Social And Affordable Housing Question

M

Munsterdude

Registered User
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169
Hi Folks,
I am a mortgage broker - and have a question for other brokers who look at this site. I have a client, and am trying to help them refinance their property which was purchased under the social and affordable housing scheme. I have hit a wall with this - mainly relating to the restrictive covenant relating to the repayment to the council of profit from the sale of the property. The council have agreed to rank their charge on this clawback second to any new lender - but I cannot find any lender prepared to take a first charge for capital, a second for the council for clawback, and a third charge for the lender (to cover any possible future interest payments) Anybody out there get any joy from any lenders on this issue?
Thanks
Munsterdude
 
Re: Socail And Affordable Housing Question

have never come across the exact situation but try EBS or BOI (not ICS) think EBS are a bit more flexible with their home access product.....but am open to correction on this!
 
Munsterdude - just curious: is there no industry source for advice on stuff like this? I'm just fascinated that a mortgage broker would be stuck on a technical point like this and be forced to resort to asking about it on a public bulletin board? This is a genuine query with no sarcastic/ironic intent.
 
Munsterdude,

Im a broker and have never encountered any lender willing to allow the council or any other party for that matter retain a second charge on the property. A lender will want a first and only charge on it. The only way they will be able to refinance is if there is enough equity in the property plus repayment capacity to allow them borrow to repay the council the buy out figure plus the clawback, if there is not enough equity they will not be able to do it.. The council clawback reduces yearly, maybe they should hold off for a year or two.
 
I've not come across any cases of remortgaging away from affordable housing but, given the situation you've outlined, I don't think any lender will do it. Let us know how you get on.

Sarah

www.rea.ie
 
Re: Socail And Affordable Housing Question

tml said:
have never come across the exact situation but try EBS or BOI (not ICS) think EBS are a bit more flexible with their home access product.....but am open to correction on this!
Click to expand...

I've had a no from both of these!
 
ClubMan said:
Munsterdude - just curious: is there no industry source for advice on stuff like this? I'm just fascinated that a mortgage broker would be stuck on a technical point like this and be forced to resort to asking about it on a public bulletin board? This is a genuine query with no sarcastic/ironic intent.
Click to expand...

Clubman,
Are you sure there is no sarcastic/ironic intent!!!! (Joking)
I hear what you are saying, but this is very much non standard stuff. I have been to the obvious places - County council department, department of Environment, several specialist solicitors etc. I honestly think I am making all efforts on behalf of the client. In addition i have had various underwriters in various banks trying to get to the bottom of this also. I agree with you about resorting to a public bulletin board. Normal techinical points can be clarified with the specific lender. In this case its a government department which seriously adds to the confusion! I suppose this is a last resort - I dont want to leave the client down. I would rather look a bit stupid, but be able to sort this for the client, than leave the client down.
Other general industry sources would probably be IMAF, PIBA, etc who I personally find to be weak enough on this sort of info. Cant say I blame them, as this whole area is a bit grey. Does this answer your query?
Munsterdude
 
Molly said:
Munsterdude,

Im a broker and have never encountered any lender willing to allow the council or any other party for that matter retain a second charge on the property. A lender will want a first and only charge on it. The only way they will be able to refinance is if there is enough equity in the property plus repayment capacity to allow them borrow to repay the council the buy out figure plus the clawback, if there is not enough equity they will not be able to do it.. The council clawback reduces yearly, maybe they should hold off for a year or two.
Click to expand...
Molly,
Thanks for the reply. A few points:
1) Several banks will allow the second charge - can give you the names if you wish
2) This particular client has very good equity in the property. The mechanisim of the clawback is quite severe - the county council will effectivly get the entire value of the growth in equity.
3) You may be right about holding off for a couple of years. Will have to discuss this with the client
Munsterdude
 
Munsterdude said:
Clubman,
Are you sure there is no sarcastic/ironic intent!!!! (Joking)
I hear what you are saying, but this is very much non standard stuff. I have been to the obvious places - County council department, department of Environment, several specialist solicitors etc. I honestly think I am making all efforts on behalf of the client. In addition i have had various underwriters in various banks trying to get to the bottom of this also. I agree with you about resorting to a public bulletin board. Normal techinical points can be clarified with the specific lender. In this case its a government department which seriously adds to the confusion! I suppose this is a last resort - I dont want to leave the client down. I would rather look a bit stupid, but be able to sort this for the client, than leave the client down.
Other general industry sources would probably be IMAF, PIBA, etc who I personally find to be weak enough on this sort of info. Cant say I blame them, as this whole area is a bit grey. Does this answer your query?
Munsterdude
Click to expand...
Yeah - thanks. Definitely no sarcasm/irony intended but I just thought I'd play it safe and declare that up front! :)
 
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