www.iva.co.uk

A warning to anyone considering (or who may know someone considering) the sale and renting-back of their home.

In certain parts of the country scams are running that will end in disaster for those trying to keep their homes.

The person buying the property may pay 70% of the market value of the house. They can obtain a mortgage for 85% of the market value of the house.

That means they may pay £70000 for a house worth £100000, and obtain a mortgage for £85000. They now have £15000 of cash in their account.

Multiply this by 20 homes and there's £300000 of cash in their account.

The mortgage payments are never made and the purchaser vanishes with the cash. The houses are reposessed by lenders leaving the tenant at serious risk of being made homeless.

This is happening. Anyone considering sale and rent-back should be aware that this industry is currently unregulated.

As you and I well know Andrew, there are some very unscrupulous operators out there.

How can people stop this happening to them?

Vile people[:(!][:(!][:(!]

Ther have been so many programmes and press activity on these buy and rent back companies, are there any genuine ones out there at all I wonder?

There are the odd one or two who are genuine, and you have to feel sorry for them, they all get tarred with the same brush.

That said, it's not something I would ever consider doing.

I guess it depends how desperate people really get. Those who don't know about the scams could quite easily get caught out.

Yet again this is something i thought the Government were considering in order to keep people in their homes. Some time back a scheme was suggested whereby the Coucil could buy your home or a share of it and you could then rent it back from them.
The last i heard is that this would be introduced in January but apparently Councils have not been give any Cash to support the scheme.
Surely this would be money well spent, espcially if people were give the option to repurchase the Councils share of the property at a later date.
Instead of helping out all these Fat Cat Bankers will Mr Gordon Brown please do something POSITIVE for this country insead of keep talking about it. Let's see some action.[}:)][}:)]

That'll be the day!

Yes Skippy, you are right.
What about these Tax cuts now. They seem to bring in new schemes every week.
By the way, how is your back.
Really hope you get it sorted.
Take care xx

I doubt if the council would buy mine!!!

Thanks Karenanne, my back and neck aren't too bad. It hurts when I wake up and then loosens up when I move around. I'm seeing the osteopath again next week, so hopefully with a bit more cracking and clunking he'll sort me out!

Really hope you get it Sorted skippy.
I am off to Southend now to see the Chuckle Brothers turn on the Xmas lights so hoping it will not rain.
Talk soon.
Take carexx

Have a good time xxx

I have seen some of the results of the sale and lease backs Andrew was talking about. They are as he says a complete con.

People never see the money they believe that they are going to raise from the agreement.

They are promised a below market rate rent for a life time tennancy, when in fact they are given a year's tennancy agreement. These are then usually renewed for six months or another year with a much higer rent.

The new owner invariably defaults on the mortgage and the new mortgagee reposesses the property.

I would recomend that people steer well clear of them as a matter of course. If they have equity in the property which they would like to realise they should seek the advice of a reputable mortgage broker of financial advisor.

The new government scheme which has been mentioned may work - my worry is that it will be passed onto the private sector as it is unlikely that the councils will be able to finance such a scheme. More people could then be put at the mercy of these con men.

I have seen a few cases so far that after the sale and rent back the seller has had insufficient funds to clear debts so have declared themselves bankrupt.

The problem is that the Official Reveivers are VERY keen to investigate these sales as being under value and may actually reverse the sale. The end result will also be that the poor folks in the middle are left without a home.

One needs to tread very carefully.