Making Overpayments on Your Mortgage

Hi Mike

Please email editor@property118.com and copy to me mark@property118.com

I have 5 ME mortgages and can assure you that ALL they are interested in is redeeming the loan book as soon as they can.
They are not the slightest bit interested in you as a consumer.
They are the govt and as a effective govt dept their mission is to recover all the mortgages outstanding ASAP.
I have ythis from their collections dept direct.
Tehy are not interesed in you as a long standing mortgage holder.
They want you to either redeem or f--k to another lender; which we know in this climate of changing criteria is an impossibility for most ME mortgage holders.

The exit strategy for Mortgage Express really caused uproar when one of their representatives came face to face with the Northern Property Tribe last May. You can read more about it from the link below

http://www.property118.com/index.php/uproar-as-mortgage-express-spokesman-reveals-their-exit-strategies/7808/ 

Hi all. Good site!

I have a number of MX BTL loans and have been approached by the company for a meeting. I should say that I have traded seamlessly with them for many years and have never before been approached like this. I agreed to the meeting, and in a subsequent confirmation letter from them they set out information that they would like to be available for the meet, including portfolio information showing loans with other lenders and even tax returns!

This seems unduly onerous for what was announced as a simple meet & greet and it now seems to be turning into something more.

I am curious as to what info they can reasonably expect to be provided as there are no reporting provisions within the agreements to the best of my knowledge. I fear, never having met them, that we are likely to get off on the wrong foot as I am not inclined to bare my soul when I don't even provide this info to my bank.

Anyone had any similar experiences? 

No but I would tell them to get stuffed and mind their own business.
Do not divulge ANY information to them.
Providing payments are being made they can't do anything.
They don't care about seemlessly trading they want the loan monies back.
What you could do is see if you could remortgage elsewhere for a better deal and say providing they pay the fees you will move to another lender.
I very much doubt, however , that you will find another lender at a rate as competetive as MX.
No harm in trying as it could give you a good negotiating position if they they try to force you to liquidate your portfolio.
If you have lots of positive equity with them then you are at great risk as they will find some obscure condition which means they will force you to sell.
Do not trust these people as far as you can throw them!

Trust your instincts.

My opinion is that you are not at liberty to meet them or to provide any information.

Remember, their sole motive is to recover their money, either now or in the near future.

The choice is yours but what you are in for, should you choose to meet them, is a glossy presentation on why you should overpay and possibly a few stark revelations that if you decide to sell one property and repay their loan they can retain 100% of the sale proceeds and call in all other loans. This will all be dressed up with "we can't advise you in isolation of all the facts surrounding your finances".

If you comply with their requests they win. If they can't convince you to over pay, but they glean enough information to establish that you are a better credit risk than their estimations suggest, then you help them to increase the markets percieved value of their loan book asetts and reduce your chances of them incentivising you to move on when their backs are against the wall and their deadlines for repayment are ever closer.

These days, when they call me, I just say that I'm too stressed out with the economy and my fiances to even consider talking to them but if I am unable to make my payments they will be the first to know about it. They do try very hard to get more info and they are very skilled at it. I think I must just a bit more skilled than they are though as the conversation always ends with them feeling very frustrated. They also get a flea in their ear about the advice that they are offering to people which is so clearly geared towards their objective to reduce their loan book, whether or not it is in the best interests of their clients 😉

Thanks guys. Sounds like fair advice. I will meet with them though, principally to listen to what they have to say. I'm all for reducing overall gearing (by whatever means best) but I think it will need to be a convincing argument to pay off MX first as it's the cheapest borrowing in my portfolio. If anything interesting comes out I'll report back

I would suggest you DO NOT reduce ANY of your gearing until we know what the outcome is of the proposed intoduction, of restricting to income only in 2013 by the EU of BTL mortgages.
If they do restrict based on income criteria and there has been no satisfactory workaround devised then you will be thankful for NOT making overpayments.
I would keep your status quo the same; maintain a watching brief over these issues and if it turns out after 2013 that  one may still obtain BTL mortgages based on IO, rental income criteria then you may carry on as before and possibly decide to reduce your gearing on your more expensive mortgages.
Make sure that any overpayments you would have made are placed in a high interest savings acoount that has no financial relationship with ANY of your lenders.
Otherwise you might find they start enforcing an offset policy.
Such a situation if it exists will be buried away in some obscure section of your terms and conditions.
Personally I think it should be compulsory to provide upon request a normal print size copy of terms and conditions.

Thanks Paul
I thought I'd update you following contact with MX. Although I planned to meet my relationship manager, it never happened. He called the day before to say that MX are subject to some restructuring which likely would result in some people leaving the company or having their territories changed. We agreed therefore not to meet but we did have a brief run through what the meeting was likely to cover. I will try to summarise but I suspect no revelations here:
 
- MX will continue to honour the T&C's of existing loans, and will not be looking to bully/coerce people into redeeming/repaying loans where they are operating normally.

- However, they will be enforcing breaches. Specific mention was made of late payments, and his advice was to ensure that direct debits are set up early in the month so that in the event of a glitch there is plenty of month left to ensure that a repayment is made each calendar month.
 
- As has been reiterated here, they are focussed on reducing/eliminating their loan book and are keen to help people to repay or relocate their borrowing.

- There are no alternative products to move to. Choices is still available - I asked whether realistically drawing overpayments down again is likely and the conversation went on as expected to LTV's.

- We did not broach the subject of whether redeeming one loan would trigger a redemption of the portfolio, or whether residue of a property sale would be retained to reduce other loans.

- There was no suggestion that any inducements might become available to persuade borrowers to redeem/relocate. However, I note from a recent questionnaire from CHL that they are asking people whether they would redeem their loans if they were discounted by 10%. It will be interesting to see whether this kind of idea becomes policy but it occurs to me that irrespective of the chunky difference in margins over base between a lot of historic MX/CHL-type loans and what is available nowadays, there seem to be pretty hefty arrangement fees in the current market.. Not being a mathematician I wonder, Paul's comments aside, what kind of write-down would make it compelling to redeem.

Cheers all

Interesting,  but the most important query was the 2nd from last paragraph;  why won't they answer!
For MX borrowers there is NO other alternative equally competetive product out there.
Realisitically,  therefore,  there is no other product that a MX borrower could go to.
So they are stuck with us,  for me that will be 19 years and 8 months!!!
How they can be so deceitful about the Choices offer just beggars belief.
Talk about being disingenuous or what!?
The best thing any MX borrower can do is keep your head down, make your payments, hopwe interest rates don't rise drastically anytime soon and try and build up a fighting fund for when interest rates do rise.
I know if they went back up to 6% I would have to subsidise the mortgages as the rent would be insufficient.
As I am only on a pension,  a bit difficult!!
So everything crossed that the status quo exists for a long, long time.
which looking at how things are going in the euro zone will continue.