Flat lost 70% in 2 years (now includes margin call link in post #40)

neverdespairgirl

PasturesNew wrote: »

And what's going on with the decor? Looks like UR NAN + Barbara Cartland or saucy Mills & Boon books (pink wall).

Lovely description - but my Granny NEVER lacked style as completely as those photos.

Well over half a million for a 2 bed flat in the !!!! end of nowhere. Bloody hell!

ianmr65

PasturesNew wrote: »

A large investor, having built their portfolio from advice and techniques they learnt at property investor clubs, will have no way to raise any additional funds. The higher the stack of cards, the more dramatic the fall.



Not if you can't afford the repayments at all.

Or if your BTL mortgages have margin clauses which allow the lender to ask for capital repayment if the asset value falls!!..

I imagine the cash strapped bank's laywers are poring over these clauses as we speak :eek: It would be wise for our BTL friends to do the same..

IveSeenTheLight

PasturesNew wrote: »

Gone seemed to be the days of regional variations.

Rest assured, there are still regional variances.

Just check out Nationwide or Halix reports each month / quarter for proof.

In fact, I know you now know and advise others to use the HBOS spreadsheet http://www.hbosplc.com/economy/includes/19_01_08PostTownsData3.xls which also shows regional variances

ianmr65

iyiarz wrote: »

You would be better keeping it and letting the market recover a bit before selling, even if it was still at a slight loss.

...

Yep, keep a depreciating asset for the next 8-10 years, in the hope it will recover it's former price. Good investment advice!!

I'm pretty sure that by 2020, 'most' house prices will have recovered to where they are now.

I seriously doubt that many new build flats ever will.

Most of them will be in quasi- public ownership by then, and being used as social housing... as i think the housing associations have already started a mass buy up campiagn for the most distressed stock..
Once the properties are filled with 'hard-working low-income families', they will hardly be the desirable residencies they once were. :cool:

IveSeenTheLight

ianmr65 wrote: »

Or if your BTL mortgages have margin clauses which allow the lender to ask for capital repayment if the asset value falls!!..

I imagine the cash strapped bank's laywers are poring over these clauses as we speak :eek: It would be wise for our BTL friends to do the same..

Has this not been done to death?
Nobody has been able to show any marginal clauses in mortgages.
When people attempt to do so they end up showing if they were re-mortgageing. Nothing about margin calls during an existing mortgage arrangement

ianmr65

IveSeenTheLight wrote: »

Has this not been done to death?
Nobody has been able to show any marginal clauses in mortgages.

Really? well i didn't try very hard and have found something that looks suspiciously like one:

From the UCB (nationwide's btl 'specialist' ) mortgage terms

"We may set and vary from time to time the monthly payments to reflect:

(i) the current interest rate applicable to the debt;

(ii) the debt;
(iii) the current payment method;
(iv) the term;
(v) your chosen monthly payment date.

Any change in monthly payments will be notified to you giving you three days written notice of our intention to do so. Alternatively, you and we may agree that your monthly payments will be reviewed and (if appropriate) changed periodically, forexample annually, in which case any notice of change in your monthly payments will be sent to you a reasonable time before the start of each period "

Looks like a huge provision for a margin call there, being as the clause is one way, and encompses the whole debt.

eg £300k loan 20 years, 6%..
value drops by 66% to £100k, and flat is sitting empty.

UCB notice this... think you won't be a customer for much longer and so they write to you with three days notice saying something like :

Dear Sir

Subject to our clause 3.9 we will now be increasing your monthly payments from £2000 to £6000. None of the other conditions of the mortgage contract are affected.....

Other specialist mortgage contracts go much further, in actually allowing for annual reviews, when the LTV changes!!.

:eek: :eek: :eek:

IveSeenTheLight

Taking your five points: -

(i) the current interest rate applicable to the debt;
Naturally, if you have a linked tracker or discounted and the interest rate changes then the payments will change with the interest rate . Nothing about LTV margin calls here

(ii) the debt;
I regularly make overpayments, reducing my debt and the mortgage companies prefer to adjust my payents to keep the same amortization period thus pay more interest to them than I need to. This is what this means when referring to the debt. Nothing to do with LTV margin calls

(iii) the current payment method;
I'm not entirely sure about this but lends to believe it means depending how you pay i.e. standing order, direct debit, cheque, cash, credit card etc. Nothing to do with LTV margin calls

(iv) the term;
Similar as I mentioned in (ii) if the amortization period changes, so will the payments. Nothing to do with LTV margin calls

(v) your chosen monthly payment date.
Any change to the payment date, will affect the amount of interest you owe and thus the amount you have to pay. Nothing to do with LTV margin calls

Feel free to post links / examples of where it specifically calls for the LTV to be maintained on the existing mortgage

PasturesNew

IveSeenTheLight wrote: »

Rest assured, there are still regional variances.

Just check out Nationwide or Halix reports each month / quarter for proof.

In fact, I know you now know and advise others to use the HBOS spreadsheet http://www.hbosplc.com/economy/includes/19_01_08PostTownsData3.xls which also shows regional variances

OK, maybe I didn't describe it well. But, within any one town you can find 3-beds in the council estate and 3-beds in the nice estate at the same prices.

But across the country new flats all seem to be priced in LA LA land.

ianmr65

IveSeenTheLight wrote: »

Taking your five points: -

(i) (ii) the debt;
I regularly make overpayments, reducing my debt and the mortgage companies prefer to adjust my payents to keep the same amortization period thus pay more interest to them than I need to. This is what this means when referring to the debt. Nothing to do with LTV margin calls

They're hardly going to have a big sign on the clause saying this is the LTV margin call bit!!.... but if your contract's 'debt' clause allows you to make voluntary overpayments, then i bet it allows them to demand mandatory overpayments, otherwise known as margin calls.

This ucb specific clause goes even further as it basically gives them the right to make margin calls at will!!


Don't forget these are business to business loans... not subject to FSA consumer protection , and consumer legislation that most mortgages fall under. Hence the much more onerous terms!!.

PasturesNew

To see a margin call in the contract I'd expect to see a specific statement identifying the LTV.

I think I have seen where somebody did copy/paste one somewhere, but to date I've never heard of anybody who has had a margin call by a lender.