Buy to Let Mortgage Lender Refusing Lump Sum Overpayment on Interest Only Mortgage

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

    Buy to Let Mortgage Lender Refusing Lump Sum Overpayment on Interest Only Mortgage

    I have had five B2L mortgages on properties with a small building society since 2006. I have been selling my B2L portfolio over the last three years in preparation for retirement. I now have only one mortgage with this lender. 20 year term with 7 years remaining. having sold 5 properties in the last two years (including two with this lender) I am now cash rich and wanted to pay £60,000 off a £105,000 mortgage. I transferred an initial £24,500 which the building society refused to credit to my mortgage account. My mortgage agreement allows over payments, and the FCA positively encourages them for interest only mortgages.
    They refused to credit my account because of Money laundering rules they have put in place. After a pretty heated discussion and the involvement of their CEO I agreed to instruct my solicitor to confirm to them that I had sold five properties (including the two with them) and had received substantial funds as a result.
    I thought this would satisfy them (as the CEO had promised) but their Head of Financial Crime (yes that's her real title) ruled that this wasn't sufficient proof and the solicitor had to produce completion statements and proof that funds were transferred to me. My solicitor and I thought this was ridiculous so I withdrew my permission for her to deal with them any more. The Head of Financial crime then came crying back to my solicitor saying she may have made a mistake, but my solicitor said she was now not instructed to respond.
    At this point I asked advice from the Financial Ombudsman and they said I should make sure the building society's nominated complaints officer was aware of the issues and gave me his name. They advised that the CEO was not the appropriate person to be dealing with.

    So I emailed the nominated person pointing out that I had been advised by the FO to advise him of the complaint, and that his building society was holding £24,500 of my money but refusing to credit it to my mortgage account.

    I almost immediately received a terse, if not rude reply, saying the money would be returned today (it hasn't been) and he would deal with my complaint in due course.

    In my view they are in breach of my Mortgage Agreement which clearly allows over payments. Do others agree?

    I suspect they know they have handled this very badly bearing in mind my customer profile, never missed a mortgage payment etc. The advice to businesses regarding money laundering is pretty clear in that they need to act proportionately and know their customer. If they bothered to look on the Land Registry or Zoopla etc.regarding the two sales of properties in the last two years that were mortgaged with them they would see a substantial amount of equity was released, but they refuse to do this.

    Has anyone else incurred this where effectively a building society is refusing to let a customer pay down their mortgage on what I believe are spurious nonsensical anti-money laundering rules? Someone pointed out what will happen at the end of the term if I refuse to show proof of funds but am prepared to repay the balance of £105,000?

    Thoughts anyone?
    Richard Oppé

    Informed, Independent and Honest Property Advisor

    #2
    The building society is not refusing to allow you to pay down the mortgage, they are refusing to transfer a large sum of money out of one of the accounts that they manage.
    Which is something completely different.

    I think that they are totally within their rights to do that and that you were wrong to tell your solicitor not to give them the evidence that they requested.
    That's just shooting yourself in the foot (and would cause further suspicion).
    You should simply have let the solicitor comply with the request.

    I have recently paid off a mortgage and had to provide evidence of the source of the funds and show the path of the funds from that source. Which took a bit of time and was a bit of a pain, but it's hardly the end of the world.

    It isn't reasonable for you to expect them to do any research themselves, because there's more to the process than that. Your solicitor is required to do money laundering checks themselves so their involvement would be a significant factor in satisfying the money laundering concerns.

    It is quite possible that the building society has been a bit over-zealous and that you might, as a consequence, not do further business with them, but I don't think they're being ridiculous.
    I'm quite impressed that they take money laundering so seriously because most organisations don't take it anywhere near seriously enough.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      In circumstances like this quite likely/hopefully HMRC have already been informed of suspicious financial manoeuvres being plotted.

      Given your displeasure with your lender, why not just pay the mortgage off and close all accounts with them, job done?
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

      Comment

      Latest Activity

      Collapse

      • Workplace Pensions
        mojo_scotland
        Going off on a slight tangent here.

        My workplace auto-enrolment pension now has me contributing £150 per month. My employer matches this.

        My statement reads, in today’s money...

        At 65 years old (I’m 36 now) I may receive.

        11k tax free. ...
        21-05-2019, 09:07 AM
      • Reply to Workplace Pensions
        leaseholder64
        The ones I've always seem assume no further contribution, but the OP seemed to suggest that the scheme has only just started, and, given the figures used for these estimates have gone down a lot from when I was first in a money purchase scheme, I think a £44k pension pot in present day terms couldn't...
        22-05-2019, 10:36 AM
      • Reply to Workplace Pensions
        Welshie
        I believe your pension statement is based on a calculation of what your pension fund is worth today and inferring no further contributions made. So if you stopped paying in to your pension fund, this is what your fund could potentially be worth at 65.

        Each year you contribute more, this...
        22-05-2019, 09:50 AM
      • Reply to Workplace Pensions
        alice123
        its not as bad as mine your better off than me -
        my workplace pension 53pence a month and im 6 years off retirement i think ill get about 50 pound a year so im going to have to work beyond retirement doing on line work and stuff like leaflet distribution but id be happy with the 11,000 a year...
        21-05-2019, 14:50 PM
      • Reply to Workplace Pensions
        jpkeates
        I'm a little bothered by the low figures.

        If the "tax free" amount is meant to reflect the position of today (ie. you can take out 25% tax free), it would mean your pension fund would be £44k when you are 65.
        Which means that the fund must have lost more than half its value...
        21-05-2019, 14:24 PM
      • Reply to Workplace Pensions
        OneSmallStep
        Hi,

        The monthly return does appear 'low'. However, I put as much into my pension as possible each year to bring my income into a lower tax bracket.

        Think about how much it is actually costing you.

        For £300 contribution each month it is only costing you £120 (assume...
        21-05-2019, 14:08 PM
      • Reply to Workplace Pensions
        leaseholder64
        What does the statement assume about future contributions? I'm wondering if they are assuming a fixed £3,600 pa.

        You can always transfer to a higher risk investment, although it won't be worth doing that until a few years have built up.

        There are a number of variables that...
        21-05-2019, 12:47 PM
      • Reply to Workplace Pensions
        sam_cat
        Opted in and overpaying to pull my income (inc rentals) into the lower tax bracket....
        21-05-2019, 10:13 AM
      • Reply to Workplace Pensions
        theartfullodger
        You are likely to get better response from this more specialised forum

        https://forums.moneysavingexpert.com...splay.php?f=19

        Artful: 71: State pension - thank you you lovely taxpayers - & some private pensions: (Life ain't fair, sorry..)
        21-05-2019, 09:15 AM
      • Freehold ground rent investment | few questions
        value__investor
        Dear all,

        I do not have much experience with ground rents but wanted to start looking at it in detail. Couple initial questions that came to my mind

        1) What are the obligations of the landlord?

        2) I read that the landlord actually has to manage the building?...
        06-05-2019, 16:09 PM
      Working...
      X