Mis-sold buy-to-let mortgages

lizbet21 · 13 May 2010 at 11:04AM

I am pleading for any advice! I was introduced to a broker through a friend who offered for me to purchase buy-to-let properties with a minimal deposit. It seemed too good to be true and naively I fell for it and bought 3! Warning bells should have rung whereby no paperwork to read was available until weeks/months after I had purchased the property and figures that I was advised about were clearly wrong.

To cut a long story short I have financially suffered with these purchases ever since and have found others in the same predicament with the same broker. Reading through all the paperwork now, it also appears that bridging loans were taken out to the benefit of the broker which of course has resulted in higher loans for myself.

I am angry with the broker for blatantly misadvising and mis-selling me this mortgage, and also furious with myself for fooling for this and in effect placing myself in financial and emotional ruin.

Does anyone know what I can do in this situation or a company that I could contact for some advice?

Thanking you in advance

dunstonh · 13 May 2010 at 11:18AM

Does anyone know what I can do in this situation or a company that I could contact for some advice?

Buy to lets are a commercial transaction that is not regulated. You pay your money and you take you chances. However, I will cover a couple of your points.

Warning bells should have rung whereby no paperwork to read was available until weeks/months after I had purchased the property and figures that I was advised about were clearly wrong.

You cant exchange contracts and buy the property without the contract. The contract would have contained the figures. So not seeing the figures until after the purchase doesnt seem possible.

it also appears that bridging loans were taken out to the benefit of the broker which of course has resulted in higher loans for myself.

One assumes that you knew how much you were paying for the properties and how much you were borrowing?

Were the properties sourced through the same business as the one that did the lending? If so, that is a fairly common property scam (not quite scam enough to be considered illegal but not far from it as it preys on peoples greed and low knowledge).

lizbet21 · 13 May 2010 at 11:48AM

Thank you for that info.
Solely the contract was made available for me to see with the. When the rest of the paper work came through ie. survey and valuation, key facts (paperwork that should have been seen before the contract was signed), it was clear that the the bridging loans had been added without my consent.

It all went through quite quickly, which in hindsight was the problem without me checking all the facts.

Are you saying that there is nothing I can do about this now?

lizbet21 · 13 May 2010 at 11:52AM

Sorry, I also forgot to add, things like what I was told the service charges and ground rent were was incorrect. It was 50% more!!

Conrad · 13 May 2010 at 12:00PM

Your only option would be to pursue the broker through the small claims court, requesting a ccj against his name for the sum you feel you are entitled to. To do this you do not need a solicitor - I find the small claims court staff / helpline people, very helpful.

A few tips;

1) Do not use emmotional language - it goes against you

2) Use clear bullet points - each with a space below - avoid rambling diatribe

3) Keep it to the point and be VERY CLEAR in your mind the exact grieveinces you have - do not use coverall statements such as "I feel I have been misold" - instead try things like - "I did not recieve any paperwork detailing 'x;".

You need to quatify the amount you seek - make sure its fair and meaningfull and relates to your 'loss'.

You might want to involve trading standards too - as things like secured loans are covered by the brokers consumer credit license.

If I were you I'd basically hope to scare the broker (in a letter to him say you will seek to have any ccj secured on his peronal property) and hope he might just settle out of court.

It wont be easy but worth a go for sure.

Conrad · 13 May 2010 at 12:02PM

PS - dont ramble on about irrelevant things like ground rent - the ground rent is always variable and often unknown - forget that one - its nothing to do with the broker or anyone else.

Conrad · 13 May 2010 at 12:05PM

Also contact the secured loan company and speak to someone high up and ask for the compliance officers name / md's name and write to them using SPECIAL DELIVERY post outlining your complaint. Indeed say you believe thier own systems were not robust to ensure suitable outcomes for consumers as you ended up with loans you knew nothing about. Just because such loans are not FSA regulated does not mean they can ride roughshod over peoples basic rights to fairness.

PS - I well know these conmen brokers - lots about who got involved with these frauds. Dunston is right in that you probably did sign / see paperwork but I'd bet the broker just quickly said sign here, and then filled it all in later - or just didn't show you the 'meat' - any conman can get away with this where the client is unsophisticated and trusting.

FraudBuster · 13 May 2010 at 12:12PM

You may like to do a search of this site for other victims:

http://www.singingpig.co.uk/forums/

Leon_W · 13 May 2010 at 1:08PM

The OP is saying that they saw no paperwork until after the purchases had gone through. That is just simply impossible unless it was a carefully conceived fraud.

Mortgage lenders always send offers to the applicants home address. Are they saying that they were not interested in reading them or finding out where the offers were ? Unbelievable.

If bridging companies are involved they will need signed paperwork and deeds. Those loans need to be secured against something !. Any bridging needs solicitor input, one for the lender (usually in house) , one for the borrower.

The purchase solicitors also have to advise and report on the contract and mortgages. They'll also need a completion statement confirmed as correct by the purchaser. This didn't happen either ?

So now we have bent mortgage lenders, bent brokers, bent bridging companies, at least two sets of bent solicitors all colluding together not to inform the purchaser, send any paperwork or get anything signed at all. That is just pie in the sky.

I'll tell you what the situation really is. Someone thought they would get rich quick on the BTL bandwagon, got burnt, and is now scrabbling around looking for someone to blame.

dunstonh · 13 May 2010 at 1:41PM

Are the issues with the mortgage or the property? We seem to have two things going on here.

So far, this seems like one of these situations where you are told to invest in property as you cant lose..blah...blah and they they can provide you with some special property deals and can use their own mortgage broker to get the mortgage. Typically, the properties are over priced and the fees all the way through as expensive. However, as an investor and not a private individual you dont get the same level of protection.

lizbet21 · 13 May 2010 at 1:48PM

To Leon W - I came on here for advice not a party political broadcast!

99% of what you rambled on about in fact did not happen and as mentioned has happened to others also. An extra loan was taken which may have been a bridging loan or I have been informed, could have also been a cash back. Whatever, the case, it was a loan I was unaware of. The same solicitor was used (there were not two sets of solicitors) and these were part of the brokers package.

Anyway, as noted before, there are PLENTY of bent people in your industry, and I, as mentioned before came on here for advice to MY situation.

Thank you for your inaccurate analysis, but it hasn't been helpful. Sorry.

Mis-sold buy-to-let mortgages

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