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Hi There,
Am looking for a second opinion on this one.
My wife and I owned a property development business some years ago, before the "crash". In December 2005 we bought a buy-to-let house for £62000 with the aid of a BTL mortgage of £52,000 from Bank of Ireland, (formerly Bristol & West). Over the next 2 years or so Bank of Ireland made 3 further advances to us on the property of £7,000, £5,000 and £5,500, the last one being in January 2008. The property was valued in the usual way each time. Many people will remember that time as the biggest financial meltdown that Britain has ever seen. The result is that we now own a property worth no more than £60,000 with negative equity to the tune of just over £10,000.
The funds were borrowed on an interest only basis, as was usual for this type of funding. Our payments are up-to-date and the mortgage term ends in December, (next month). I have tried for months to negotiate with Bank of Ireland an extension of the term to allow the property value to recover. We have an excellent tenant who has never been in arrears and keeps her home immaculate. Ideally, we want our tenant to continue enjoying the security she has enjoyed for the past 2 years.
However, Bank of Ireland remain intransigent and will not grant an extension, telling me that purchasing any property is a risk.
The result will be that the property will be sold and we will be pursued for the shortfall, probably resulting in a charging order on our own home.
My questions are;
1). Is Bank of Ireland being unreasonable?
2).Bearing in mind the economic climate in 2007 and 2008, could their total lending of around £70,000 to us be deemed irresponsible on a property worth £62,000 in December. Could this be a job for the Financial Ombudsman.
All opinions gratefully received.
Many Thanks,
Paolo.
Am looking for a second opinion on this one.
My wife and I owned a property development business some years ago, before the "crash". In December 2005 we bought a buy-to-let house for £62000 with the aid of a BTL mortgage of £52,000 from Bank of Ireland, (formerly Bristol & West). Over the next 2 years or so Bank of Ireland made 3 further advances to us on the property of £7,000, £5,000 and £5,500, the last one being in January 2008. The property was valued in the usual way each time. Many people will remember that time as the biggest financial meltdown that Britain has ever seen. The result is that we now own a property worth no more than £60,000 with negative equity to the tune of just over £10,000.
The funds were borrowed on an interest only basis, as was usual for this type of funding. Our payments are up-to-date and the mortgage term ends in December, (next month). I have tried for months to negotiate with Bank of Ireland an extension of the term to allow the property value to recover. We have an excellent tenant who has never been in arrears and keeps her home immaculate. Ideally, we want our tenant to continue enjoying the security she has enjoyed for the past 2 years.
However, Bank of Ireland remain intransigent and will not grant an extension, telling me that purchasing any property is a risk.
The result will be that the property will be sold and we will be pursued for the shortfall, probably resulting in a charging order on our own home.
My questions are;
1). Is Bank of Ireland being unreasonable?
2).Bearing in mind the economic climate in 2007 and 2008, could their total lending of around £70,000 to us be deemed irresponsible on a property worth £62,000 in December. Could this be a job for the Financial Ombudsman.
All opinions gratefully received.
Many Thanks,
Paolo.
