"State-backed mortgage lender ruined my retirement"

By

Emma Lunn

|

Ruined: Brian Smart says that UK Asset Resolution has wrecked his retirement

A buy-to-let landlord says heavy-handed treatment from state-owned lender Mortgage Express has robbed him of his retirement income and ruined his life.

Brian Smart, 61, from Flintshire, has spoken out over the actions of the former arm of Bradford Bingley, which was nationalised in 2008.    

Mortgage Express’ homeloans book is now in the hands of UK Asset Resolution, a Government organisation that has shut it down as quickly as possible regardless of the impact on borrowers – and in cases like Brian’s failing to get anywhere near the value of the mortgages back.    

Brian got involved with buy-to-let in 2006. After an illness he was keen to secure an income that didn’t depend on his health and build a portfolio to fund his retirement. 

With the help of a property club he bought 10 properties – half mortgaged with Mortgage Express and half with other lenders.   

When his investments went wrong, he said he had no support from the lender, which refused to lower its interest rates as the base rate was slashed down to 0.5 per cent in 2009.   

It then repossessed his properties and sold them at knockdown prices.   

Brian said: ‘They sold them for about 30p in the pound then came after me for the shortfall.   

‘I had no income apart from my properties so taking them away was not the answer if they were interested in recovering money. They then did a Land Registry search and got a list of my four properties with other lenders and put charging orders on them without me knowing until it was too late.   

‘This means that had there ever been any equity in the future, they have a claim on it. As things stand the properties are just starting to come out of negative equity.’  

Brian’s main issue is that the properties were sold off for much less than they were worth, leaving him with a massive shortfall on the mortgages. This is a common complaint about UKAR and Mortgage Express.   

He said: ‘I got into the mess in 2008 when several deals that were going through got pulled at the last minute, deposits were lost and I became broke. It was a dual problem: I no longer had cash to subsidise negative cashflow deals until they came out of fixed rates, and Mortgage Express refused to lower tracker rates in line with the Bank of England base rate despite Gordon Brown saying at the time that all banks in government control would do so.   

‘The end result was that my original GMAC mortgages that Mortgage Express had acquired were costing me a fortune with an inevitable result.’   

The ‘inevitable’ result was that in 2009 and 2010 Mortgage Express repossessed four of Smart’s properties.   

Proceedings began as soon as he was one month in arrears and, unlike other mortgage lenders, Mortgage Express refused to negotiate.   

When a rental property is to be repossessed, the lender is duty bound to write to the tenants. Some of Smart’s tenants promptly stopped paying the rent but remained in the property until eviction, while other renters moved out as soon as possible.   

Brian complained to the Financial Ombudsman Service but it refused to help on the basis it wouldn’t interfere with the running of a ‘commercial business’, despite Mortgage Express being under Government control.   

‘Mortgage Express did not lower their mortgage rate in line with base rate reductions leaving them too expensive to cover with rent,’ says Brian.   

‘Mortgage Express made no attempt to sell the properties on the open market as buy-to-let mortgages are unregulated and they don’t have to.   

‘The outcome for the UK Treasury is that their charging orders are never likely to collect any money, but on the other hand they have made sure that neither will I. So I will be a burden on the state during my retirement rather than a financially independent individual.’   

Comments (13)

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wellington,

Lincoln,

7 minutes ago

Why is it so fashionable to vilify anyone who takes the responsibility to resolve their own financial problems by taking on debt and responsibility whilst providing homes for people to live in? Fleecing hard working people, exactly how is providing someone with a home to live in is fleecing hard working people? These people need to have somewhere to live and instead of them paying him a reasonable rent those same people are now paying those who took over the properties at 30% of their market value who are now making more profit for charging the same level of rent as the original investor. Current breed of landlord why is the current breed of landlord any different to any other breed of landlord and why are landlords more abhorrent than Tesco of Sainsbury who on the basis of your financially illiterate argument could also be accused of fleecing hard working people because when they sell food profit arises to pay staff and invest in more stores to employ more staff.

paddyleeds1,

leeds,

16 minutes ago

my dad always taught me not to gamble but if I do only gamble what I could afford to lose I very rarely gamble I have a flutter if I go to the races but set a limit of £100 for the day and only go once a year so I feel sorry for him but he gambled and lost that is life

Josef,

Siberia,

16 minutes ago

So he gambled and lost, how is that the fault of the lender? He overstreched himself, nobody twisted his arm.

where1sjustice,

london, United Kingdom,

21 minutes ago

Financial Ombudsman is a complete waste of space.

Roy,

Billericay, United Kingdom,

21 minutes ago

The article does not say but I think that he might have borrowed 100+% mortgages on overvalued properties. A recipe for disaster whether you are an owner occupier or a b2l landlord.

malwood9,

thirsk,

24 minutes ago

I’d like to know, if there’s a paper trail, who bought the properties at knock down prices and was there any connection to the lender?

malcolm fleming,

barrow in furness, United Kingdom,

27 minutes ago

very sorry for mr smart , i am in the same position , my business failed after several years of running at a loss , and using all our savings hoping to keep the business afloat but alas in the end we had to close down as business only got worse , in the end the keys to the business property were handed back to the mortgage company who promised to sell the building at a fair price , i had the building valued at approx £500,000 12 months later to my astonishment and horror i had a letter from the mortgage company. saying they had sold the property for £90,000 and they would be chasing me for the shortfall of £330,000 and would be taking me to court for this debt , which they did , no legal aid was available even though i am on pension credit , i now have a legal charge over my home for the shortfall + 4% per year i fought the court case myself attending each summons the judge was very helpful and at least reduced interest rate of 8% down to 4%

Chatsboy100,

Plymouth,

27 minutes ago

Chancer got caught out….

charliebos,

spalding,

28 minutes ago

A landlord cannot have a charging order applied to his property without his knowledge – notices are served throughout the process – and he hasn’t been “robbed” of his properties: they were repossessed because, quite possibly, he wasn’t making the mortgage payments.

Do we have a professional victim here?

MartyD,

Oxford, United Kingdom,

32 minutes ago

At his age he shouldn’t have been given the loans required to buy one property never mind ten, with no income the only security against the loans was the property and if you keep up the payments for something you’ve borrowed then it gets taken back, it’s a no brainer.

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"State-backed mortgage lender ruined my retirement"