Tilly V mortgage express repo

[Ell-enn]

Hi Tills, difficult decision - I guess all you can do is work out the sums to see if there would be any money left over if you sell but you have estate agents and solicitors fees and the cost of moving. If you sell and rent back you've no costs, but no equity and assume rent would be less than mortgage you are paying? If you let them repossess it you'd more than likely end up with no equity and worst case scenario - owing them money. That looks like the only 3 options (unless you have a plan D?)

 

 

Ell x

[ja-de]

Hi Tills, Leeds City Council works the same way as saintly told you, a bid system, but with the exception of you have to do it by text message. So I suppose the high priority etc don't exist, unless it depends on your circumstances at the time. Very confusing to me these days lol.

I totally agree with everyone though, your doing a grand job.

[TideTurner]

Hi Tills,

 

Knowing you, I know you like your travels. I haven't seen a suggesdtion for down-sizing here, or relocation. I reckon you'd love it up north, and you could reduce the mortgage considerably. That would give you time to plan your next move and keep your equity. Just a thought.

 

DO NOT sell at 75-80% you will regret it later.

 

Tide

[MacBoy]

Remember what we discussed tonight Tils and keep positive

[**Tilly**]

Hi Tide

 

The thought had crossed my mind, to relocate but if i sell they are going to want the whole of the loan back oh gawd confused again

[TideTurner]

Yes, but if you downsize your monthly repayments will be less and you can still stay in a home you can call your own. I'd hate to think the sharks were going to get 25% of your property, albeit on paper. Fight, fight, fight, delay delay delay, and get the best price possible if you sell. You don't know what's around the corner!!

[**Tilly**]

Hi Tide

 

I am fighting well trying sent you pm

[Bona]

Ellen is right if you get repossessed sepecialy at the moment you could lose yur house any equity have your name on the repossession register ( affects credit) and end up being chased for shortfall surley to be able to rent your home back and be shot of debt and worry for a few years so you can look at starting again must be better than years of paying back a shortfall I dont say it the best option but it might be the best of the worse senario's

[**Tilly**]

HI bona

 

I see what you are saying,and yes it makes sense,i am going to have to sit down and

do some more reading me thinks,time isn't exactley on my side at the moment,

[caro]

It really depends if selling your house cheap at such a reduced price will give you enough money to pay off the whole mortgage. If not you'd be paying rent and still owe the mortgage company money. IMO you need to maximise the amount you sell your house for.

 

I have heard of some of these companies starting off with a reasonable rent, and then increasing it massively later so tenants can't afford it, tenants get into arrears, evicted, and then the company can sell it for a profit. This could especially be a problem when the housing market is stronger, and these sharks can make a killing.

 

Be very wary.

[**Tilly**]

Hi caro

 

Im not going to rush into anything, if and when the time comes and they do repossosse

and i haven't found anywhere to live, we will go to my sisters not ideal i know,but needs must,just thinking ahead here.

[Ell-enn]

Hi Tills, glad to hear that you have got somewhere to go if need be- so if I were you I would discount the sell and rent back option as that would be a very last resort. Hopefully, if MI do issue a warrant for eviction the judge will allow you to stay in the house while it is sold with lower payments.

 

Lx

[ja-de]

It'll be very good of your sister to take you in, but it'll be like a nightmare later on; as everybody has their own way of doing things, which then causes arguments galore. We stayed at my parents first & then we went to my mother in laws, before we could move into our own house. It makes it feel as though you are constantly watching what your doing, & trying to prevent rows, & because it's not your own home, you just can't settle in properly.

Keep phoning or calling into your local council offices, & let them know you are going to need somewhere to live, & they will have to give you somewhere, as you haven't deliberately made yourself homeless.

[**Tilly**]

It'll be very good of your sister to take you in

This just an option jade, but there also a reason for it, she is also having a bad timeat the mo her O/H had a stroke, so by me moving in long or short term i can

help care for him and give her the break she needs,whether it will work who

knows we will have to see.

but it'll be like a nightmare later on; as everybody has their own way of doing things, which then causes arguments galore. We stayed at my parents first & then we went to my mother in laws, before we could move into our own house. It makes it feel as though you are constantly watching what your doing, & trying to prevent rows, & because it's not your own home, you just can't settle in properly.

Keep phoning or calling into your local council offices, & let them know you are going to need somewhere to live, & they will have to give you somewhere, as you

Thanks jade but i learnt a long time ago nobody has to give you anything, but yes i will get on to council again,

 

haven't deliberately made yourself homeless.

 

Thanks for your support hun

[kennythecelt]

Tilly, you have a pm.

[kennythecelt]

Sell to Rent/ Rent Back

 

Unlike equity release, sell-and-rent-back is not at present regulated by the FSA although this situation may change in the future. A result of this is that unlicensed people can offer these schemes and they have not been through the rigorous checks and regulation that FSA-authorised practitioners have to comply with. Anyone should bear this warning in mind.

 

 

The folowing links give mainly negative feedback on rent back. I could find nothing positive on the searches I made. I will add these links however if anyone can find one.

 

1) Link to This is Money- general information 20/06/07

(note links at bottom of page)

Should you sell then rent back your home? | This is Money

 

Mortgages and homes guide: Sale-and-rent back schemes | This is Money

 

 

2) "Sell to rent boom as buyers back off": The Guardian 17/2/08

Sell-to-rent boom as buyers back off | Money | The Observer

 

 

3) BBC Money Box audio

BBC News Player - Sale and rent back

 

"Controversial "Sale and Rent Back" schemes are under pressure to sign up to a voluntary code of practice.

 

Homeowners who are failing to meet their mortgage payments are offered the chance to sell and rent back their property.

Some companies have been accused of charging inflated rents and not offering a secure tenancy. The National Association of Sale and Rent Back (NASARB) and The Property Buyers Association (PROBAS) are both devising codes of practice which they hope will protect consumers from rogue providers."

 

 

4) Ellesmere Post and Neston Burgh Council

Beware of ‘sell and rent back’ arrangements 11/12/07

 

Caution urged. Housing Benefit difficulties.

 

 

5) BBC Watchdog (slightly older 10/10/06)

 

BBC - Consumer - TV and radio - Sell-to-rent-back companies

 

 

6) Daily Mail 3/9/07

 

Struggling homeowners warned to beware 'rent-back' deals | the Daily Mail

 

7) BBC 9/05/08: Repossession figures ignore many in trouble

 

 

"A growing number of people facing repossession are selling their homes to buy-to-let investors through so-called "sale and rent back" schemes, also known as "mortgage rescue". As prices have risen, it has become harder for buy-to-let investors to obtain properties at the right price."

 

 

8) BBC Radio 4 Money Box 16/2/08: Sale and rent back rip-off claim

 

BBC NEWS | Programmes | Moneybox | Sale and rent back rip-off claim

 

 

"These people otherwise would be repossessed and in turn would be homeless and need re-housing. [instead] they can sell and rent back. They can release equity. And often the rental payments they pay are far less than their previous mortgage payments."

Adam Sampson agreed that the principle of sale and rent back was sound. But he said Shelter came across many problems with it.

Undervalued "People are being ripped off. We are seeing people who are getting only 50% or 60% of the value of their homes instead of the 70% to 90% they should be getting. Many of the promises that are made that people can stay in their homes for the rest of their lives are not being honoured."

 

 

9) The Telegraph: 14/04/08 Watchdog to regulate "sale and rent-back"

 

Watchdog to regulate 'sale and rent back' - Telegraph

 

"Nearly all the firms claim that they are the answer to people's financial problems but the Office of Fair Trading, the Government watchdog, which has been investigating the unregulated market since last month, is becoming increasingly concerned with some of the companies promoting the schemes.

A spokesman for Citizens Advice said: "We are seeing increasing problems with sale and rent back.

"Our concern is that people are in a vulnerable position when they have been invited to take these decisions.

"We know of examples of homes being bought for 40 per cent less than the market value. And claims that people can stay in their property for life are just not true. Most short-hold tenancy agreements run for just six months."

 

 

10) BBC Inside Out West Midlands 25/04/08: Repossession Misery

 

BBC - Inside Out - West Midlands - Repossession misery

 

"But what happens when the sale-and-rent-back companies can’t pay their own mortgages and their houses are repossessed by the bank?"

 

 

11) BBC 4/07/07: Stretched homeowners eye rental option

 

BBC NEWS | Business | Stretched homeowners eye rental option

 

 

"From a seller's perspective, there are plus points as well as drawbacks to sale and rent back. The seller gets urgently-needed cash to pay off debt and does not have the financial black mark of repossession on their credit file."

 

 

12) http://news.bbc.co.uk/1/hi/business/7400304.stm

 

"The Office of Fair Trading (OFT) is to study whether people facing repossession are adequately protected in so-called "mortgage rescue" schemes.

 

Householders in difficulty are offered a quick sale of their home at a discount by buy-to-let investors and in return become a tenant in the house.

Consumer groups have called for regulation of these schemes, also called "sale and rent back". "

 

 

13) http://www.oft.gov.uk/news/press/2008/62-08

 

The OFT has launched a market study into the sale and rent back sector.

Sale and rent back (also known as 'sale and lease back') arrangements involve individual homeowners selling their property at a discount in return for the option to remain in the house as a tenant. These arrangements may be taken up by consumers in financial difficulty facing possible repossession of their homes.

 

 

14) BBC Politics Show 18/04/08: Help for Homeowners

(This relates to Wales but hopefully something similar in England)

 

BBC NEWS | Programmes | Politics Show | Help for homeowners?

 

"The Government will cut red tape to enable housing authorities to operate "sale and rent back schemes".

 

 

15) Daily Mirror: Robbed of My Home: 21/05/08

 

Robbed of my home - Mirror.co.uk

 

"Among the victims is Debra Ford, 48, who is disabled with low blood pressure.

She sold her four-bedroom house in Swansea for £145,000 in June last year to "sale and rent back" firm Home Assured.

She hasn't received a single penny for it yet and has since discovered it was worth at least £170,000 at the time.

Debra says: "They paid off the £84,000 I owed on the house.

"They then deducted all sorts of charges including six months' rent and haven't given me anything for it."

Home Assured remortgaged the house, defaulted on the payments and it has now been repossessed."

 

 

16) Daily Telegraph 24/05/08: Buy-to-let landlords profiting from misfortune

 

Buy-to-let landlords profiting from misfortune - Telegraph

 

 

17) Previous thread(s) on CAG

 

http://www.consumeractiongroup.co.uk/forum/residential-commercial-lettings/118503-anyone-heard-repossession-angels.html?highlight=rent-back

 

http://www.consumeractiongroup.co.uk/forum/general-consumer-issues/122796-sell-rent-back-schemes.html?highlight=rent-back

 

http://www.consumeractiongroup.co.uk/forum/general-consumer-issues/120295-home-buying-companys.html?highlight=rent-back

 

http://www.consumeractiongroup.co.uk/forum/mortgages-secured-loans/98734-firmsthat-buy-your-house.html?highlight=rent-back

 

http://www.consumeractiongroup.co.uk/forum/general-consumer-issues/87468-can-anyone-advise-housing.html?highlight=rent-back

 

http://www.consumeractiongroup.co.uk/forum/residential-commercial-lettings/64319-buy-rent-back-companies.html?highlight=rent-back

 

 

Issues with Sell to Buy/ Rent back:

 

 

• It may seem attractive as a last option to people in a desperate situation, but the purchaser also knows this is a last option and that stacks the cards heavily in their favour. The purchaser is really a property speculator, interested in profit.
  
• Contract needs to be very closely scrutinised, by an expert as it will be designed to protect the interests of the purchasing company, not the seller. This needs to include the tenancy and rental side, repair responsibilities etc. These transactions are not regulated the FSA and the OFT is currently mounting an investigation. There are instances of people being evicted when rental agreement is due for renewal. There may well e very hefty rebnt increases.
  
• Sale price is generally only a maximum of 70% of valuation, sometimes much less. If there is little equity in the property, then debt can still be outstanding, after the sale, which remains the responsibility of the seller to repay in addition to any other debts secured on the property. There are instances where negotiations being deliberately protracted with the purchaser trying to reduce the price as contract nears completion. If you have rent and are paying back what is left of the equity, can it be afforded?
  
• If there is little equity, priority should be to maximise the sale price, to pay the mortgage company as much as possible otherwise debt problem may carry forward.
  
• Tenancy is initially for maximum of 6 or 12 months on Assured Tenancy basis. Rents can rise considerably thereafter. There are reports of houses being bought and subsequently flipped over. A major plus is that there may be no legal fees (check), no estate agent fees and no removal costs at this point in time. Likewise, it enables you time to stay in the same home.
  
• Property speculators like this as an investment because it is unregulated and because they are in control and can make more money than buying a normal market property. There is potentially more profit here for them than buying property at auction.
  

Edited May 30, 2008 by kennythecelt
update info and links etc

[**Tilly**]

Thankyou Kenny

 

I Have just read the first link, there is deffenalty more against than there is for,

[kennythecelt]

Tilly, I have just started the post and I will provide further info on the above post. It will just take a bit of time.

 

This could still be a serious option. If you are forewarned, some pit falls can be avoided.

 

I will also be looking at the possibility of a housing association buying the property, but don't get your hopes up on that one as my knowledge of public sector housing is Scottish, not English and there are differences.

[MilkTrayMan]

When renting a property in the private sector in England, it is common to initially be given an Assured Shorthold Tenancy of 6 months only.

...After this time the Tenancy reverts to being a Periodic Tenancy.

 

It HAS been known for some unscrupulous Buy 'n' Rent Back firms to evict Tennants after the initial 6 months has elapsed.

...This is despite promising 'the world' to them prior to the sale of the house.

 

While not suggesting that this is an industry-wide practice, it is nethertheless something to bear in mind that COULD happen.

 

 

...

[**Tilly**]

phew im back had power cut lol

 

Thanks Kenny going to go and read the links, won't get my hopes up promise

 

MTM

Thankyou for your info,i will take heed, i read and listen to what erverybody has to say and i value all of your advice, it might take a while for me to get my head round it all but i get there in the end

 

Tills

[caro]

Shelter seem to have quite a bit of advice that might prove useful to you Tilly.

 

Shelter: Emergency help and advice

 

Shelter: Evicted or asked to leave

[**Tilly**]

Thanks caro

 

Next week i have 3 appointments, council yet again, thursday morning, welfare rights thursday afternoon, and the civic centre to put in application for homeless. so fingers

crossed something might pop up (not holding my breath)

 

 

[caro]

I suggest that you also see your doctor again and ask if s/he can provide a letter telling the judge how this is having a bad effect on your health. It can't do any harm.

[**Tilly**]

I new there was another appoinment somewhere, i have a doctors appontment early thursday morning

[kia]

some good advice there from kenny tills id think long and hard about that idea cos cant say its not crossed my mind too quick money but youll lose alot too xxkia