Being bullied for extra payments on investment tracker mortgage

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PatrickJ

Registered User
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Hi guys,

I don't want to mention the institution for obvious reasons but would like to hear your thoughts please:

In a case were a couple have been paying interest only on an investment property for 2 years due to no tenants (very valid reason which the institution are aware of) are now in receipt of correspondence telling them their interest only term is up. Nothing wrong with that . . . as the individuals situation has improved.

The problem is when they had a personal call from an individual connected to the institution - the individual let the cat out of the bag by saying the institution wanted more than what was contractually due i.e. the current rental income (property now rented) plus extra lump sum so the capital would start coming down.

We feel this is a ply to give up a very valuable tracker.

WHat should be done next? Can a receiver be sent in if there is no arrears?
 
Thank you Thirsty. This situation is causing sleepless nights for all concerned. I must also say that the individual making contact is a bank official (freelance!) but making calls from a personal number. They are looking to meet the couple in their home. I have advised to avoid this situation. Is this correct advise?

Also when they tried to make contact with the bank they were instructed to deal with this individual only. This is a non arrears situation and a couple wishing to return to full capital payments but this individual is seeking SFS's etc.
 
What do you mean -a person connected with the institution?

The borrower has an agreement with the bank to repay capital and interest on a loan. You refer to the rental income.

Is the rental income equal to or more than the capital and interest repayment? Is the agreement to accept the rental income part of the original agreement or a later agreement?
 
individual connected to the institution
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bank official (freelance!)
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some of what you are saying doesn't make sense. Is this person employed by the bank, or is an agent of the bank?

tried to make contact with the bank
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Again, put everything in writing, don't deal over the phone.
.. instructed to deal with this individual only
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Is this in writing?

There is no good reason for a bank official or agent to call to your home; written correspondence only.

Also put in a Data Access Request quoting the Data protection act.
 
Agree with Joe

The rental income has nothing to do with your mortgage contract.

You have contractually agreed payments. If you are making them, then there should be no need for an SFS or any other meetings.

You had a full repayment loan and I suspect that the lender wants you to resume that.

If you want further forbearance, then you will have to justify it by meeting the lender and completing an SFS.

Brendan
 
PatrickJ said:
The problem is when they had a personal call from an individual connected to the institution - the individual let the cat out of the bag by saying the institution wanted more than what was contractually due i.e. the current rental income (property now rented) plus extra lump sum so the capital would start coming down.
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Must be a misunderstanding!! Contractually due payments are P&I over the remaining term of the mortgage. If the client is paying these on line then there is no need for concern and there is "no cat to be let out of the bag" as per BB's post above.
 
It sounds crazy alright! As mentioned the property is an investment property and the couple only received a letter stating that their interest only term was up this month (letter received less than a week ago) no earlier warning nothing . . . mortgage payment due next week.

Joe, the individual I have learned is an agent of the bank and sounds a complete scatter brain with information all over the place. They have been formally notified to keep away from the property and that of the home of the couple as there is no need for them to be there unless further forbearance is requested.

On another note how long is interest only generally allowed on an investment property?
 
Is this news to them that the interest only period is coming to an end?

What is there other income and assets?

What is the value of the property in relation to the mortgage?
 
PatrickJ said:
It sounds crazy alright! As mentioned the property is an investment property and the couple only received a letter stating that their interest only term was up this month (letter received less than a week ago) no earlier warning nothing . . . mortgage payment due next week.

Joe, the individual I have learned is an agent of the bank and sounds a complete scatter brain with information all over the place. They have been formally notified to keep away from the property and that of the home of the couple as there is no need for them to be there unless further forbearance is requested.

On another note how long is interest only generally allowed on an investment property?
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Your post is all over the place and is nearly impossible to understand.

Interest only can last as long as the bank decides in a case where there is a repayment issue. In this case it seems the couple were give a two year deal, so why they are surprised to get a letter telling them to go back paying the mortgage with capital and interest is beyond me.

The bank cannot demand more than is contractually due, which you stated in your first post.

What is important now is to figure out if they can afford the mortgage. Any chance of some actual figures, like value, mortgage, repayments, income.

If they cannot afford the mortgage they should think about selling it. Or come to a new arrangemnt with the bank. Which is why completing the SFS is important.
 
Since they have a term that is interest only, the actual capital and interest payments will be larger now than they were is they had being paying capital and interest for the last 2 years.
When you say the bank want 'more than what was contractually due ' what are you basing that on? It will definitely be more than they would have being repaying previously, if the term has not changed. Is it higher than the repayment that is needed to repay the loan in full over the remainder of the tern?
 
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