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Hi all.
Firstly, thank you to whoever is responsible for providing this facility, and thanks in advance to anyone who takes the time to reply.
This is a bit of an essay, but best to give full facts up front.
I am a buy to let landlord with 19 properties in addition to my home. For various reasons I have struggled financially and am in arrears on all mortgages. The mortgage lenders are MX (12 properties), BMS (4 properties), TMB (1 property), Northern Rock (my home) and B&W (2 properties).
One of the 'various reasons' is my health - I had a heart attack 12 months ago and also have a slipped disk which cannot be operated on for a period of time after the heart attack because of the medication. This has prevented me working to supplement income.
All lenders other than B&W are currently in agreed arrangements which are consistently being paid. The main lender is MX and the arrangement with them will see the arrears cleared in June 2013.
B&W have refused my proposals for repayment of arrears on the basis of my past payment record and lack of affordability given that the rents only just cover the mortgages and do not cover arrears repayments, and my income/expenditure statement only shows £500/month surplus. They have applied for a hearing at County Court which is due on 31 December 2012 for both properties.
I am speaking to a solicitor tomorrow and will have representation in court as well as attending myself.
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I have 2 mortgages with B&W, details as follows:
Mortgage 1: Buy to let, interest only. Market value approx £170k if sold under normal conditions, probably £140k at auction allowing 20% reduction.
£160k capital, additional £10k in arrears. Monthly payment of £769/month, rent of £720/month. The fixed rate period at 5.65% ends in 2 years time, at which point it goes to BOE + 1.75%. If BOE is still at 0.5% that would give a repayment of £298/month.
My proposal for repayment of arrears would be £200/month for the meantime, increasing to £671/month when the fixed rate ends and the normal payments drop. This would see the full arrears paid off over 32 months.
I am on good terms with the tenant and she is distraught at the prospect of losing her home, which she has been in for approx 2 years. I intend to get a letter from her to present to the court outlining the effect on her.
Mortgage 2: Buy to let, interest only. Market value approx £90k if sold under normal conditions, probably £70k at auction allowing 20% reduction.
£90k capital, additional £5k in arrears. Monthly payment of £385/month, rent of £420/month. The fixed rate period at 5.65% ends in 2 years time, at which point it goes to BOE + 1.75%. If BOE is still at 0.5% that would give a repayment of £169/month.
My proposal for repayment of arrears would be £100/month for the meantime, increasing to £333/month when the fixed rate ends and the normal payments drop. This would see the full arrears paid off over 28 months.
The tenant is only one month in to a 6 month AST.
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My arrangement with MX is being overseen by my property management company, who are acting as an informal LPA receiver and collecting rents and paying mortgages direct, which gives MX greater assurance of payment. I would propose a similar arrangement for B&W.
To be fair to B&W, I don't really blame them for applying for repossession given the amount of arrears outstanding and that previous arrangements have failed. They've been more patient with me than I would have been. Nonetheless, that doesn't mean I just want to give the properties back without doing all I can to prevent this.
A few questions:
1) I was under the impression that for commercial mortgages a building society did not have to go to court to repossess, indeed my solicitor is unsure why they have gone down this route instead of appointing an LPA. If they want repossession and are not prepared to accept my proposals does a judge have any discretion to actually stop them doing this or is it game over anyway?
2) My other mortgages all contain clauses which say that they can be called in if I suffer an insolvency event. If the properties are repossessed and sold at auction I anticipate a shortfall of approximately £50k which I will have no way of paying other than at a nominal monthly amount. If they then pressed for bankruptcy and the other mortgage companies called in their properties I would be left without income. Is this a likely scenario, and if so is it something which would be persuasive to a judge as grounds towards preventing the current repossession?
3) What would happen to the current tenants, particularly the one who is only one month in to a 6 month AST? Would they have to let her serve out the remaining 5 months? What would happen to the rent? If she can't live there for the balance of the term, would she have any claim on me?
That's all that occurs to me for now. Thanks to anyone who's taken the time to read this, and any further info that is needed I will do my best to supply.
Firstly, thank you to whoever is responsible for providing this facility, and thanks in advance to anyone who takes the time to reply.
This is a bit of an essay, but best to give full facts up front.
I am a buy to let landlord with 19 properties in addition to my home. For various reasons I have struggled financially and am in arrears on all mortgages. The mortgage lenders are MX (12 properties), BMS (4 properties), TMB (1 property), Northern Rock (my home) and B&W (2 properties).
One of the 'various reasons' is my health - I had a heart attack 12 months ago and also have a slipped disk which cannot be operated on for a period of time after the heart attack because of the medication. This has prevented me working to supplement income.
All lenders other than B&W are currently in agreed arrangements which are consistently being paid. The main lender is MX and the arrangement with them will see the arrears cleared in June 2013.
B&W have refused my proposals for repayment of arrears on the basis of my past payment record and lack of affordability given that the rents only just cover the mortgages and do not cover arrears repayments, and my income/expenditure statement only shows £500/month surplus. They have applied for a hearing at County Court which is due on 31 December 2012 for both properties.
I am speaking to a solicitor tomorrow and will have representation in court as well as attending myself.
--------------------------------------------------
I have 2 mortgages with B&W, details as follows:
Mortgage 1: Buy to let, interest only. Market value approx £170k if sold under normal conditions, probably £140k at auction allowing 20% reduction.
£160k capital, additional £10k in arrears. Monthly payment of £769/month, rent of £720/month. The fixed rate period at 5.65% ends in 2 years time, at which point it goes to BOE + 1.75%. If BOE is still at 0.5% that would give a repayment of £298/month.
My proposal for repayment of arrears would be £200/month for the meantime, increasing to £671/month when the fixed rate ends and the normal payments drop. This would see the full arrears paid off over 32 months.
I am on good terms with the tenant and she is distraught at the prospect of losing her home, which she has been in for approx 2 years. I intend to get a letter from her to present to the court outlining the effect on her.
Mortgage 2: Buy to let, interest only. Market value approx £90k if sold under normal conditions, probably £70k at auction allowing 20% reduction.
£90k capital, additional £5k in arrears. Monthly payment of £385/month, rent of £420/month. The fixed rate period at 5.65% ends in 2 years time, at which point it goes to BOE + 1.75%. If BOE is still at 0.5% that would give a repayment of £169/month.
My proposal for repayment of arrears would be £100/month for the meantime, increasing to £333/month when the fixed rate ends and the normal payments drop. This would see the full arrears paid off over 28 months.
The tenant is only one month in to a 6 month AST.
-----------------------------------------------------
My arrangement with MX is being overseen by my property management company, who are acting as an informal LPA receiver and collecting rents and paying mortgages direct, which gives MX greater assurance of payment. I would propose a similar arrangement for B&W.
To be fair to B&W, I don't really blame them for applying for repossession given the amount of arrears outstanding and that previous arrangements have failed. They've been more patient with me than I would have been. Nonetheless, that doesn't mean I just want to give the properties back without doing all I can to prevent this.
A few questions:
1) I was under the impression that for commercial mortgages a building society did not have to go to court to repossess, indeed my solicitor is unsure why they have gone down this route instead of appointing an LPA. If they want repossession and are not prepared to accept my proposals does a judge have any discretion to actually stop them doing this or is it game over anyway?
2) My other mortgages all contain clauses which say that they can be called in if I suffer an insolvency event. If the properties are repossessed and sold at auction I anticipate a shortfall of approximately £50k which I will have no way of paying other than at a nominal monthly amount. If they then pressed for bankruptcy and the other mortgage companies called in their properties I would be left without income. Is this a likely scenario, and if so is it something which would be persuasive to a judge as grounds towards preventing the current repossession?
3) What would happen to the current tenants, particularly the one who is only one month in to a 6 month AST? Would they have to let her serve out the remaining 5 months? What would happen to the rent? If she can't live there for the balance of the term, would she have any claim on me?
That's all that occurs to me for now. Thanks to anyone who's taken the time to read this, and any further info that is needed I will do my best to supply.