buy and rent back companies

[mariette]

Hi im new to the site so I hope im in the right place,
I wondered if anyone has any info on companies who buy your house and rent it back to you?
We are looking into doing this at the moment as a last resort, we are about to be repossesed , we have three young children who are settled here as they have lived here since they were born and are settled at school.
Are these companies who do this genuine?

[MrShed]

I do not know much detail about them. But bear in mind, that they CAN evict you if they so wished at a later date.

[Nightmare4banks]

mariette a few comments/questions:

1.Before considering renting back - Have you tried to remortgage your property or arrange a 2nd charge loan to clear the arrears so that a repossession does not occur?

Did you know that:

a.You can pay the contractual instalment plus the arrears over the term of the mortgage plus the monthly contractual instalment?

b.If you have arrears that are less than 2 months of monthly instalments in total,all possession proceedings MUST stop? How do I know?Been there and got the t-shirt!

If you need any help in calculating the amounts,send me a PM or post your figures here quoting:

1.Original Mortgage Term i.e.15/20/25 years.
2.Remaining Mortgage Term at the moment.
3.Monthly Contractual Instalment Amount.
4.Total Amount of arrears.

2.Regarding buy/rent back companies,a few comments:

1.They will only let you a maximum of probably 90% of the current value of the property.In some cases this could possibly not cover the mortgage debt.
2.Your situation will be no different to a tenant who has rented from a private landlord as Mr.Shed stated i.e. you could potentially be evicted should the company desire to do so.
3.If you have to surrender possession of your property,the mortgage company is obligated to get you the best price.

The precedent case for this is:

Skipton Building Society v Bratley & Another

(I have posted full details of a link to this case elsewhere.)

Basically - Skipton sold a reposessed property that had belonged to the above mentioned folks(GOOD ON THEM!) at a "rock bottom price" and they sued Skipton in negligence for the difference between the market value at the time less the price that was obtained and won taking the case to the law lords.

In conclusion,I feel that these sort of companies are very exploitative of people when they are most vunerable so please do not say you have been warned!

Try and find a better alternative solution if possible and we will help you here.

Anyway,I hope you find this information useful.

If you have any questions,just ask.