Bradford & Bingley Mortgage Rescue Scheme

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I would appreciate some advice/comments about the following situation: Myself and my Wife had a mortgage on our house with the Bradford & Bingley Building Society which we obtained in the late 1980's for our three bedroomed mid-terraced house.

In 1991-1992 we got into difficulties due to a fall in personal income and fell into arrears. We tried to keep up with the repayments but because of our financial situation couldn't keep up with the demands on our finances. There was a period of discussion with the building society about finding a way to right the situation as far as our mortgage arrears were concerned. After failing to come to a reasonable agreement which we could afford, the Bradford & Bingley presented to us the option of a `Mortgage Rescue' scheme.

Basically the package consisted of repossessing the house and selling it on to a housing association. We would then be able to rent the property thus keeping the same roof over our heads. The rent was a sum that we could afford.

On the face of it this seemed to be the answer to our problems and we went ahead with it in 1993. We didn't really feel that we had much option - people all over the country were losing their houses at the time. The property market had finally crashed after the eighties boom, and if we had sold we would have been into a negative equity situation and we didn't want to be homeless.

Seven years on we are still renting our house. We are in a position now where we want to own our own home again. But because of the (very restrictive) agreement that we signed for the Mortgage Rescue, we are facing the prospect of having to start from scratch on the house buying ladder. The reasons for this are as follows:

When the building society sold the house to the housing association there was a shortfall of some #11,755 (which included #2303 of morgage indemnity insurance). Signing the contract committed us to paying this sum back whatever happens. We are still paying now.

Even if we raise a mortgage we have no right to any of the equity that has since accrued in the property. If we bought the house back now we would have to pay the full market value, the profit would be split 85% to the Bradford & Bingley and 15% to the Housing Association. (We have this in writing from the society). Even though based on the current value of the house, the society would cover their original losses (and then some), we would also still owe the shortfall money. We would be in a worse position than many first-time buyers.

A document that we have states that the sale of the property to the housing association would be financed by a loan from the building society at an interest rate less than the commercial rate. The question we have asked ourselves is why couldn't the society have extended such a generous offer to ourselves at the time of the rescue, at least as a short term measure? The bottom line is that we have been financing the purchase of this property for the last seven years but will receive no benefit from increases in property prices.

I have taken legal advice on this but the solicitors I have spoken to seem to think that there is nothing we can do as we signed to the agreement and all its terms. I feel that we were taken advantage of by the society at a time when we were pretty desperate. They even added all the solicitors costs for conveyancing etc to our bill!

I would be very interested to hear from anyone else who has gone down the Mortgage Rescue route. It would be helpful to know of any other's experience in similar situations, especially if they have been dealing with the Bradford & Bingley.

-- gregory smith (gregory.smith@ukonline.co.uk), March 11, 2000

Answers

I am a Money Adviser at Kidsgrove CAB and have some clients with similar queries about this scheme. They have recently been told by B&B and the Housing Association that a new Housing Management company is to be appointed despite papers showing the house was sold to the HA! Why are B&B still able to decide this? Have you received similar letters?

I would be interested to hear more about your situation and any answers you have received.

Chris

-- Chris Evans (Yes really - I was there first) (chrisevans@kidsgrovecab2.freeserve.co.uk), July 18, 2000.


My ex-husband and I also used the B & B Mortgage Rescue Scheme. There was a shortfall of 9,800.00. We split this equally and signed a form stating we would pay the shortfall. I make an arrangement with B & B straight away and commenced monthly payments of 50.00. I have been paying this for 5 years. My ex paid nothing. He stayed in the property and rented it, he was eventually evicted for non payment of rent. B & B recently wrote to me with an income and expenditure form which I did not complete. I made an lump sum offer of 382 less then the outstanding balance. They would not accept without I & E form. I have not returned it as every letter I read on this web site indicates they are not entitled to my personal financial details. Unsure as to whether just to stop payment and see what they do.

-- rosemary (rosie123uk@yahoo.com), January 24, 2001.

I too joined the B&B Mortgage Rescue Scheme but unlike Gregory I have it in my writing from B&B that they stand to make no profit whatsoever from the resale of the property. I do not believe them. I have written to my MP and am prepared to go to court - they have lied about other things so I will be interested to know just how much they stand to make from any resale.

-- Bet Payne (ukmortgageregulationsucks@hotmail.com), February 08, 2003.

With regards to B&B relying on any documnet you signed: Anxious to keepa roof over your head, you may be able to claim that you enterd into the agreement under duress with a view to defending their claim. JSM

-- Stuart Mather (lva@chester-city.fsnet.co.uk), February 22, 2003.

we to went down the mortage rescue line,have been paying 50 per month for six years,in january this year they finaly got in touch we had 36000 outstanding thats come down to just over 30000 we are now trying to get a lump sum together to finaly get shot of them ps we managed to get back on the housing ladder by moving to a cheaper area of corse now house prices have gone up they know their money is safe should have just gone bankrupt in the first place

-- david levings (david.levings@ntlworld.com), May 01, 2003.


This sounds like Bradford & Bingley have scandalously taken advantage of you all at a time when they know there was not much you could do, and seeing the positions you were in when you signed these agreements, I should image good legal advice was too expensive to obtain. People will sign anything when they are desperate and unable to think clearly.

It would seem a good idea to me that you *all* write to the Financial Ombudsman about this matter. I think they usually only uphold complaints for three years after the error is realised, but it's worth a try, especially if you all get the name of one person and write to that person. You certainly won't get anywhere if you don't do anything. BUT, it really needs you all to write for them to take notice.

I would also suggest copying your MP's and even perhaps the Prime Minister. The Halifax offered a similar scheme, which at the time was completely out of our financial grasp, but it wasn't as dubious as this one. I think I would also contact the newspapers - the Daily Mail love these type of scandals, again, the more of you that contact them independently, the more notice they will take.

Tracey x

-- One Angry Mother (madcow678@hotmail.com), May 02, 2003.


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