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

kennyboy66_2

ianmr65 wrote: »

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!!.

No one can add terms to a contract without both parties consent. You cannot infer from these terms, that the bank can make a margin call.

Your example of a £2k to £6k is clearly ludicrous.

I suggest you actually find out what onerous means when it comes to contract law.

neverdespairgirl

kennyboy66 wrote: »

No one can add terms to a contract without both parties consent.

Well the government can (-:

Otherwise, I agree with you. Anything that could raise the payment by £2k to £6k would have to be very carefully spelled out.

ianmr65

kennyboy66 wrote: »

I suggest you actually find out what onerous means when it comes to contract law.

Onerous means unusual, or complicated, and that should be pointed out in adavance of signing.

kennyboy66 wrote: »

No one can add terms to a contract without both parties consent.

Agreed, they don't need to tho the terms are already there.

kennyboy66 wrote: »

You cannot infer from these terms, that the bank can make a margin call.

Yes you can. The terms are vague and wooly. The definitions of the terms are vague and wooly. Also they are pretty one-sided in the banks favour.

As above if you can make voluntary overpayments, then the bank will find a way if it chooses, to demand mandatory over payments.

kennyboy66 wrote: »

l.

Your example of a £2k to £6k is clearly ludicrous.

Really... Bank A is in the !!!!!!. The day of reconning has arrived and all the sub-prime & masively over-valued btl rubbish on it's books is being re-valued by internal audit, based on the latest survey figures.
The holes in the balance sheets are become chasms. At the same time all the revenues coming of the back of the derivatives paper it has written on the back of these 'assets' is drying up, and all the paper it holds on the US subprime market is now basically worthless.
The lending institutions that hold the paper are making margin calls right left and centre. The bank still can't raise capital, is extremely illiquid and it's rights issue recently failed.

The head of derivatives, specialist mortgages, and credit, all get together... They decide something has to be done.

"Well it's only fair (says one in a scottich accent) if we are getting margin calls on this !!!!!!, and cannae meet them, we should pass that on... Time to invoke the nuclear clauses?"
"Och Aye... It do or die" says another.
"Buy to let's deed in the water anyway everyone knows thaat - none of the papers will gi'a hoot"
"Most of the landlords are english anyways, Alba gu bra... pass me that pot of blue paint Hamish... Ha Ha Ha"

This effectively kills BTL, as we know it, as all the other specialist invoke their occluded cluases, and repossesions rocket, as landlords are unable to meet the calls, nor sell up.. which forces the price of the units even lower.

The housing associations have a field day. They are buying up £300k units for £30k at auction, using goverment money, and converting to social housing forceing further drops......

Look at the title of this thread...... do the maths people!!

m00m00 wrote: »

I would like to see someone provide some proof of these mystical margin calls in BTL contracts.

why do people need to invoke them to show the folly of buying new builds when there's enough empirical evidence around anyway

Agreed but the markets only been tanking for four months or so.. when the HPC really beings to bite, and there is lots of super hard evidence for the drops in value: I suspect that the banks, or asset strippers, that then hold the BTL mortgages will be forced, or keen, to take the approach that i've humouously sketched out above.

m00m00 wrote: »

somewhat akin to lemmings near a cliff behaviour (and yes I do know that the lemming thing is a myth too)

Funny you should mention lemmings.... here's something i posted 2 months ago!!

http://forums.moneysavingexpert.com/showthread.html?p=9913311&highlight=lemming#post9913310

ianmr65

neverdespairgirl wrote: »

Well the government can (-:

Otherwise, I agree with you. Anything that could raise the payment by £2k to £6k would have to be very carefully spelled out.

Or very vaugely spelt out NDS :eek:

IveSeenTheLight

ianmr65 wrote: »

:
Originally Posted by kennyboy66
You cannot infer from these terms, that the bank can make a margin call.

Yes you can. The terms are vague and wooly. The definitions of the terms are vague and wooly. Also they are pretty one-sided in the banks favour.

As above if you can make voluntary overpayments, then the bank will find a way if it chooses, to demand mandatory over payments.

Mr Ian,

It would seem that despite numerous people some also saying that research has been done to dispell the margin call theory during an existing mortgage agreement, you still are not convinced.

All I can suggest is that you or anyone else who is not sure, should call their specific mortgage company and ask them specifically if a margin call can be made on the mortgage during the existing term and if so what section of the mortgage contract states so.

Then post any mortgage responses saying that margin calls can be done and highlight the contract section.

I had previously asked this question to my two mortgage lenders when margin calls were first muted on here and was advised it was not part of my contract

teabelly

New build flats were seen by developers as a way of pushing up house prices in cheap areas. Investors bought an entire building in Stoke. Not a single local bought. Alarm bells didn't sound. If I were an investor and no locals had bought I'd know they knew something I didn't! These flats are now being sold off at massive losses. Some are selling for under 70k when they appear to have been bought for 150k + Developers are annoyed that around here a new build 3 bed won't sell for 300k. They only sell around 150k -180k

You can blame prescott for this as he is the one that wanted all these flats built.

The vast majority want to live in a house, with a garden and at least one off road parking space.

ianmr65

IveSeenTheLight wrote: »

I had previously asked this question to my two mortgage lenders when margin calls were first muted on here and was advised it was not part of my contract

Mr ISTL... If i ring William Hills and ask them if they will honour a bet i have made on the Grand National they will say yes. Despite the fact that the law says they don't have too.

So if you ring your Mortage Company there is no way they will tell you they intend to make margin calls. Despite the fact that the contracts, that i have read, allow them to.

That does not mean they will. Or That they might. Just that they can.

I have spent my professional life negotiating multi million pound commercial arrangmements on the back of contracts. I can spot a one sideded , cover my a$$, if things go pear shaped, clause a mile off. The contracts i have read have those sort of clauses.

There is no way of testing them, as the mortgage companies have yet to invoke them. when and if they do we will see who was right. , as no doubt they will end up in court.

Untill then, i hope they are never invoked, but i fear they might be.

misskool

ianmr65 wrote: »

Mr ISTL... If i ring William Hills and ask them if they will honour a bet i have made on the Grand National they will say yes. Despite the fact that the law says they don't have too.

Bets are now a legal contract, Gambling Act (2005).
If you have a valid betslip from the shop, they will honor and pay out from the Grand National.

PasturesNew

FOUND ONE!!

Found something to link to that names companies that can have margin calls:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/14/cnmortgage114.xml

Buy-to-let landlords will have to raid their savings and inject extra capital into their homes, under an obscure clause in their mortgage contracts, if house prices continue to fall.

Both Bradford & Bingley and HBOS-owned Birmingham Midshires, the two largest buy-to-let mortgage providers, each with 20pc of the market, require customers to top up their initial deposits if falling house prices mean the size of their mortgage rises above 85pc of the value of the home.

Got fed up with the arguments... wanted to try to put flesh to the rumours.

Generali

Interesting. I rang B&B and specifically asked them whether their contract contained a margin call (and explained what a margin call was). They claimed it did not.

Having said that the article seems to imply that the mortgages with the margin calls attached were popular products but only available for a short period of time.