The lenders which mortgaged the six properties in question – BM Solutions and Bank of Scotland, now part of Lloyds Banking Group, and Mortgage Express, part of Bradford & Bingley, say they are not responsible for the valuations. These were all carried out by the same surveyor, a firm on their approved panels, this week’s Money Marketing reveals.
The three investors bought the properties in the same area of Sheffield in late 2007 or early 2008, which were each valued by Lexicon Surveying Services, now in administration.
The investors have not been able to earn the rental income forecast, leaving them struggling to cover mortgage repayments. One investor, who did not want to be named, has had her two properties repossessed and owes BM Solutions and Mortgage Express more than £300,000 as they sold for less than half the valuation price. All six properties were bought from the same development companies, Shevell Properties and Pimlico Property Investments, which have since changed their names to Camden Symonds and Symonds Camden respectively.
The property firms referred the borrowers to mortgage broker Ambergate Business Services, which is now in administration. The investor whose properties were repossessed says she has no means of repaying this debt. Her first property was valued at £335,000 in 2007 and sold for £145,000 after repossession this year while her second was valued at £325,000 and recently sold for £160,950.
The Nationwide house price index shows that a property in the region valued at £325,000 in Q4 2007 would have fallen by around 12 per cent to the current date.
Single mother Maureen Macdonald, 39, has handed back the keys for her three properties to her lender, BOS. She says independent revaluations have shown her properties had been over-valued by between 75 and 90 per cent.
In the worst case, a property valued at £325,000 by the panel valuer in December 2007 was retrospectively revalued by independent surveyor Hale Saunders as having been worth just £165,000 at the time of purchase. The revaluation said rental predictions had been “grossly excessive”.
The third borrower, Chris Fletcher, 53, is struggling with mortgage repayments to BOS with rental income around £400 a month less than forecast and his property apparently over-valued by £100,000. His complaint to the Financial Ombudsman Service was rejected.
Fletcher says : “Sure, we have all made poor decisions in this process and we all have to learn our lessons the hard way sometimes.
“But when the banking fraternity get bailed out with billions of pounds of taxpayers money to enable trade tocontinue, I find it sickening that I cannot even get a face-to-face meeting with BoS to discuss how to manage our joint crisis.
“We have been left on our own to sort this out. And if it all goes wrong, after taking all that I own, they will send on the bill for the shortfall to the tax payers. Banks need to be accountable for the people they engage to further their commercial needs.”
Fletcher adds: “We need the banks to agree to a rescue package like the one they received from the British taxpayers – whereby a lower interest rate would enable us to maintain the property and get it back into good shape.
“I’m not looking for billions, like the banks received, just time to help me get back on track.”
Lloyds Banking Group and Mortgage Express say they acted in good faith as the valuer was RICS-approved.
A Lloyds Banking Group spokeswoman says: “For those customers who subsequently find themselves in financial difficulty, we always ask that they make contact with us as soon as possible.”
A Mortgage Express spokeswoman says borrowers are encouraged to get their own more detailed valuation reports and any suspicion of wrongdoing would be investigated.
Camden Symonds and Symonds Camden could not be reached for comment.
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