Mortgage Express – Are they looking to break mortgage contracts?

Reply to the comment left by "Mark Alexander" at "05/04/2016 - 17:45":

Sadly, I can't see the right corners as they are under the bar on the right.
The visible area in this comment ends at "on"

Also can't see the bottom of the (left and) right bars as the bottom of the scroll bar is below the edge of the screen and it won't scroll past there - just jumps back up.

Probably worse for me than most, as I have vision problems and therefore a low screen res.

I might just go with making my screen much narrower so it removes the left and right bars completely.

Just got in and opened my post, I also have a letter from MX. Will be checking my terms tomorrow.

Reply to the comment left by "Kathy Evans" at "05/04/2016 - 22:16":

Hi Kathy

This is partially a browser related issue.

It will be fixed this week but meanwhile you may wish to consider using the Google Chrome browser which is far better, or any mobile device where this problem isn't present.

I suspect you're using Firefox?

The left side bar is vital for site Navigation and to enable new readers to consider free membership. Over 50% of the visitors to Property118 are new to the website and find us via Google search. The left side panel also carries Google Adsense advertising (re-marketing) which generates an important revenue stream to allow us to fund the running of Property118 servers.
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Has anyone with a loan bought by Cerberus / TSB heard from the new owner of their loan so far?

It is no secret that UKAR is lining up a sale of a further chunk of its mortgage book 'to raise sufficient proceeds for Bradford & Bingley to repay the £15.65bn debt to the Financial Services Compensation Scheme (FSCS) and, in turn, the corresponding loan from the Treasury'

Maybe these letters are part of the process to get that sale away?

Lest we forget, that sale of the granite mortgages to Cerberus / TSB was not, IMO, in the best interests of the the UK taxpayer.  

We know that assets with a book value of £12.05bn were sold, but the details beyond that are murky.  We don't know how much writing down those assets had been subject to before the sale and we don't much about the value / structure / nature of the payments made.

Here I refer to Jolyon Maugham QC, an authority on tax law

http://waitingfortax.com/2015/11/13/so-just-how-good-is-that-cerberus-transaction/

What we do know, however, is that the new owners of those loans will not be paying any UK corporation tax on any profits arising from those assets in future: TSB is a subsidiary of Sabadell (Spanish) and 'Cerberus' is Cerberus European Residential Holdings BV (Dutch).

In his blog, Jolyon refers to the the FT (https://next.ft.com/content/a851ec82-5d66-11e5-a28b-50226830d644#axzz3rHNIThiV) stating that the Granite portfolio has a high yield of around 4.79% and that only 7,949 of the 118,323 loans are in arrears

4.79% yield on £12.5bn is £599m in interest income.  

Stepping past the fact that the government itself could hang on to all that income (it can essentially borrow for free and collect the 4.79%) then, at the very least, by selling to an offshore owner, the government has given up the future corporation tax on any profits arising from the management of the loan book.

How much is that?

Well, here is where I disagree with Jolyon, who says that the interest arising is the taxable profit figure.  It isn't.  Let's say that 3% of the 4.79% is taken up by Ceberus / TSB's cost of capital and costs of running the mortgage book (I am being generous to them, it is probably less), that leaves £224m annual profit.

As the loans are primarily interest only and probably have, say, 10 years left to run on average, that is a potential taxable profit of £2.24bn that has walked off these shores.  Even at 17% corporation tax, that is £381m in future revenues that the government has given up by selling offshore.

Just remember that next time you read or hear that UKAR's mission is to maximise value for the taxpayer

Reply to the comment left by "Jon Pipllman" at "06/04/2016 - 08:20":

Very interesting research Jon. The way this whole business has been handled makes me so cross. My husband and I have a former Northern Rock interest only mortgage at 4.79% with another 18 years to run and this knowledge will affect considerations about if, how and when we repay.

Reply to the comment left by "Old Mrs Landlord" at "06/04/2016 - 08:46":

>Old Mrs Landlord

Have you heard anything from Cerberus / TSB since they bought your loan?

Reply to the comment left by "Jon Pipllman" at "06/04/2016 - 09:02":

Never had any notification that loan has been sold on, so maybe it hasn't. No further replies now as off back to lambing field.

Reply to the comment left by "Mark Alexander" at "06/04/2016 - 02:14":

I'm using Opera, which is based on Chromium. I absolutely detest Chrome. It is the same in any browser as it is related to screen width.

Reply to the comment left by "Matthew Harvey" at "05/04/2016 - 15:02":

Very interesting Matthew - is there a way to contact you please?

So basically they want to increase landlords monthly payments until the equity value falls back in line with the LTV of the original product? Its not our fault house prices have contracted in some areas.

However wouldn't this action set a legal precedence. Therefore in the future in a falling housing market, mortgage payments will simply rise regardless of rate to bring the LTV back in line with the original agreement.

Id prefer not to be one of the many landlords will be paying more and more, regardless of no change in bank/lender rates.

Also as mortgage valuers (effectively acting for the banks) control most mortgaged house prices, wont we find ourselves in a position where the lenders/government could use this mechanism to extract more monthly cash from landlords whenever they choose? regardless of lender/bank rates.

If they can get away with altering terms of a contract (against contract law), and people accept this, then they can alter ANY terms they choose.

We may have worrying future ahead.