by Alex Dring
9:41 AM, 10th December 2013, About 11 years ago 38
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Reading about the experiences of other landlords with Mortgage Express on Property118 has been very disturbing and familiar.
I hope that sharing my brothers story will result in the National media and housing charities picking up on what is really going on in the PRS. I am happy to be contacted by the press and the housing charities via mark@property118.com – tenants affected by my brothers story are happy to share their stories too.
My brother has a portfolio of 25 properties, all of which were acquired from 2005 to 2007. His financial advisor and mortgage advisor were the reason he was able to obtain a portfolio of this size, they organised the mortgages and then re-mortgages to release more funds for the next purchase. Unfortunately my brother was young and trusting. When his financial advisor said that they had created a Letting Agency and could manage his portfolio completely he agreed as he worked full time and was quite overwhelmed by the situation he found himself in. All of the mortgage statements were sent to the offices of the financial advisor who told him that due to the increasing LIBOR rates and tenants not paying that there was no profit from his portfolio.
In 2009 my brother took the decision to sell his family home and move to one of his rental properties in order to release some of the financial strain. He moved into a flat which had been rented through his financial advisers Letting Agency where he subsequently discovered over £4,000 mortgage arrears and a similar amount of un-paid service charges owing. The sickening realisation of what state the other mortgage accounts might be in was unbearable. My brother asked for me to help him manage his portfolio as I was a property administrator. He wrote to all of his mortgage companies explaining the situation. He requested mortgage statements and a change in correspondence address to his own instead of the financial advisers office.
In March 2010 the mortgage statements started to arrive, imagine opening each one and finding arrears on all but one of the 25 mortgage accounts! He knew all of the properties had been let and income producing yet the statement showed random payments causing extra fees.
His financial advisor refused to pass on the tenants details so in many cases my brother had to knock on the doors of his own properties to find out who lived there. We did not know what type of reception we would get approaching the tenants as obviously it was a really odd situation and you would not blame the tenants for being suspicious. All but two tenants were just so relieved to finally meet the landlord as most of them had been told by the Letting Agent that the landlord lived abroad. When they had complained about repairs nothing had been fixed. In one flat there was water coming through the roof and down the ceiling light. Apparently, when the tenant complained to the Letting Agent they were told to move the bed! It was extremely upsetting hearing all of the tenants experiences. We set about prioritising the most dangerous repairs required as well as the gas safety inspections as there were none completed for the properties with gas.
Ten of the properties in the portfolio had such high arrears it was too late to save them going to the LPA receivers. Over the last three years my brother set about clearing the arrears and all but two of the properties (those with Mortgage Express) have been returned to him with the receivers disinstructed.
In total seven properties within the portfolio are with Mortgage Express, two of which were passed to Walker Singleton LPA receivers. We found that the financial advisor had made an insurance claim on one of the properties which had been passed to Walker Singleton. The insurance claim had been protracted over a couple of years so the arrears on the still empty property were over £20k. Walker Singleton and Mortgage Express had been liaising with the financial advisor even though he was not an authorised third party contact. In 2010 when we wrote to the insurance company they apologised and explained that they had issued in good faith a cheque for £18,500 to the financial advisor so although they said they would black list the financial advisor they could not assist further. When this information was passed to Walker Singleton they sent a couple of emails to the financial advisor asking him what he had done with the money and why the property was still in a state of total disrepair. There was no response so my brother had to use his own money to repair the house and I then found a tenant, all with the consent of Walker Singleton. Since 2010 the arrears have dropped to £5k but the tenant vacated in November 2013. MEX will not give a decision on whether they will sell the property or allow it to be re-let it so the arrears are accruing again and now landlords have to pay Council Tax on empty properties so there are even more costs.
The other property with Walker Singleton was a one bedroom flat which they badly managed and failed to inform MEX or us that the tenant had vacated. When we found out we were allowed to repair and clean the property before finding a new tenant. The arrears on this property were cleared in December 2012. With both of the properties Walker Singleton allowed us to complete the repairs and manage them to keep the costs down. As the arrears were cleared my brother was paying the service charge and mortgage for the flat but in April 2013 MEX decided to sell the flat. They instructed Walker Singleton to get the tenants to pay the rent directly to my brother and started proceedings to evict the tenants.
The tenants were a young couple with a new born baby, they were good tenants who paid the rent in full every month. They also looked after the flat so were ideal. As the mother was suffering from post natal depression, instead of seeking help when they received eviction papers, they put their heads in the sand and it was not until it was too late when they eventually approached Shelter for help. They went to court to delay the eviction but it was turned down by the Judge. They were devastated and the following Monday after the court appearance bailiffs were knocking on the door. We do not know what went wrong but it appears Walker Singleton failed to inform the bailiffs they could get a copy of the communal door key from the local managing agent. I was alerted by an elderly neighbour at the block of flats that someone was drilling the locks, she was very frightened. When the bailiffs entered, the neighbour asked what they were doing. It was then the bailiffs realised they were not entering the flat but just the communal hall. They then started to drill the lock to the flat without even establishing if anyone was home. The tenants were terrified and told to leave without collecting their possessions. They were told they could arrange access through Walker Singleton to remove their furniture and the council placed them in B&B emergency accommodation.
When the tenants contacted Walker Singleton they were told they would be charged £70 by New Trade to arrange access to collect their belongings. I emailed Walker Singleton to clarify who they should pay the money to and they said they could make a card payment to them.
When they met with New Trade, the company which evicted them, they were told that it was Walker Singleton that requested the £70 fee and they knew nothing about this charge. The couple and baby have been in temporary accommodation ever since the eviction in October 2013 and the flat has remained empty. Looking at market comparable evidence, if it is sold there would be an approximate short fall of £30k to clear the mortgage.
Reading other landlords experiences of MEX it is clear to me they intend to sell the property and then apply their right to consolidate my brothers other MEX mortgages, this would bankrupt him. He has now instructed a solicitor to proceed with an injunction so the flat cannot be sold as there are no mortgage arrears. His solicitor is confident this can be achieved. Like others who hear that a mortgage company has foreclosed on a mortgage that is no longer in arrears, the solicitor is perplexed by the whole situation.
What can be done to stop mortgage companies deciding they do not want to continue with the agreements even though there are no arrears and evicting paying tenants?
My family are all clubbing together to fund the necessary legal fees to fight the injustice of the above, however, we don’t know how long we can keep doing this for as it is so expensive. Could it be that’s what lenders are reliant upon? My brother made some bad judgements and is paying dearly for those. Clearly some of the mortgage lenders also made bad judgement calls which is why they are now owned by the tax payer. The inefficiency and the unfairness of the system though needs to be addressed. We understand that the administrators need to recover the tax payers bail out money but at what human cost?
I have worked out that if my brother is made bankrupt by MEX a total of 34 adults and 18 children will be made homeless from his rental portfolio alone. I know MEX are doing this to other borrowers so this will add to the desperate homeless situation across the UK. Local councils are at breaking point as they do not have the housing stock and with more landlords choosing not accept Housing Benefit tenants this is a crises already happening now.
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Anon
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Sign Up11:10 AM, 10th December 2013, About 11 years ago
Alex, your brothers naivety is no reason for the Police and the regulators not to deal with this matter. I agree with others, this matter is fraud, your brother is a victim of financial crime. You need to put more pressure on the Police. What have you done so far in this regard?
Badger
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Sign Up11:24 AM, 10th December 2013, About 11 years ago
Reply to the comment left by "Anon " at "10/12/2013 - 11:10":
I have had several instances of the police taking the easy way out and declaring that it is not their problem in recent years.
I have had to resort to writing to my MP. Only then have the various forces concerned decided to get off their collective bottoms and start investigating.
Commendably, my MP has always been very keen to help and quickly had the Police jumping to attention. I recommend this route even though it would never have occurred to me to consider it years ago. (Of course, it should not be necessary, but then that is the world we live in today...)
One case (which I let go at the time), the smallest by a long way but it still rankles, was when a tenant made off with my washing machine when they vacated. Apparently, that was a civil matter as well. Silly me. I could have sworn it was theft...
Mark Alexander - Founder of Property118
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Sign Up11:27 AM, 10th December 2013, About 11 years ago
Reply to the comment left by "Badger " at "10/12/2013 - 11:24":
That's a very good point Badger.
The easiest way for alex to find her MP is to put her postcode into our Property Research Tool and then click on the Local MP link
See >>> http://www.property118.com/property-research-tool/44395/
All BankersAreBarstewards Smith
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Sign Up11:41 AM, 10th December 2013, About 11 years ago
i had the police tell me that if a rogue builder returned to my property and removed the roof tiles he had replaced there - that that was a civil matter as he owned the tiles even though i had paid 75% of his bill...
In my experience ANY thing to do with landlords- unless its murder or serious injury - they refuse to investigate, irrespective of the police force area
Mary Latham
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Sign Up12:34 PM, 10th December 2013, About 11 years ago
I am really very sorry to read this story Alex, thank goodness your brother has you for support I can only imagine the stress that you are all suffering.
DCLG are meeting with the lenders in January - don't get excited it is to ask them to allow landlords to take tenants on longer tenancies following pressure from Shelter. Landlords need to write to their MPs to ask them to put pressure on DCLG to take the opportunity to discuss the WHOLE buy to let market and the potential affects of their actions on tenants - they don't care about landlords so no real point in us moaning about our issues - they DO CARE about tenants. As this story so clearly illustrates, ANYTHING that has a impact on a landlords borrowing also has an impact on tenants and this is the key to making them take action.
As far as I know ONLY Property118 has done anything to help those who have issues with the lenders - the West Bromwich Building Society case is a great piece of work and while it does not affect me personally I am well aware that is does affect many landlords and of course their tenants. The lenders have chosen, as landlords have, to be in the important business of offering homes to human beings and we must ALL take that responsibility very seriously because without the PRS this country is in BIG DOO DOO. I applaud P118 for becoming the champion of landlords but it should not be left to a privately owned web site to take this on alone Government MUST come on board and make the lenders aware of their responsibility, they must not be allowed to offer landlords an umbrella when the sun shines and take it away when it rains.
Mary Latham - follow me on Twitter @landlordtweets
Also see http://www.amazon.co.uk/dp/1484855337 for the perfect Xmas present for landlords for under a fiver
DC
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Sign Up14:28 PM, 10th December 2013, About 11 years ago
Alex, you have given us concise details here of a long drawn out matter that involves a sequence of events of theft, so unless you have not given us the full facts this is quite clearly a matter for the police to be involved in.
One of the first definitions a new police officer will learn is that of theft:
“A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it.”
You need to prove criminal intent but in your case it has basically proven itself as each matter affects the next in turn and by the agent failing to stop it continuing he is showing intent to continue to deprive you.
As a rule the police do not get involved in civil disputes, however with this case full and detailed information from you should easily demonstrate that an offence under the theft act has occurred and has then developed into a major fraud. It has also caused civil matters that should be separately pursued as a result of the massive financial loss your brother has suffered.
All too often people report thefts to the police but seem to come away with ‘civil dispute’ ringing in their ears. This is either because the full facts weren’t explained properly or the person taking the report does not understand the law.
If what you are reporting fits into the wording of the theft definition then it is a theft. So if the person you are reporting it to is unaware of what construes a theft then he or she should be firmly but politely corrected. This person may not be a police officer as in most cases when you telephone the police you speak to a civilian employee. Although civilians working in police call centres and at police station enquiry offices may often be retired police officers the majority of them will not be and will not have had any, or sufficient, training regarding law and therefore are not qualified to know the legislation. If they will not take your report you should insist that you speak to a police officer, which in complex theft/fraud circumstances is best dealt with by an experienced police detective (CID officer). At the very least a uniformed police officer will be able to give advice and refer the matter to an appropriate department.
If having spoken to a police officer and you still feel that you have not been dealt with correctly when reporting such a matter this may amount to a case of misconduct. You should consider speaking to a more senior officer to report such an instance and where it is alleged an officer has failed to meet the required standards of professional behaviour that matter will be dealt with separately.
Be clear that a police officer also includes a Special Constable but does not cover a Police Community Support Officer (PCSO). A PCSO is not officially qualified or empowered in law as a police officer is and although they carryout a close role in association with the police they are not to be confused as police officers.
On a wider issue I also think that lots of people don’t actually report matters to the police because they cannot be bothered with the hassle due to the fact that they heard or read somewhere that the police don’t deal with such matters because they have better things to do!
I also do not understand the mentality within the rental industry where somebody has deliberately smashed up a property when being evicted, or committed the theft of a washing machine as Mark mentioned or in this case, a fraud, however you wish to look at it a crime has taken place and it should be reported and recorded as such.
What actually happens further down the line of investigation or at Court is another matter!
NewYorkie
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Sign Up14:28 PM, 10th December 2013, About 11 years ago
The Police and Fraud ...please don't get me started!
Anything involving the misappropriation of financial assets should be dealt with under the Fraud Act 2006, which should now make it easier for fraud to be proved. It is a criminal offence, and the remit of the Police. Unfortunately, my recent experience is even when they are presented with a slam dunk case, which was amazingly referred for formal investigation to Bath Police by ActionFraud, they actually believed the alleged fraudsters (**MODERATED - please see http://www.property118.com/what-property118-is-not/ *** of Bath ...yes I'm naming them because they do not want to be exposed!) but did not even interview the person defrauded to the tune of some £100,000+. Following a complaint to the IPCC, I was told by a Chief Inspector Rowlands that they had spent a "proportionate" amount of time on the case and didn't intend to spend any more taxpayers money on it" ...but we should take out a civil action where the burden of proof is lower (but the legal costs extortionate!).
Mark Alexander - Founder of Property118
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Sign Up14:40 PM, 10th December 2013, About 11 years ago
Reply to the comment left by "Lou Valdini" at "10/12/2013 - 14:28":
Lou - your post has been moderated, please see http://www.property118.com/what-property118-is-not/
.
NewYorkie
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Sign Up14:40 PM, 10th December 2013, About 11 years ago
Reply to the comment left by "Lou Valdini" at "10/12/2013 - 14:28":
I didn't even get onto the MEX issue. I feel for this person and his family, and it is a tough lesson for those who thought running your property portfolio is best left to others.
My own experience with MEX is trivial in comparison. One of my freeholders (through their tied agents) persuaded MEX to pay them nearly £900 because I had supposedly breached the terms of my lease. This was untrue and I had already written to MEX explaining, and had their agreement not to pay. They subsequently did, and when I challenged them, they confirmed in writing that they had breached their own internal policies in paying, and tried to get the money back from the agent. Except, I had already told them the freeholder was selling the freehold and accumulating cash from leaseholders through all devious means, and so they stood no chance.
If MEX now refuse to refund the £900, I will now be faced with the effort of a FOS claim, which will cost MEX a lot of money for defending something they've already admitted fault.
NewYorkie
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Sign Up15:01 PM, 10th December 2013, About 11 years ago
Reply to the comment left by "Lou Valdini" at "10/12/2013 - 14:28":
Mark, I have no problem with you moderating my post. I did expect it, but hoped it might slip through, and the fraudsters and their 'friends' and employer would see it, and they would be forced to react or explain why not.
Fraud is a pet hate of mine. Fraudsters in general get away with their crimes because they obfuscate their actions to such an extent that the Police, courts and impressionable people cannot see the wood for the trees. They are sociable, believable, and incredible actors. Look up 'sociopath'; we will all realise we know people like that; probably have them as 'friends', until you cross them or they decide to make you a victim. Then, even your friends are likely to believe them. Maybe, you've suffered at their hands.
In my situation, these fraudsters need to be exposed, and if it means risking libel, then so be it, but I understand why forums like this cannot become embroiled in potential libel cases. I am not the only one doing this, and the Police are aware that this may happen ...but hey, it's a civil case!! The fraudsters know if it ends up in court, their actions will be exposed, and the Police will have to act (the case is not actually closed, just awaiting further evidence).