Buying and renting back.

MortgageMamma

I happen to know a lot about the sell and rent back market as I used to receive adverse credit remortgage leads from one (i.e. the cases they refused to buy where there was not enough equity or the homeowner could not afford the rent). In fairness, and to bring a little balance to the arguement sell and rent back companies CAN SOMETIMES be useful in the right circumstances.

The company that introduced to me were pushing for the sell and rentback market to be regulated by the FSA, and were hoping to be the first company to undergo scrutiny to get their procedures right. I had to laugh at that because they were an absolute shambles and I pulled them to pieces at one point. Half the staff were not aware of data protection and at one point they had a member of staff dealing with an elderly couples alledged "relative" without the relevant power of attorney. Needless to say the director, who had alledgedly spent many years in the industry did not have a clue about POE's and knew very little about DP and gaining consents from clients.

On the plus side though, one factor which did make me think the company were trying for good practice is the fact that they offer tenants a 7 year tenancy with break clauses. They also offered buy back at any point whilst in tenancy but that was a joke....

In short this should be the last resort for anyone, and I mean the last - plenty of people try for this option when they about to go bankrupt, its a waste of time as the solicitors will do a bankruptcy search and the official receiver will class it as disposal of assets.

Sorry for the waffle, trying to address whats been said so far but there is so much more to tell....

MortgageMamma

Oh and I just wanted to thank Kenshaz for starting a thread on an interesting topic which I do not believe has been discussed fully on this board before.

Thanks K x

payless

MortgageMamma wrote: »

On the plus side though, one factor which did make me think the company were trying for good practice is the fact that they offer tenants a 7 year tenancy with break clauses. ..

Did they take fiannce on the properties.. if so how would the lender consider this "7 yr tenancy " in the event of default- were they aware

MortgageMamma

No, they bought them for cash, AT LEAST 15% BMV and then built the legal fee's into the clients costs. I only worked with them for a couple of weeks, unfortunately a lot of their clients were beyond help by the time they were referred to me. I stopped dealing with the company when I discovered some unethical internal practices from a member of staff i was close too. The company were so desperate to buy houses they used to send "drivers" the their victims homes to drive them 30 odd miles to a solicitor to sign contracts immediately. I cannot help but feel that these rush tactics were to prevent desperate people seeking advice. I want the area to be regulated. and fast.