Asking for a mortgage reduction??? Help please.

[lloydjones]

I have an interest only mortgage with Mortgage Express (Bradford & Bingley), this was purchased from my original lender GMAC in 2008. I believe many of the other companies which purchased mortgages from GMAC have since offered substantial reductions in the mortgage for their customers to move to other lenders. Unfortunately the only offer I have received from Mortgage Express is a waiver of any early redemption charges! Mortgage Express/Bradford and Bingley have since been nationalised and are not taking any new mortgage business. I am led to believe that they are going to be trying to reduce/clear their mortgage portfolio by 2019.

Therefore, I am planning on asking Mortgage Express if they would consider 'writing off' 20% of my current mortgage debt, as I currently owe the same amount as the approximate value of my property and have zero equity. This would provide me with 20% 'equity' and allow me to change to another lender and get a competitive rate on my new mortgage. I would like my new mortgage to be a repayment mortgage rather than interest only.

Has anyone tried this and been successful in the past with another lender? Is there a chance Mortgage Express my go for this offer?

Finally, when Mortgage Express purchased the debt from GMAC would they have paid the full amount for it or purchased it at a reduced rate?

Thanks

[PlanB]

Re: Asking for a mortgage reduction??? Help please.

when Mortgage Express purchased the debt from GMAC would they have paid the full amount for it or purchased it at a reduced rate?

GMAC are an American 'warehouse lender'. This means they use other people's money to provide your mortgage by pre-selling the product to a third party before you'd even submitted your application.

Mortgage Express had a contract with GMAC to purchase 25,000 mortgages per month which were packaged (including the underwriting, credit searches, valuations etc) by GMAC. They would have bought them as a portfolio. What they paid for the individual mortgages is not relevant to you because your original loan contract remains the same - just like any credit card account sold to a debt purchaser.

The price paid would have factored in all sorts of other stuff such as interest on the money loaned upfront to GMAC which was provided to you to complete on your purchase. The accounts normally changed hands after only one direct debit payment had been taken from the borrower's bank account. It was always destined to be that way.

[PlanB]

Re: Asking for a mortgage reduction??? Help please.

I am planning on asking Mortgage Express if they would consider 'writing off' 20% of my current mortgage debt, as I currently owe the same amount as the approximate value of my property and have zero equity. This would provide me with 20% 'equity' and allow me to change to another lender and get a competitive rate on my new mortgage.

Is there a chance Mortgage Express my go for this offer?

I'm inclined to say that you have no chance of getting a 20% write-off because there is no incentive for Mortgage Express to play ball. They had an amnesty on Early Redemption Charges because they weren't losing any money on the deal except the bonus, or windfall if you like, of a penalty charge. They weren't giving anything away except potential profit.

I'm only aware of anecdotal evidence of Mortgage Express giving discounts to get rid of customers but if you have definitive proof then I would love to see it (PM me) because I have a file full of ME customers who were ripped off by them during hasty repossessions and I intend to seek compensation for them. All evidence will help.

I'm aware that Mortgage Express may have given small incentives (other than waiving the ERC) if the borrower used their brokers to find an alternative loan product which would have paid them (ME) a commission. There's no such thing as a free lunch with the mortgage industry.

Having said all that it's got to be worth a try but think carefully how you 'sell' the idea to them. You need to pitch it as something that will benefit them and not something that will benefit you such as £xxk in the bank to fund a new property purchase. They'll be happy for you to sod off and live in a cardboard box and have no interest in making your next home owning step easy. Because as long as you are on their books you're an income stream since you are paying interest at a relatively high rate on your mortgage. That's where they are getting their profits from to pay back the Government without doing any damage to their capital base.

Blimey, I'm beginning to sound like I know what I'm talking about

[PlanB]

Re: Asking for a mortgage reduction??? Help please.

I've got your PM