BM Mortgages “Action Required” letter on interest-only mortgages?

See your trusty expert solicitor. There may be even smaller print than the small that you have read!

Reply to the comment left by Lindsay Keith at 12/05/2020 - 09:42
Surely at the time you took out the mortgage they will have sent paperwork to you concerning the terms and conditions of the mortgage. Does it not give you your answer in the paperwork?

Interestingly, I have a number of BTL loans with BM, and like you, I received 2 similar letters last week, for loans maturing in 6 years time, asking for the same info.
However I also received 4 other letters from BM for loans that mature in 2/3 years, merely advising me to make sure I have repayment means/vehicles in place?
Not sure why the inconsistency?

This is exactly the reverse of my experience with Birmingham Midshires. Amongst other loans expiring at other times, we had £5-6m of interest only BTL mortgages with a range of lenders, all expiring in 2022 (they were 15 year term mortgages we used in 2007 to buy around 45 new houses).

A number of the lenders have decided to pull out of the market, CHL and Rooftop, and have indicated that we have to re-pay their loans by summer 2022 which is a drag and means I will have to find new lenders and pay fees. One or two like Northern Rock were uncompetitive and we have already re-mortgaged these elsewhere. Some have offered to renew on the terms available at the time the mortgages expire, but continue to send threatening letters, when you call them, they say the are obliged to send the letters by the PRA but that they will renew onto products available at the time when the others expire.

Best of all was Birmingham Midshires, I had 5 mortgages with them, I called them up to see what could be done, the person on the phone said, would you like to do it now? I said yes and there an then over the phone they extended the term of the mortgages at no cost and with no change of rate (2% over base) until 2037!

They were a real pleasure to deal with.

Simon

C&G tried this with me years ago my response was short and sweet "property may be sold or remortgaged"

Halifax send me these letters regarding my interest only BTL mortgages periodically, although not quite as intrusive. I am yet to receive one from B M Solutions. I do have savings, but I just ring and tell them the mortgage will be paid on the sale of the property. This has always been a satisfactory answer for them.

Hi, We have 2 BTL interest only mortgages BM and have heard nothing from them.

Maybe the building society’s are now worrying that if house prices drop significantly there isn’t going to be enough equity in the property to cover paying off the loan. If this is the case then we’ll all be in trouble! I still have another 2 years to run on all 9 of my mortgages and I am concerned that if the property prices do fall significantly I could possibly end up in negative equity with nowhere to go for remortgaging. Is it possible that the lender would call in the loans?

Hi David, under normal circumstances a response along the lines of "I will sell or remortgage" would cover the issue. All they are trying to do is establish your plans - which I suspect the regulator (post 2008) requires them to do. However we have now had two "black swans" (rare events) relatively close together which makes some people wonder whether selling or remortgaging would actually be available. Of course one might argue that if those options were not available we would all be in 'trouble'. Particularly so if the economy, stock market etc were also to stop. It can happen. Post WW1 Germany? Venezuela today?
Just a thought.

With an expected large downturn in the economy due to Covid, the housing market along with any looming end of term mortgages are likely to run into trouble. However, I'm sure we landlords can rely on the government to step in and help in the same balanced way they support tenants - not...!