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

m00m00

that reads more like an SVR trap to me.

ie, you go onto punitive rates unless you are prepared to top your LTV up

much like Northern Rock 100% residential borrowers are discovering at the moment

abaxas

Generali wrote: »

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.

Today, I phone up abbey. Trying to get a 'statement of interest' out of them.

The indian bloke had no idea what I was talking about, so had to speak with his supervisor!

If you phone your bank, expect to be spoken to, by some-one who has no idea what they are talking about.

brit1234

abaxas wrote: »

If you phone your bank, expect to be spoken to, by some-one who has no idea what they are talking about.

Or your internet provider.

Agh nearly tore my hair out with how bad orange had become, constant calls to a call center where they could not deviate from the limited card subjects.

I think we will find out the truth about margin calls in the next few months as prices collapse. Even if they have been phased out ( i doubt it) buy to let landlords are going to get crucified when they have to re-mortgage especially if they have release equity which is no longer there.

m00m00

'offshoring'

another wonderful innovation to go along with securitisation

teabelly

Mortgage express had them on a product which revalued your property each year so you could drawdown any growth in value. It was then stated on their IFA site that if the value went down they wouldn't ask for an equity top up but drawdowns would be frozen.

The equity top up is usually only invoked on remortgage time. Invoking it at any other time would be suicide for lenders as LLs aren't going to be willing to give them a big chunk of equity which could prevent them from paying the mortgage as it stood. The more money in cash you have to cover short falls in mortgage payments the safer you are. Tying it up as capital is a quick way to end up bankrupt.

BobProperty

Sorry PasturesNew but that article was one quoted previously and "debunked". Read the article and it says "The revaluation is done when the borrower remortgages and, unlike the mainstream market, is required even if the landlord does not change lenders."
So, not when the discount ends, not when the LTV changes because the value of the property has dropped, not when the bank finds itself short of money, but when the borrower remortgages.
As I said previously, sloppy journalism or scaremongering.

Generali

Unlike a residential mortgage a BTL mortgage is a business loan. I suppose it's possible that after a certain period the loan needs to be rolled over at which point what amounts to a margin call will kick in.

If nothing else, people with interest only BTL mortgages will be expected to repay the capital at some point. At that far distant point they will have to come up with the cash one way or another.

That may seem like a very long way off but if you bought a place on an interest only mortgage in Tokyo in 1989 then you'd be likely to be sweating by now - no inflation to chip away at the debt and only 7 years left now to pay off the principal sum.

IveSeenTheLight

BobProperty wrote: »

Sorry PasturesNew but that article was one quoted previously and "debunked". Read the article and it says "The revaluation is done when the borrower remortgages and, unlike the mainstream market, is required even if the landlord does not change lenders."
So, not when the discount ends, not when the LTV changes because the value of the property has dropped, not when the bank finds itself short of money, but when the borrower remortgages.
As I said previously, sloppy journalism or scaremongering.

Beat me too it Bob,
Still, no-one has been able to show a policy or confirm a margin call clause for existing mortgages.
Having to increase deposits due to a valuation at re-mortgage is an SVR Trap, not a margin call. The LL or OO could remain on the SVR if that is the best option.

John_Pierpoint

m00m00 wrote: »

'offshoring'

another wonderful innovation to go along with securitisation

Northern Wreck had a subsidiary called Granite (Hard rock?) in the Channel Islands
(sloppy journalism as I cannot remember which one).

What was the scam in having your securitised mortgages owned by a foreign subsidiary?

Nobody has ever come up with an explanation for spending oodles of shareholders' money setting up such arrangements.

m00m00

I was more referring to the general offshoring of customer service jobs (ie call centres)

quality sacrificed for cost savings which no reference to the greater societal issues.