Northern Rock_Negative Equity

[Viv229]

Please help!

 

In May 2004, I took out a single mortgage with Northern Rock a 'Together Mortgage', totaling £112K. Northern Rock incentivised the ‘Together Mortgage’ with the availability to take out secured loans against your property, for buying household items etc. Northern Rock advanced me four secured loans on the property, totaling £21K, which increased the mortgage to £133K in 2006.

 

Due to the collapse and reckless lending of Northern Rock, the property is now in negative equity, with the property being valued at £120K. With this the mortgage/loans were transferred to an organisation called NRAM, then Whistletree.

 

These are the issues I have with NRAM and Whistletree:

 

In 2005, due to moving in with my fiancé we decided to put the property up as a ‘buy to let’, Northern Rock charged an administration fee of £100, for consent to let. When NRAM, then Whistletree took over the mortgage I received letters informing me I had to pay a £750 fee (Annually) for consent to let. This fee is calculated by the balance of the mortgage.

 

NRAM and Whistletree add the £750 fee to the mortgage, consequently increasing the debt. I have asked Whistletree for a breakdown on how they calculate this consent to let fee. They are unable to send any documentation explaining this.

 

My mortgage term is currently 13 years with Whistletree, interest only £506 per month. A repayment plan would be £1,600 per month. With this, I have asked Whistletree if I can extend my mortgage years, so I can start a repayment mortgage instead of being interest only. I was informed that due to the property not being a residential property, this was not an option.

 

The secured loans on the property have a high % rate and two are interest only. With this, I could take out a loan with a better interest rate and start reducing the debt. I asked Whistletree if I could pay all the loans off. I was informed there would be a penalty for doing this, and overpaying the loans would be an option. But overpayments would just cover the costs of the consent to let, so the debt would not be reduced.

 

The property has been on for sale for over 10 years, with cash buyers offering £120K. This would leave me with a shortfall of £15K with fees, but the property is costing over £4K per year to keep, with maintenance, agency fees, insurance, and upkeep. This seems to be the only option I have, due to having no support or guidance from NRAM and Whistletree.

 

I received an offer from a cash buyer who wanted to purchase the property. Whistletree informed me that this sale would take at least 12 weeks to process. The cash buyer wanted a quicker sale. Whistletree were unable to accommodate this and the sale fell through.

 

With Northern Rock collapsing and the mortgage being bought by NRAM and Whistletree. I have had no help or guidance from either company. Because of the high consent to let fee my debt is increasing and I cannot see any way out of this situation.

 

My question is:

Can Whistletree legally refuse to extend my mortgage period? Currently employed full time and age 46.

 

Can NRAM and Whistletree charge such a high consent to let fee without any explanation?

[sgtbush]

Your property is not in negitive equity.

£112k mortgage, value of house £120k

Your trying to "pin" on secured loans that run in parallel with your mortgage.

If you SAR them you will find you have multiple accounts, each with the different loan on.

You've gambled that you could borrow the money, make repayments and if you need to sell, the value of the house will increase significantly.

Well every home owner is in the same boat.

That is not irresponsible lending.

That's irresponsible borrowing

 

Buy to let option of 750. That's about right per year.

 

Sell up, mitigate your losses as much as you can.

This problem was not created by northern rock or the other two companies invoved now.

[Viv229]

Thank you for your positive feedback. I will recommend you to others who are in debt.

[sgtbush]

It is positive.

The 1st step of recovery is knowing what the problem.is and who's fault it is.

 

My advice is sell up. Mitigate your losses, then pay them back.

If you cant afford to do that then sell up and go bankrupt.

 

You need to understand that this I not irresponsible lending.

 

I have great empathy with people caught up in the PDL borrowing circle and people caught up in debt and live hand to mouth.

At least they know why they are in the situation they are in.

 

Take my advice / dont take it. It wont make any difference to me

[ericsbrother]

consider this,

at least you will be able to walk away from your problems if you do sell up.

 

Now the £750 may well be a bit steep

but you could have taken your business elsewhere if you could get a better offer,

normally the fee will be hidden as a higher interest rate

so you are still in a position to shop around a bit.

 

You should also consider managing the rental of the property yourself rather than lining someone else's pockets.

 

What is the gross rent and what are you doing with the excess if not trying to reduce the capital sum owed or at least setting it aside to pay back the loan in 13 years time.