below the market price, but also below the outstanding mortgage value.

Guy_Montag

CAS32 wrote: »

To answer MarkyMarkD's point.

Surely it is a JOINT responsibility. Should not the mortgage lender Lend responsibly too?

If the mortgage lender considers that the property is worth LESS than they originally granted the mortgage for 2 years previously, shouldn't they question their original acceptance of their accepted valuation, particularly as there had not been in a slump in property prices in the area, but in fact a rise over the time period?

As has been pointed out, all the other properties in the development sold for a similar price to our own at the same time. There was a mix of BTL investors and Private buyers.

We also have another BTL property which we have owned since 2003, but in a different area.

The point I am trying to make is the prinicipal of 'Duty of Care' by the mortgage lender when granting a mortgage, and also if and when re-possessed, that they attempt to market the property at prevailing market value ie. taking into account the upward trend of property prices in the specific area. Rather than commence by offering it for sale at not only below the market price, but also below the outstanding mortgage value.

Was the loan at 100% loan to value? Most banks don't lend on BTL at that level, the reason being that they need to cover themselves should they sell at less than the place originally cost.

I would think the market price for these flats is now £225k

jonesMUFCforever

CAS32 The answer is no.
Everybody is telling you the same thing here but you do not want to listen.

The valuation for the LENDER came out as £250k. That was then and there was no guarantees that that would be the valuation at any time in the future.
Did you get your own survey and valuation done?

The lender has only a duty of care to get the best price possible for your property when repossessing.

If you have another property did you not think if you thought that you were being unfairly treated to re-mortgage the property elswhere?