Mortgage Express threatening LPA receivership

[aptb74]

Hi All,

 

I have just found this forum, but wish I had found it 2 years ago. I have been reading through this thread but have only reached page 10. It could well be that a lot of the answers I need will be in this thread somewhere but by the time I get to it, it may well be too late.

 

I am a landlord and have my mortgages with Mortgage Express. I have been in arrears for about two-three years, and have been working to clear my arrears. Now that I only have three accounts left in arrears MEX are threatening to put ALL of my properties into LPA Receivership, unless I sign an Amendment Deed, which is governed by the MORTGAGE EXPRESS Conditions 2010 in relation to buy-to-let portfolios.

 

I have always been suspicious of my portfolio managers, and think I would prefer to cut my throat, than sign the amendment deed – which is probably one and the same thing.

 

I have been given three weeks to either sign or have a LPA Receiver appointed to manage my properties.

 

There is very little information in terms of the requirements that have to be met for a lender to place a property into LPA (Law of Property Act) Receivership, and Mortgage Express have given a lot of conflicting and inaccurate information. For instance they are saying that a property can be place into LPA Receivership if it is two or more months in arrears, whereas the research I've done on the internet seems to suggest that a property has to be three months in arrears before it can be put into LPA Receivership. Also for the last two years they have been telling me that only properties that were in two or more month's arrears were at risk of being put into LPA receivership; Now they are saying that it doesn't matter whether a property is no longer in arrears, if it has been in two or more month's arrears at any time they can still be placed into LPA Receivership, as once you are in default you are always in default even though even if the default has been settled, unless or until you enter into new terms and conditions.

 

I have read some of the accounts of people’s experiences with Mortgage Express and the various LPA Receivers, and some of the detail is shocking.

 

It seems that because so few people understand this Act, the mortgage companies, are riding rough shot over people.

 

There are a number of things that I would like clarified, if anyone is able to do so:

 

Can the Mortgage Company put a particular property into LPA Receivership even if there is no arrears at present.

 

Can the Mortgage Company put a particular property into LPA Receivership even if there is less than two/three months arrears on the account.

 

Can the Mortgage Company put a particular property into LPA Receivership for non-payment of service charges, where you have genuine reason for not paying the services charge (i.e. lack of maintenance and repairs, serious neglect allowing the building to fall into serious dis-repair over a number of years, and apparent misappropriation of funds by the management company).

 

Do I have the right to pay no payment on some mortgages and use the money instead to bring accounts that are in arrears down, so that they are less than 2/3 months in arrears.

 

I know that the Law say that I am entitled to be treated fairly by my lender, and I do not regard the conflicting and misleading information that I have received from my lender regarding the appointment of a LPA receiver as having been treated fairly.

 

Is it worth while getting a solicitor involved, or would the money be better spent trying to bring down my arrears.

 

Many Thanks in advance

[honeybee13]

Hello and welcome to CAG.

 

I've started a thread for you because this way you should get advice about your specific problems. I hope the guys will be along later with advice for you.

 

My best, HB

[aptb74]

Thank you - Honeybee13

[aptb74]

Does anyone have an electronic copy of the Mex Express Conditions 2010, in relation to buy-to-let-portfolios?

Thanks

[honeybee13]

Hello again.It's not really going to make much difference if you keep posting the above on every thread about Mortgage Express. Please keep your queries to this thread and you will have all the advice in one place. Asking on three different ones only confuses things.Weekends are always quiet here and long weekends more so. I hope more forum regulars will be along soon.HB

[honeybee13]

Sorry about the spacing above, my PC is playing up.

[Petronius Walker]

Mortgage Express are taking a hard line and this includes either enforcing, or explicitly reserving the right to enforce, either new conditions or old ones rarely enforced before. An example is that they might warn you that if things are not perfect in the future, the trigger point empowering them to take action may have been passed years before. So, let's say that you have no arrears now, but go one month into arrears. If that had been the first time, they might not be able to do anything. But if you had been, say, two months in arrears 10 years ago, the law empowered them to take action ever since that date. So what they are saying is, be good, or we'll exercise the powers already available to us because of what you did in the past. On your questions, failing to pay service charge is a breach of the 2010 conditions (if not your earlier version); trying to argue that you had grounds to not pay service charge may be a complicated effort. And, no, I bet your loan conditions do not allow you to stop paying on one to pay off arrears on another. The basic truth is that if you are not perfect, then Mortgage Express don't want you. They are a failed business trying to recover what they can, but within limits. Sometimes, it amkes sense for the lender to get what they can while they can rather than try to 'make it work' with you.

[aptb74]

I would say that if someone had arrears on a particular account and 10 years ago and mortgage express waited 10 years to take action against them, and are empowered to do so. I would say firstly that they are out of time because of the undue delay, and secondly that the term is an unfair one. And is based on the thesis that "Once in default, always in default". When in fact a default may be cured or remedied.

 

We have to remember that anyone can put anything in a contract, it doesn't mean its lawful. Now if you are doing something which you know is at best dubious, and probably unlawful, and no one challenges you, would there be any motivation for you to stop. Take insurance protection, MP Expenses, or the energy companies charging prepayment user more for the gas and electricity - all concerned new that what they were doing was probably unlawful and at best dubious, but they only stopped when they were challenge and had sanctions put on them.

 

So why would i permit someone to take what is mine on unlawful or dubious grounds, why should it be my responsibility and at my expenses to prove that what you are doing is unlawful. Just because it is in the terms and conditions it does not make it lawful. For example, I could have a contract that says "for the consideration of £100k, paid to you now so you can buy a house and start a faimily, you must work for me 6 days a week for the next 10 years without further remuneration; If at anytime you miss two days work for whatever reason, I am entitled to take charge of you house and assign someone to manage it, who will eat up all the equity you have in the house and more, and then sell the house at a loss, and chase you for any shortfall, but I do not have to exercise this right at the time your breach occurs I can do so at any time of my choosing while there is still a mortgage outstanding.

 

After coming to work for me 6 days a week for 4 years, you fall six and cannot come into work for a whole week, but then return to work, even though you are not 100%, after two months you come in on your day off to make up you shortfall - so default remedied. Two years later I send you a notice say that I have appointed a receiver to manage your property on you behalf who has power of attorney over your property.

 

I think most people would know that is the contract is probably unlawful, and at best extremely dubious, but unless I use any means at my disposal to challenge this i will loose control of my property and any equity I have in it. In law you have the right to defend you property and rights.

[asokn]

The mortgages almost certainly contain a forebearance clause stating that a delay in enforcing their rights does not amount to consent to the breach. As for time limits, that is dealt with in the Limitation Act, you have only been in arrears for 2-3 years as I understand it?

 

Once the right to appoint a receiver has arisen then that right crystallises and can be exercised years later.

[aptb74]

Thank you for your contribution Asokn, but I would have to strongly disagree with you. I was two or months in arrears on most of my accounts - Mortgage Express offered me a payment plan for me to clear the arrears on the accounts. Now, how would a reasonable man interpret this offer, would he interpret it has work seven days a week and clear you arrears on your account, but even when you have cleared you arrears we can still if we wish put your properties into LPA Receivership at any time of our choosing even if you have cleared your arrears. Or would a reasonable man interpret this as if you go all out and clear your arrears on your accounts, the default will be remedied and we will no longer seek to put your properties in LPA Receivership for that default. Such an interpretation flies in the face of logic and fairness, and would constitute unfair term.

 

Yes, if the arrears had remained outstanding and I had done nothing, and no agreement to clear the arrears had been reached then you could see the logic and fairness in they choose to enforce there alleged right to appoint an LPA receiver for the particular properties in question, but as to the particular circumstances of my situation, and I believe, many other people's situation it would be invalid and unlawful to appoint a receiver where arrears have been cleared by an agreed payment plan over a number of years.

 

If what you are saying to me is right and that had been clearly explained to me do you think I would have work 7 days a week for the two or three years to clear the arrears. Would anyone knowingly agree to such terms.

[asokn]

The power to appoint a receiver is contained in section 101(1)(3) of the LoPA 1925. That makes clear that a lender has power to appoint a receiver once the mortgage monies have become due; it isn't a question of contractual interpretation or the 'reasonable man' test for a contractual term.

[aptb74]

But, if the arrears has been cleared, then the mortgage monies has not become due, and therefore they have no right or authority to appoint receiver, even though they want you to believe they do have that authority. You have done what they have asked, you have made good the default, and it has been cured, and if there is no arrears there is no monies that have become due, so therefore they have no authority in law to appoint a receiver.

 

Additionally, the Law and Property Act 1925, only allows them to manage the property not to sell it, and certainly no to sell at well below market value.

 

If someone makes a claim against you, or act against you, and you do not contest or object to it, then you have accepted their claim. There is a saying "The law rewards the vigilant and punishes the negligent", my interpretation of this is that you can be guilty of something and walk free from it because of you knowledge of law, equally, you may be innocent and condemned because of your ignorance of the law. So you only have those rights in law that you claim, is not this the way that a default judgement is obtained?

[asokn]

But, if the arrears has been cleared, then the mortgage monies has not become due

 

But this is the point; they *have* become due in full so it's not a question of repaying the arrears to prevent the statutory power from being exercised. If you consider section 8 of the Administration of Justice Act, that was drafted to limit the terms of the 'sums due under the mortgage' for the purposes of the court's discretion under section 36 of the earlier AoJ Act to that which would have been due notwithstanding the default; i.e. arrears, because otherwise the entire redemption monies are due.

 

You can draw an analogy with section 86 of the County Courts Act which prevents enforcement of monies not yet due (hence no charging order where instalments are maintained under an order) but once you default the whole sum is due in full. The same can be seen in Zinda v Bank of Scotland which makes clear that a mortgage company retains the power of sale under a suspended possession order even if the arrears are cleared in full.

 

The Law of Property Act does, undeniably, contain a statutory power of sale so I'm not sure why you say it does not.

 

As for your interpretation of a saying, I'm not sure that takes things much further

Edited April 11, 2012 by asokn

[Petronius Walker]

The questioner can be as incredulous as they like. The point here is that Mortgage Express is operating to an unusual set of standards because they have gone bust. They're not interested in being reasonable for the long term benefit. If they see trouble, they want such cash as they can get. Earlier this afternoon they repossessed my seven properties because of service charge arrears. I was paying the fund on refurbishments and had only one more to go. A going concern with a longer term view and future might have allowed me more space. Mortgage Express does not have a longer term future. You are looking for a set of understanding principles that simply don't apply in the circumstances facing Mortgage Express, and I might say that your responses to some of the well meaning, and accurate, replies borders on being impolite.

[aptb74]

Dear Petronius, I am sorry if I am coming across as incredulous - this was/is not my attention. I am fairly new to this site and am not completely up to date on the action that have been taken my members previously; nor am I 100 percent on the legal precedents that are relying on to do what they are doing to us.

 

Okay, let me try and clear up my ignorance, when osokn, says "they *have* become due in full so it's not a question of repaying the arrears to prevent the attitude power from being exercised..." do they become due automatically, or does a formal demand have to be issued by the lender to the borrower in order for them to become due.

 

Petronius - when you say that you have had seven properties repossessed because of service charge arrears, was this via the courts, or have been put into receivership without due process, and are you satisfied that they Mortgage Express were entitled to do so?

 

I apologise again if my replies to any of the responses to this thread bordered on being impolite this was not my intention. I fully appreciate you and others taking the time out to respond to my posts. I am here not only for myself, but for all those who are experiencing similar problem to myself, and am determined to find a way through.

 

Many Thanks

[keates]

I read your post on CAG, I do not know your situation but wanted to let you know that there is a lot happening at the moment. I am part of a group of landlords who are fighting hard for justice. If you wish to contact me, I would be pleased to give you more details.

 

Regards,

 

Joan

[Petronius Walker]

The legal position is that any payments due under a mortgage are due on the dates that the mortgage says they are due. For monthly mortgage payments, that will be a date agreed with the lender. Other dats won't be agreed directly with the lender: service charge is an example. The lender's rule will require you to pay your service charge whenever the service charge is due to be paid under the terms of your lease, be that on an annual date or some other, more frequent, date. If you do not pay all the service charge due, and pay it by the due date, you have failed to meet the terms of your loan. Whether the lender does anything about it at that time again is not the point. If they ignore, but later get upset with you, they can refer back to when you FIRST breached your terms and take action. So, again, if you ever had mortgage arrears of two months plus, even though (like me) you may have reached, and kept to, an arrangement with them and paid them all off, they can ALWAYS appoint receivers based on the first (and possibly the only) time you had arrears. Most lenders would not do this because, if they are now getting all their money and you are not accruing debts (by not paying service charge) they may well lose a lot of money. So they are more likely to work with you on any issues. But Mortgage Express, being bust, has a different set of considerations and only so long in which to reduce its loan book (that is, how much is lent out to customers). So, although Mortgage Express is going after weak loans looking for ways to terminate the loan, it is also going after really strong and safe loans. Because these are 'strong and safe', borrowers should be able to remortgage away and Mortgage Express want that because this also reduces the amount they have lent. You will see at once that the issue here for them is not profitability (keeping 'strong' loans would be profitable). The issue for them is how quickly they can get rid of loans one way or the other. A third way that they are encouraging is getting borrowers to reduce their debt by paying off capital. To encourage this they have removed early payment charges and when they review your portfolio they will probably apply the 75% loan to value rule. In a world where the value of properties has fallen, some landlords with excellent repayment histories will find that the value of their properties has fallen below this level, just because of market changes. Mortgage Express will use this to require payments of capital to reduce the loan.

 

In my case, they are appointing receivers. The receiver (unlike the lender) can then sell at will, which is what they plan on.

 

Hope this helps. Whatever your circumstances,Mortgage Express are looking for ways to get you off their books altogether, or at least to reduce your borrowings.

 

In your last entry, you again refer to whether paying off arrears means they can't rely on previous missed payments. I trust I have explained that they can.

[aptb74]

Petronius thank you for you reply, do you intend doing anything about what has happened to your properties or do you think that the fight is over. Have you joined the group action that is referred to elsewhere in this post. My view is and always will be that where the is a will (a true will), there is a way, and if you search hard enough you will find it. I sincerely hope that you find justice. Best Wishes

[aptb74]

Some users have PMed me, but I can not reply to them as I do not yet have 15 post, as soon as I do I will reply. Thanks

[aptb74]

Petronius, I would further say that knowledge is power. Mortgage Express has used their knowledge to further the ends at your expense, that is not to say that there is not knowledge out there that you could use to counter the actions they have taken against you. Nothing is absolute, and if you give up there is no comeback.

[Petronius Walker]

Thanks. For me, I am looking at whether the management company has a legal right to claim the service charge in the first place, because most of the claim is for a sink fund against planned major works: but the lease makes no mention of collecting service charge in advance of expenditure. If I was right on this, the arrears would disappear. However, Mortgage Express could still stick to their guns, based on earlier breaches. I have sent a note to Joan about the group action and wait to hear more. But the law does not favour borrowers.

[keates]

We are fighting from every angle possible. We have a complaint with the FOS and in connection with this we have just instructed a forensic accountant. We are also involved with the group action. We were in court with the LPA Receivers last week to try to force them to release fianancial details that they had withheld following an SAR. We complained to the Information Officer and were informed that we are entitled to the infomation as we are 'personally, legally and finacially' responsible. The judge reserved judgement for 4/6 weeks but said whichever way it goes he will allow a right to appeal. We also have a solicitor who has just started working for us. He usually works for lenders and receivers but wanted to take on our case. He is the first lawyer I have found who knows this part of the law inside out. He has gone for falsing them to sell the properties to stop things getting any worse and also feels we may have a case under the CCA. I agree with you and I just know that we will break through in the end. Best wishes

[araguin]

Hello. I have noticed that a lot of management companies have been increasing their service charges for different reasons, and they always threaten our properties and so lenders get equally concerned. I had a property where in they wanted 3K additional service charges for works etc, and refuse to make arrangements with me. They want the 3K asap or they will file a court order to repossess the property. I ended up filing a case to the Leasehold Valuation Tribunal and in the end won the case. Look at your lease and find all the things that this management company is not doing, ie, are the accounts up to date and given to all the leaseholders yearly, etc etc, and bring them to the tribunal. I do feel that there are a lot of "fraud" going on with service charges. We pay extortionate amounts but we hardly see the maintenance properly done parallel to what we pay.

 

 

Thanks. For me, I am looking at whether the management company has a legal right to claim the service charge in the first place, because most of the claim is for a sink fund against planned major works: but the lease makes no mention of collecting service charge in advance of expenditure. If I was right on this, the arrears would disappear. However, Mortgage Express could still stick to their guns, based on earlier breaches. I have sent a note to Joan about the group action and wait to hear more. But the law does not favour borrowers.

[dyna]

please contact me also, as i need justice. About 5 of my houses has been sold, they have all been under receivership and their currently a property under receivership for over 1 year and the property had no arrears and the receivers refused to put tenants in even when i argued with them and found tenants myself, they still refused to put them in the house.

[dyna]

I read your post on CAG, I do not know your situation but wanted to let you know that there is a lot happening at the moment. I am part of a group of landlords who are fighting hard for justice. If you wish to contact me, I would be pleased to give you more details.

 

Regards,

 

Joan

 

please contact me also, as i need justice. About 5 of my houses has been sold, they have all been under receivership and their currently a property under receivership for over 1 year and the property had no arrears and the receivers refused to put tenants in even when i argued with them and found tenants myself, they still refused to put them in the house.