Should i be concerned about credit letter?

miky36

3 months ago i rented a house straight from the owner, whos now the LL.
Today I received a letter to 'the occupier' from engage credit.
It states;
We are the mortgagees for the named property and we're trying to establish who is in occupation of the property.
Please contact etc etc.

I called, but they were vague (obviously) took my name and asked me to pass on the letter.

Should i be worried about this or is it a normal check up?

Thanks for any help x

eddddy

TBH, it sounds like your LL may have a residential mortgage and might not have consent to let - i.e. the LL is breaching the terms od their mortgage.

If that's the case, now you've confirmed you're renting the property, the best case might be that your LL is charged a higher rate of mortgage interest.

The worst case is that your LL is told to evict you.

Engage Credit buy mortgages from other lenders. Some companies buy mortgages from other lenders cheaply, and are then very keen to make a profit by finding borrowers who are breaching the terms of their mortgages and using that as a reason to call in the mortgage.

I don't know anything about Engage Credit - so obviously, I'm not suggesting that they do this.

miky36

eddddy- thank you.
I was thinking this might be the case, but the LL seemed such a decent, honest person- i'm sure/hope its just a mistake somewhere.

davidmcn

eddddy wrote: »

Some companies buy mortgages from other lenders cheaply, and are then very keen to make a profit by finding borrowers who are breaching the terms of their mortgages and using that as a reason to call in the mortgage.

Surely more profitable for them to allow the borrower to continue to pay interest for as long as possible?

G_M

Either

1) (as suggested) the landlord has a residential mortgage, and the lender will
a) increase the LL's interest rate to a BTL mortgage or
b) call in the mortgage and you'll be evicted

or

2) the LL is in mortgage arrears and this might eventually result in repossession.

For worst case scenario, read:

* Repossession: what if a LL's mortgage lender repossesses the property?

eddddy

davidmcn wrote: »

Surely more profitable for them to allow the borrower to continue to pay interest for as long as possible?

You would think so. But back in 2008, Engage Credit were offering people discounts to redeem their mortgages (See below).

I guess calling in a mortgage due to breach of terms could be cheaper than offering a discount. (But I've no idea if Engage would do this - and things have changed since 2008.)

"At the direction of Oakwood Homeloans, Engage Credit has deployed a strategy to target selected borrowers which will allow them to redeem their outstanding mortgage balances at a discount," he told the website Mortgage Strategy.

Link: http://news.bbc.co.uk/1/hi/business/7569665.stm

However, people claim that Mortgage Express / UKAR are using breaches of contract 'small print' to call in BTL mortgages (See below).

... But landlords have complained UKAR is 'bullying' borrowers, using contract small print to repossess properties, or forcing landlords to sell when a greater degree of leniency could allow them to stay afloat and repay their loans.

Link: http://www.thisismoney.co.uk/money/mortgageshome/article-2583279/Landlords-complain-heavy-handed-tactics-taxpayer-backed-bad-bank.htm

davidmcn

eddddy wrote: »

You would think so. But back in 2008, Engage Credit were offering people discounts to redeem their mortgages (See below).

I guess calling in a mortgage due to breach of terms could be cheaper than offering a discount. (But I've no idea if Engage would do this - and things have changed since 2008.)

Hmm. Certainly all the repossessions I dealt with for them were normal cases involving significant arrears (difficult to persuade a judge otherwise) - and haven't heard of them offering any discounts on redemption.