my Leasehold/Freehold property and it's issues.

[HP Mum]

Ok

So I want to now follow up on this. 

I'm not sure of the process.

Do I first make a simple formal complaint to the broker?

Or straight away make a complaint to the ombudsman?

[honeybee13]

This is what the FCA say.

 

Step 1: Contact the firm directly

If you have a complaint, it is best to first ask the firm involved to put things right.

 

https://www.fca.org.uk/consumers/how-complain

[ericsbrother]

can you calculate your loss

- ie the difference between what you ended up payng compared to what you would have paid if the due diligence had been done.

 

Now it may be you wouldnt have got the loan if it was all legit but that is by the by.

It is the comparison between your bad deal and an honest one that is the figue you want.

Then let them know that you have suffered because of their slap dash commission earning activity and you wnat a refund.

 

When they laugh at you you go to the FCA and reason with them that all of the excess fees, add ons and whatever are down to the misrepreseantations of the broker about your position.

[HP Mum]

If due diligence had been done?

I wanted a btl. I was given quotes by different dept within same firm and thus have a record of a % btl interest rate at that same time.

The firm organised the valuation. So they were aware of the property value.  The value didn't change according to which loan they offered.

 

So - yes - over the loan period I can work out what I would have paid as a btl loan compared to what I paid as a bridge loan.

At the time of processing my loan request the firm was aware that the property had a short-term tenant - which was proof of rental that could be achieved (very high and plenty to service loan for very long time (1y) even w/o another tenant) 

The firm did not secure me a btl loan, the tenant moved out and I moved back in, still hoping for a btl loan.

But then the broker said my only option was a bridge.

 

They charged me a huge fee.

The difference between what I could have paid as a btl loan, whilst making a rental income, and what I did pay on a rolled-up pay at redemption bridge loan is huge.  I am talking bridge rates of 1%/month compared to annual btl of under 4%. 

I lost my ability to rent the property under the terms of the bridge loan.

I was charged a fortune in interest over the bridge period. 

 

So is it the figure between a btl and the bridge over the loan period that I need to calculate?  And add into my complaint for reimbursement? 

 

There have been subsequent huge legal fees incurred - by the lender chasing me for repayment of the bridge loan & by my attempts to defend.

 

Suffering?

Well - the very worst type of suffering has now happened.

I couldn't sell.  I had an incredibly valuable asset. Huge equity.  But the interest accrued / the property market suffered and I couldn't find a buyer even at a level just to clear the debt.  And now I have lost the property.

Repossessed.  Lost everything I had.

So this is my potential claim?

 

 

 

 

 

 

[HP Mum]

I am sending in a formal complaint letter.

 

I have checked all the docs with a financial advisor - who confirmed the broker firm breached fca regs. 

He also says that they've admitted this in their responses to my request for info (SAR).

 

He suggested that the loss incurred is the difference between the property valuation (done by the firm/ paid by me) and the amount of the loan at the time the loan started. 

The firm should return me to that position. 

Refund the difference. 

 Is this correct?

 

Just using random figures here - so if the property was valued at 2m and the loan start value was 1.2m

- should they return 800k?   

Or would they return the interest charged during the loan term?

+ costs?

+ compensation? 

What do I need to claim for? 

I'm a bit confused.

 

I have email trails specifically asking for a btl. 

Yet they placed in a more expensive short-term loan solution, for a higher fee and then never followed up with the btl. 

 

Would I need to work out what a btl would have cost over the same period?  (i have examples from the same firm). 

Work out the potential income earned?

And calculate the difference between what I did pay and could have paid - as my loss?

And would I include the potential rental income loss?

At the time of discussions with the firm I had a short-term tenant (4m) but by the time they eventually placed the loan I was resident.

 

I have checked the docs - and it was a regulated loan.

The firm advised me.

They confirmed in writing they did no fact find.

They also confirmed in writing they did no suitability letter.

 

Thanks for some aid here.

I'm very raw with this situation and been left in a really vulnerable position, with kids to care for still.

 

The position I want to be returned to is where I still have the house and a btl.

 

Could this be achieved if the broker firm reimburse me - a deal be struck with the lender - and a btl given now?

 

[HP Mum]

@ericsbrother   

Thanks for the input. 

I have now made a formal complaint.  And wait to hear...

I have also done a bit of research.

Whilst the lack of docs and formal advice given is evident - what happens if they try and dispute beyond the 8w?  The amount I'm talking about is above the fos limit. 

I note the fos can "ask" the company to pay more, it would mean probably making it a legal issue...

 

[HP Mum]

Does anyone have some input on quantifiable loss situation?

[honeybee13]

Have you calculated how much the quantifiable loss is? If not, there is plenty of information on the internet.

 

HB

[HP Mum]

Thanks honeybee.

I need advice definitely on how I work it out.

A couple of broker friends have given some tips.

I'm just not sure what is allowed to consider?

 

I know: the level of borrowing at the outset /  the property valuation organised by the broker (paid by me) / the amount of interest I have paid from then til now / the amount of legal costs paid.  The property has just been repossessed & the marketing price is 20% lower than the original valuation.

So is the quantifiable loss the difference between high % interest payments I paid instead of low btl % interest I could have paid? And the difference between the original value and the current advertised value (actual sale price) of the property. Plus legals costs??

Not sure how one quantifies emotional stress compensation? 

There is also an element of loss of rental income?

 

Edited April 10, 2019 by HP Mum

[HP Mum]

This is kind of the bare bones of my complaint:

 

Provided with regulated product on advised basis.  But no documentation to state what advice given or why. 

I now understand this is major breach of fca regs.

 

Suffered financial loss as a result of the loan advised to take.  Questioning the suitability of the advice given..

 

No-one can check the suitability of the advice given - due to firm's lack of  the required documentation to justify and evidence the advice that I did receive.

 

Summary - that If they are unable to demonstrate advice given was suitable, then I believe I'm due restitution for the loss I have incurred...

 

Does this sound ok?

 

I'm still not sure on  where I find details on calculating  quantifiable loss?

 

 

And how does one begin to demonstrate non-quantifiable losses - such as stress? 

 

 

[dx100uk]

show them all your posts here... that should do..

[HP Mum]

I understand the humour dx and your comment is funny  - but you are correct that I am crying with stress...

[HP Mum]

So my complaint has been acknowledged.  The clock is now ticking.

 

Does anyone here have any experience of broker firms breaching fca regs and being found guilty and liable to reimburse all fees and interest paid over the period of an unsuitable loan?

 

This is such a huge issue - my loss is huge - and I am prepared to go to press with it...

[HP Mum]

Hello

After repossession, if a property is sold  within a few weeks for a very low price which results in a large shortfall what would be the position of the lender?

And the position of the original owner?

By low I mean 25% lower than the lender's (conservative) valuation just 2.5y ago.

 

And if the original owner has no assets - ie  no income, no savings, no other property, no valuables, not of pension age - just have an executive plan set up for the future  by own old Ltd Co.

And if owner is  now classed as legally homeless with minors to support - will need benefits to survive.   Then what happens to the shortfall?

When the shortfall is huge - due to the low sale price.

 

Would lender try to bankrupt owner?   Or because owner has no assets etc this would be pointless?

Or would lender wait to chase for the shortfall in the future - in the hope owner's circumstances change and lender can stake a claim against any future property that may be bought?

 

Thanks

 

Edited April 28, 2019 by HP Mum

[dx100uk]

they typically sell the shortfall on to a debt buyer.

don't think we've seen any claimform threads [which is all the owner of a shortfall can do - go for a CCJ] 

 

what usually transpires is the mortgage itself is full of £1000's of unlawful penalty fess for everything including its raining today and its the debtor fault, to numerous unwanted insurance policies inc building insurance when the debtor already had it in place [the only insurance you MUST have on a mortgage]

 

an sar might be worthy now..so one can atleast prepare for anyone latterly trying in on before important information hits the shredder to hide why the shortfall is so high.

 

now if there is any recourse in the property beign sold at a substantially lower value im not sure on. with out searching here... 

[HP Mum]

thanks dx,

So the lender may try get a ccj on the shortfall.  Or may sell the shortfall on to a dca who may try get a ccj.

But they won't or can't go for bankruptcy - due to the no home, no assets etc??

 

Lender stated they will refuse to sign a waiver against them making further claims against owner for short-fall upon sale...  which seems to indicate lender would like to retain ability to claim.  

 

Actually -  how does a dca serve notice, if no known address?  

 

Edited April 28, 2019 by HP Mum

[dx100uk]

as I said 

never seen a lender going for anything...

 

I would simply keep the owner of the shortfall updated with correct address

as should everyone on her credit file or any other debts that shes paid within 6yrs be told ..

don't forget DVLA licence and V5C's and ofcourse old councils re ctax etc etc.

 

dx

[unclebulgaria67]

The debtor should not be tempted to make small repayments, hoping to be left alone. The debt owner is not bothered by the small payments, it is the value of the debt being acknowledged and therefore starting the clock running again in regards to statute of limitations act, that is more valuable.  The hope must be the financial position of the debtor changes years into the future, so keeping the debt alive with small repayments is a key goal for debt collectors.

 

 

[HP Mum]

Thank you both - helpful and reassuring

 

[HP Mum]

This is getting a bit complicated.

 

The lender appointed agents.  One of which is also marketing an almost identical property - bit smaller, less outside space and no nice views, but fresher refurb - in same tiny street - 45% more expensive!

 

So can it be argued that the lender and agents have under-valued? That any sale will be to the detriment and disadvantage of the original owner?  Especially when the lender is suggesting there is likely to be a huge shortfall - for which the owner will be held liable....  

 

How does the original owner respond?

 

The property market is poor, but surely the lender and its appointed agents can't market and sell the property so cheap and also come after the original owner for the shortfall?

 

Does the owner have a voice in this?

 

For the record, this thread has relevance to another thread about a broker breaching FCA regs.

 

The broker gave a loan on a fee-based advised basis

- without any due diligence paperwork 

- which turned out to be wholly inappropriate for the borrower

- who had no ability to make any payments at all

- which then resulted in the property (as above details) being repossessed.

 

There is a live claim against the broker. 

 

Waiting to hear their response to the claim that they mis-sold and the borrower wants full restitution...

 

Although am also not sure what full restitution would really mean?

Given the property has been repossessed - yet remains unsold - could restitution mean that the broker could be instrumental in stopping a sale at such a low price (as indicated above)??

 

And instead the broker is obliged to return the borrower to the position they were in before the bad loan?  ie the broker steps in, pays off the lender (probably via insurance indemnity?), returns possession to the owner??

 

Owner would then need what they originally wanted anyway - a proper mortgage that is wholly suited to their needs - ie BTL.

 

+ compensation?

 

Does any of this make sense?  

There's a lot going on, but perhaps still time to salvage..

 

 

[Will Goodfellow]

Repossessed properties often sell for less than market price but the mortgagor can argue that it has been sold at undervalue.  A complaint to the mortgagee and then escalation to the Financial Ombudsman Service if it is not resolved is procedure.

Having no assets does not necessarily stop a statutory demand to start bankruptcy proceedings. Whether or not the executive plan is affected depends on whether it is classed a pension or not and what type of pension it is.

A future property purchase could be affected, depending on when the banktupcy is discharged or otherwise if a CCJ is granted. Don't forget the statute of limitations is six years for any interest owed after the sale but twelve years for any capital. A CCJ seems more likely even where an undervalue dispute is successful there is likely to still be a large shortfall.

 

[HP Mum]

pension is protected.

 

I am ignorant of this - why would anyone start bankruptcy if there are no possessions or money?

Future property purchase?  That is unlikely

 

Will - I agree that properties "often" sell for less than market price.  But 45% less is too much.  25% less is too much.

Edited May 14, 2019 by HP Mum

[BazzaS]

“The lender appointed agents.  One of which is also marketing an almost identical property - bit smaller, less outside space and no nice views, but fresher refurb - in same tiny street - 45% more expensive!”

 

“Marketing” doesn’t mean it will sell for that, and they may have to wait to get any interest / a sale.

 

What is most likely key is the way it was sold;

a) if auctioned (unless the auction wasn’t advertised!) they’ll claim it sold at “market rate” : the rate an auction attracted!

b) if not auctioned and the comparable (less desirable?) property goes for a higher value soon : much easier to claim sale at an undervalue. Expect them to claim the refurb made all the difference, though.

 

[Will Goodfellow]

21 hours ago, HP Mum said:

pI am ignorant of this - why would anyone start bankruptcy if there are no possessions or money?

 

Because the creditor or creditors can does not mean they will but there is no restriction which prevents a bankruptcy because a person has no assets. Disposable income is relevant too as creditors can enforce an income payments order where an agreement is not met which will last for at least three years. It can prevent certain types of employment and directorships amongst other possible restrictions, and also affects certain credit applications in future. Creditors may consider it a fitting consequence of the debt owed even where there is no monetary gain.

 

It makes more sense for the mortgagee to apply for a CCJ in this case as there is more chance of monetary gain in the future. Although there is not much it can do if your friend has nothing to take.

[HP Mum]

thanks Will

And if theres no job/ no income?