Mortgage Express appoint LPA Recievers Walker Singleton to scare tenants off!

[diddled]

So they only paid out for about 22 weeks when the house was unoccupied for 60 weeks?

 

Was this insurance part and parcel of your MX mortgages, or was it a separate insurance you took out?

[fdeesea]

no this is insurance WS carry on my properties. I presumed it is the same for all ME customers who had WS appointed as LPA's

[diddled]

I'll speak to chillin about this, its the first Ive heard time Ive heard about this.

[chillinlong]

Hey all,

The only rental insurance I know of is when the properties are let a rental guarantee is sometimes taken with it and is usually 6 months guarantee. WS may have taken a 12 month policy on a new letting with an agency perhaps?

 

Is the kind of insurance you are talking about Fdeesa?

[caro]

Yesterday a couple of fellow caggers and I went to a consultation with the Independent Banking Commission organised by Which?, and hosted extremely well by the financial journalist Paul Lewis.

 

http://www.which.co.uk/campaigns/personal-finance/your-voice/get-involved/

 

The night before I read a post by chillin which made me feel utterly helpless and wished I could do something. A plan had already been hatched to hand over a file with some pretty damning info about another bunch of ne'er-do-wells to Paul Lewis and to the Chairman of the Commission, Sir John Vickers, who also used to head up the Office of Fair Trading.

 

On the spur of the moment, with little or no time to prepare properly I added the following.

 

 

2. Land Property Act Receivers

 

Buy to Let landlords falling behind in mortgage payments, particularly with Mortgage Express which is no longer taking on new business, find their properties being put in the hands of LPA receivers who seem to routinely:-

 

seem to mismanage their properties.

scare off tenants.

allow properties to fall into disrepair.

don’t allow landlords to let properties out themselves to ensure that they can cover the mortgage with rent payments.

properties ending up in further arrears leading to repossession.

shortfalls rolled up with other BTL mortgages the landlord has leading to further repossessions.

 

Landlords seem to have no legal way to stop any of this, and find themselves on the wrong side of the law if they try to take action to remedy the problems themselves. I enclose just a couple of pages of a thread from www.consumeractiongroup.co.uk with recent posts on this issue, which demonstrate the issues people have with LPA receivers and the desperation that their actions cause on people’s lives.

 

On reading this back I realise I didn't word it brilliantly, and my printer gave up the ghost after printing the necessary number of copies of the covering letter above, but rather embarassingly, just one copy with a couple of pages of the thread. I was worried I would miss my train and I didn't have time to give this the attention it deserved. I believe that Paul Lewis has been contacted before on this issue with no result, so I decided that it was perhaps best to let Sir John have the benefit of reading the posts from this thread because he's the one with influence in high places.

 

I included my contact details.

 

My fellow caggers accomplished the mission and successfully got our envelopes to Sir John and to Paul. We were assured that the Commission would be reading everything that came from the event, so they will at least read the above, and the extract from this thread which had a mixture of both factual events and a little insight into the effect this has on peoples lives.

 

 

We were assured that everything that came from the event would be read by the ICB, so I just thought I'd let you know that this will be seen. Whether it makes a difference is another matter, but I am confident that it will be read.

Edited May 25, 2011 by caro

[fdeesea]

Hey all,

The only rental insurance I know of is when the properties are let a rental guarantee is sometimes taken with it and is usually 6 months guarantee. WS may have taken a 12 month policy on a new letting with an agency perhaps?

 

Is the kind of insurance you are talking about Fdeesa?

 

as far as I know ordinary landlords cover

here is a quote from an email from Fraser Hallam at WS "With regards to Galloway Street we had further works carried out and the property is now on the market for sale. The loss of rent cover we received was for an amount typical for this type of property."

 

In letter stating they were appointed receivers by ME there was a line that said they insure the properties and I should/could cancel mine.

[fdeesea]

hi all

I found this letter amongst some papers

this in different to what I was told via phone calls

I was told that I will not get any properties back while there are arrears and even when cleared it would be up to ME to decide wether to return or not

this letter seems to say different would this be a legal contract?

 

Our Reference: H129/MISC01

17 March 2009

MR

Liverpool

 

 

Account Number: five were here

I am writing to you regarding the above mortgaged property. These accounts are currently

with the Law of Property Act Receivers (LPA) Walker Singleton LPA

The LPA receivers are instructed to collect the rental income direct from any tenants and

forward the net rental income directly to the mortgage account.

I am writing to you to see if your are able to make contributions yourself in order to clear

the arrears. The benefits of clearing the arrears are as follows.

• If the arrears were cleared we would hand the property back to your control and

revoke the receivership

• The £30.00 a month administration charge which is applied to your mortgage

capital balance would cease.

• Your credit rating would not continue to be affected.

Please contact me as a matter of urgency on 08708507536 to discuss the arrears on your

account.

Yours sincerely

?P

Miss E Lygo

Collections Officer

Credit Collection Department

Edited May 26, 2011 by fdeesea

[chillinlong]

Hi Fdeesa,

 

You really need to clear your personal details off your last post for your safety...

 

Maybe it is worth asking what kind of insurance was in place for the loss of rent?

 

Also, it is interesting in the letter it states the benefits of clearing the arrears "They will hand the property back". Whereas one of my portfolio has no arrears and they have said they will not hand back. And I think they have also said to you they may or may not hand properties back.

 

Thanks again Caro, really appreaciate your help and I know you have tried. It would have been interesting to tell them some portfolios have no arrears yet they still will not hand back and are waiting until empty and then try to sell.

[fdeesea]

I have asked for details of insurance for many reasons nothing has been forthcoming.

I served a DPR and didnt get all I should have.

[chillinlong]

I would also get rid of teh reference number at the top of the letter.

 

It is outrageous that they refuse to give us the info. Believe it or not they (LPA) are supposed to be acting on our behalf even though in favour of the lender so really they should be working with us and providing the info.

[fdeesea]

I totally agree.

Do you happen to have a copy of the Mortgage Express BTL 2007 terms and conditions booklet?

or a way to get them

 

thanks

[patrickq1]

Well done Caro ,this is good news only in the fact that at least it can be highlighted and also the MP who has tabled a motion about the LPA and their despicable behavior ,the more get to find out the merrier

thanks Caro

patrickq1

[chillinlong]

Fdeesa, if you PM me your email address I will email you a copy of the Ts and Cs of 2007.

 

Dont forget your reference number is still showing on the letter.

 

Hear hear Patrick, lets keep hoping.

[chillinlong]

http://www.ukar.co.uk/

 

The newly formed company now managing Mortgage Express and Northern Rock...

[Ed999]

So they only paid out for about 22 weeks when the house was unoccupied for 60 weeks?

 

Was this insurance part and parcel of your MX mortgages, or was it a separate insurance you took out?

 

 

It is not uncommon for an insurance policy to include a provision for a cut-off date, whereby the insurance claim is only valid for a specified number of months of loss.

 

Twenty two weeks sounds like a cut-off point of 5 months.

[Ed999]

it is interesting in the letter it states the benefits of clearing the arrears "They will hand the property back". Whereas one of my portfolio has no arrears and they have said they will not hand back. And I think they have also said to you they may or may not hand properties back.

 

Thanks again Caro, really appreaciate your help and I know you have tried. It would have been interesting to tell them some portfolios have no arrears yet they still will not hand back and are waiting until empty and then try to sell.

 

 

Advice from a Barrister, in writing, on the contract terms in a Mortgage Express mortgage deed - and on the implied terms added to the contract by the 1925 Act - could clarify whether the LPA Receiver has a legal obligation to hand management of the property back to the borrower, and if so under what circumstances.

[Ed999]

According to the Mortgage Express website:

 

Following nationalisation, we are now closed to new mortgage business and are unable to offer new Buy to Let deals or further loans.

 

Our goal is to protect and create value for UK taxpayers by winding down our mortgage business, so we want to help you avoid payment problems, pay-off your Buy to Let mortgage or find a better deal elsewhere.

[caro]

According to the Mortgage Express website:

 

If someone was cynical they might wonder to what lengths MEx might go in order to hurry things along.

[Ed999]

An LPA Receiver’s powers are limited to section 109 and 109(3) of the Law and Property Act 1925.

 

 

The statutory powers the LPA Receiver has under Section 109 of the Act are:-

 

· To demand and recover all income due (including rent) on the property that they are appointed receiver on. This can be recovered by action, distress or any other means needs. They are required to provide valid receipts for income (or other) taken.

 

· If directed by the mortgage lender, the receiver can insure and keep insured against loss or damage by fire. This can be taken by from money received by the receiver and can be used against anything compromised in the mortgage.

 

 

The lender can also delegate its contractual powers to the receiver, under section 109(3) of the Act. If the lender wishes to delegate its contractual powers this must be done in writing. The contractual powers generally are:-

 

· The power to sell the mortgaged property on such terms as the receiver sees fit.

 

· When the lender is in possession of a property, it has the power to cut and sell timber and other trees after consulting with a qualified arboricultarist.

 

· The power to make leases.

 

 

The LPA Receiver or mortgage lender may apply to the court on matters of uncertainty about the appointment, powers or remuneration of the receiver.

 

 

The lender can require that all monies received in connection with insurance of the mortgaged property be applied as follows:-

 

· Towards the discharge of the mortgage money owed.

 

· To recoup monies, loss or damage to which the funds are for.

 

 

Remuneration for the LPA Receiver:

 

The receiver is entitled to retain out of any monies received (after discounting costs) a rate not exceeding 5% unless specified otherwise. If an application to the court has been made, they can also specify the rate of remuneration dependant on the individual case.

 

 

 

Statutory powers

 

The s.109 powers of the LPA Receiver include:

 

· To demand and recover rent to give receipts for income.

· To insure any property against loss or damage.

· To grant a lease over the property at the best reasonably obtained rent.

· To accept a surrender of a lease in order to grant a new lease.

· Obtaining possession if it is occupied illegally or the occupier has defaulted on his obligations, for example to pay rent

· seeking planning consent or otherwise dealing with the property

· paying monies collected to repay the loan due

· agreeing a settlement with creditors if needs be

· paying to the owner/borrower any money that is left over after repaying all the debts and costs

 

In a well drafted mortgage the above powers of an LPA Receiver are extended and would allow the LPA Receiver to take control of the property and act as he considers fit with the consent of the mortgagee (i.e. the mortgage lender, not the borrower). The LPA Receiver's decisions in dealing with the property gives them full discretion.

 

Thus the LPA Receiver takes control of the property, and the owner cannot deal with the property in any manner (e.g. cannot let it out to tenants).

 

 

The Receiver has total discretion but must act reasonably. Any obligation on a person to act reasonably is potentially open to challenge on the ground that he has not acted reasonably.

 

For example, selling a property without using an Estate Agent is fraught with potential claims that the sale has not been at arm’s length, so could result in legal action by an aggrieved borrower.

 

 

 

Appointment by lender

 

An LPA Receiver is appointed by a lender who has a fixed charge over property under the statutory power given to that lender in section 109 of the Law of Property Act 1925.

 

Such an appointment of a Law of Property Act (LPA) Receiver may only take place if:-

 

1. the mortgage money has become due, and

 

2. the mortgagee has become entitled to exercise the statutory power of sale, where:-

 

2.1 there has been default in repayment of a loan for 3 months after a notice requiring it, or

 

2.2 Interest remains unpaid for 2 months after becoming due, or

 

2.3 there is another breach of the Act.

 

 

A Law of Property Act (LPA) Receiver's powers are limited to collecting rents and income, however the Law of Property Act Receiver does have a duty to keep property in good repair and to insure the property.

 

 

There is an interesting Court of Appeal decision, which is known as Chatsworth Properties Ltd v Effiom (decided in 1970), which could be of importance to a shorthold tenant under a letting unlawfully entered into in breach of the mortgage terms - who, in the right circumstances, might have a valid tenancy, albeit one subject to section 21 of the Housing Act 1988.

 

 

 

Negligence

 

The mortgage lender is not liable for the actions of the LPA Receiver, since, on their appointment by the lender, the LPA Receiver becomes the agent of the borrower, not of the lender.

 

The effect of this is that the borrower will not be able to sue the lender for any negligence that may result from any acts or omissions of the LPA Receiver. However, the LPA Receiver himself will find himself in the unhappy position of being in the firing line in the event that the borrower suggests he has carried out his duties negligently.

 

 

An allegation of direct or residual negligence has to bear in mind the Court of Appeal decision in %20EWCA%20Civ%201965.html"]Raja v Austin Gray [2002] EWCA Civ 1965 (19 December 2002), concerning the negligence of a Valuer and his principle, the Receiver, in which the Court of Appeal refused to treat the agent of the Receiver as owing a duty of care directly to the mortgagor-borrower ("it would not be fair, just and reasonable that an agent employed by a mortgagee to advise him should be under a duty of care to the mortgagor in giving that advice ... [as] there was no sufficient relationship of proximity between them").

 

 

Though, in Raja, Peter Gibson LJ did say this -

 

Equity intervenes to ensure that proper account is taken of the interests of the mortgagor and others interested in the equity of redemption. The mortgagee is only interested in the discharge of the debt owed to him, but equity makes sure that the mortgagee acts fairly to those interested in the equity of redemption when the mortgagee exercises the power of sale. In a case such as the present, the sale being an exercise of the power of sale of DFL as mortgagee, it seems to me that the relevant person to be treated as interested in the equity of redemption must include the mortgagor who has mortgaged the properties in question to DFL in circumstances where DFL's power of sale is being exercised by the receivers. I would therefore hold that the receivers did owe a duty of care to Mr Raja when they exercised DFL's power of sale of the properties, even though the receivers were appointed by the mortgagee of DFL.

Edited May 28, 2011 by Ed999

[Ed999]

The function of the Barrister in this type of case is to research recent court decisions concerning section 109 of the 1925 Act, and to provide a written summary of the points of law that emerge from those cases upon which a mortgage borrower can realistically challenge any aspects of the LPA Receiver's actions, or those of the mortgage lender.

 

It is important to note that the Barrister does NOT investigate the case, nor does he gather the evidence. That is YOUR job. He is not a Solicitor. Nor is he a private detective. YOU put the evidence before him, and he advises you in writing as to what outcome might be possible in a court.

Edited May 28, 2011 by Ed999

[caro]

A Law of Property Act (LPA) Receiver's powers are limited to collecting rents and income, however the Law of Property Act Receiver does have a duty to keep property in good repair and to insure the property.

Seems to me that Walker Singleton have failed to meet their responsibility here.

 

There is an interesting Court of Appeal decision, which is known as Chatsworth Properties Ltd v Effiom (decided in 1970), which could be of importance to a shorthold tenant under a letting unlawfully entered into in breach of the mortgage terms - who, in the right circumstances, might have a valid tenancy, albeit one subject to section 21 of the Housing Act 1988.

 

Thanks for that Ed.

 

The function of the Barrister in this type of case is to research recent court decisions concerning section 109 of the 1925 Act, and to provide a written summary of the points of law that emerge from those cases upon which a mortgage borrower can realistically challenge any aspects of the LPA Receiver's actions, or those of the mortgage lender.

 

Hi Folks

Just a quick update on the meeting a few of us attended yesterday.

I think it was a very informative meeting and having an M.P and a Barrister there certainly helped me to see things in a slightly different way.

Both the M.P & Barrister seemed quite surprised that the lender we were having the most problems with is MX...a company wholly owned by the British taxpayer.

The M.P did seem quite shocked at the level of corruption within both MX and the LPA receivers. We have asked him to try to find out from colleagues etc how much knowledge other people have regarding these matters.

He has put together a Bill (Secured Lending Reform Bill) to try to ammend parts of the 1925 Law of Property Act. If anybody is interested in knowing more about this or would like more info regarding the M.P then please send me a PM.

The Barrister was great, we have over the last few years met countless solicitors and Barristers, but this guy was different and unusually for a Barrister, quite human!

He really does seem to know about the 1925 Law of Property Act and gave us some of his thoughts on how we could get round some of problems...it's the first time for ages that we feel there may be light at the end of the tunnel.

There will probably be more meetings to discuss how we now take action.

If anyone doesn't want to attend meetings but does want to tell their story of how they have been treated by the lender &/or receiver then again let me know and I will pass your details on.

Obviously this is just a very brief update and is only MY opinion of the meeting, other people who were at the meeting may have different views.

Best wishes

Mungos mum

 

MM or anyone else involved - is the barrister that you met taking things forward for you, or was this a one-off. Can you elaborate please, obviously without compromising any possible action? Do you have any kind of timescale and could it be used to halt action being taken against some of the people posting here.

[Ed999]

The recent case of Bell v Long & Others [Court of Appeal, June 16th 2008] brought a Receiver's obligations, on selling a property portfolio, into sharp focus.

 

The issue concerned the sale by the Receiver of a portfolio of four properties in circumstances where they had previously received offers for three out of four of the properties from individual sellers. Having taken their local selling agent's advice, the Receiver decided to reject the individual offers and sell the properties as a portfolio of four, and ultimately achieved a successful sale of the portfolio

 

However, the Receiver was sued by the Borrower's assignee on the grounds that the Receiver could and should have obtained a better price had the properties been sold on an individual basis. There were also secondary allegations that the Receiver did not take adequate valuation advice, relying only on the selling agent's opinion, and that the Receiver had failed to test the market properly in relation to the sale of the individual properties.

 

The court, however, rejected all those arguments and found in favour of the Receiver.

 

In effect, the court reaffirmed the receiver's wide discretion.

 

 

The Court held that -

 

· While the Receiver was under an obligation to obtain a proper price for the properties, he was not obliged to either "ride the market" or to take on onerous expenditure in order to achieve a sale.

 

· The Receiver had the right to choose the time of the sale no matter how disadvantageous that may be for the borrower. In addition, whilst the marketing of any property had to be appropriate, the Receiver nonetheless should look to the lender's interests in deciding how to sell.

 

· In the circumstances of this particular case, given that serious offers had been received for the portfolio of properties, had the Claimant's arguments been adopted the Receiver would have been put in the position of rejecting those offers and holding out until individual sales of the properties were achieved. In the circumstances, weighing the certainty of the portfolio sale (given the firm offer received) against the uncertainties of a possible lengthy marketing campaign of the individual properties, the Receiver was well entitled to adopt the chosen strategy in relation to the timing of the sale.

 

 

 

The claim in Bell arose from the sale of four properties as a portfolio at a discount from their individual valuations, the court held that receivers are entitled to choose the time of sale even if this means getting a lower price than might otherwise have have been obtained.

 

The receivers appointed valuers to market and sell the properties. The valuers used three bases of valuation. The open market values and estimated realisation prices each produced the same combined total for the properties of £995,000. Both these presumed a marketing period of six months prior to sale.The third formula - estimated restricted realisation price (i.e. reduced price for a quick sale) - produced a combined valuation of £660,000.

 

After a short period of informal marketing and around three weeks' formal marketing the receivers sold the properties as a portfolio for £775,000. Shortly afterwards, the new buyer sold the properties on individually for a combined value of £1.1m.

 

The claimant contended that the sale price was significantly lower than could have been achieved had the properties been more effectively marketed for a longer period of time.

 

 

 

An earlier case of Silven Properties v RBS also found in favour of the Receiver.

 

It decided that a Receiver had no obligation to incur expenditure in order to prepare a property for sale. In that case a borrower unsuccessfully argued that the Receiver should have expended funds in order to apply for planning permission as the planning consent would have increased the potential realisation.

Edited May 28, 2011 by Ed999

[caro]

What about companies like Walker Singleton who as well as being LPA receivers are also estate agents? Isn't that a conflict of interests?

 

I believe that they market the properties themselves, although other posters will have better knowledge of how this all works, as I'm just a disgusted observer of all this.

[diddled]

Yes you are right. WS have their own estate agency and market property under their control themselves.

WS is a partner led business and consists of Walker Singleton Asset Management Ltd, Walker Singleton Commercial Ltd, Walker Singleton Property Management Ltd.

In addition the Firm has a dedicated Residential Sales office in Bradford established in the City in 1936 and trading as Charles Walker Chartered Surveyors.

[Bombs Away]

QUICK HI TO ALL

does anyone know how much these lpas actually charge for their insurance??

its REPULSIVE

i have a case where my LPAs are charging £175 per month,my current portfolio policy could have properties added for £100

for the YEAR!!

now ive seen various references to 'acting reasonably' in 1925 lpa charter.

In my case as im sure CHILLINLONGS there could be thousands of Pounds to be credited to the various accounts,this could tip the scales and obviously could be another demonstrable point to the courts.

does anyone have any ideas how to convince the lpa companyto use the lndlord insurance (like for like cover)albeit at a 10'th of the price????

BOMBS AWAY