Pepper Vulture Fund Escrow A/C and refusal to reduce Mortgage Balance

One other thing, that I was wondering about....

Why are you only selling three of the five properties?

If you sold the five investment properties, would you be able to clear the full debt?

Also, if you sold all five properties, would there be a notable capital gains tax bill to pay, and could you pay it, in addition to full debt repayment?
 
I’m wondering how and why it took them 6 months to give ‘consent to sale’ ?
Surely their preference would be for you to sell all of the properties. Would it not repay the loan in full ?
 
Had that recorded call with Paper who confirmed next months payment will be the same as the previous one and only if I reapply for the mortgage with them on either an interest only basis or full repayment will they reduce the capital and charge interest normally. This sounds like coercion TBH and no mention of if they will maintain the Tracker +0.75 for now....
 
Remaining two will be sold over time towards the end of the remaining 8 years clearing the mortgage or close to. CGT will be taken care of from other funds. But it is substantial so only 3 can be taken care of a this point. (higher purchase price properties are being disposed of)
 
So write to them summarising the phone call.

Set out your case.

Ask them by what means they are charging you the full repayment.

Tell them that this is putting you under extreme financial pressure and you will hold them responsible for any damage done to your credit rating as a result.

While you will pay this month's DD under protest, you will have to cease the DD if they do not fix it within 14 days.

Ask for a Final Response letter so you can make a complaint to the Financial Ombudsman.

Check the Central Credit Register. I presume your record is already marked as having a defaulting/rescheduled loan so damage to your credit record is not that important.

Brendan
 
I’m not sure if there are any grounds for complaint here. The way mortgage is displayed is the Pepper IT system. They are charging interest on the overall net balance. Plus the agreed capital so what will the complaint be based on ?
I’m still puzzled why it takes 6 months to get sale approval. I thought you could just sell when you wish.
 
Mamamia22 said:
I’m still puzzled why it takes 6 months to get sale approval. I thought you could just sell when you wish.
Click to expand...

Not if there are 5 cross secured properties.

For example, a borrower could sell a property worth €300k for €200k which would reduce the lender's security.

So he would need permission, but it should not take 6 months.

Brendan
 
Hi, Correct Brendan, the interest being charged is not being charged on the reduced balance but on the original gross balance (1.6mill) with an allowance against the new capital balance monthly for the amounts in the Escrow A/C ( arrears A/C as pepper call it @5.25%) . This will not reduce the overall monthly mortgage repayments which is what you would expect as you reduce the overall balance.

In this case if 4 properties were sold for 300k each (ignoring CGT etc.) you should have a balance of 400k on the final property but pepper will continue to charge €8,777 monthly on the 400k until the mortgage is clear despite contract stating Interest only +2k per month. That's the complaint !! As the properties are sold the Rent supporting the €8,777 per month dries up making this completely unaffordable and in reality preventing the next sale from happening until this issue is resolved.

Why 6 months ? Pepper didn't seem to have a grasp of the portfolio and only when the request to sell was put to them did they have to go through individual valuations of each property plus all other sources of income and savings to see if their investment was sound. This took ages
 
Hello,

What did they say when you challenged them on the repayment amount, during the recorded call?

I assume that they provided their consent to the sale of the property in writing, was there any reference to ongoing loan repayments in that correspondence?
 
Re: Pepper phone Call:
When I challenged them on the call they stated they could only reduce the monthly repayments if the mortgage was on Full repayment OR full Interest Only But not if it was as they called a split mortgage. Makes no sense to me TBH but I can't ultimately have an €8,777 monthly mortgage on 400k, The balance would come down rather quickly much quicker that the 8 years left in the contract but affordability would be a huge issue in the interim .

A remortgage seems out of the question currently as other lenders are north of 8% on investment mortgages and in time the tracker is quite valuable as rates fall

Why not sell them all now? CGT on the portfolio is quite onerous and I need the remaining term to save for that. Trying as best as possible to clear this mortgage timely and in full but Pepper seem to be a stumbling block. This seems like an unusual situation to be in and I cant see their logic

Other colleagues of mine who were bounced into Pepper but who stayed on full interest Only at the time of the PTSB "Review" don't seem to have this problem and are able to make lump sum payments as they wish to reduce balance and monthly repayments
 
It's baffling....

I can only assume that they are reading brief screen notes, where someone has incorrectly described the arrangement as a split mortgage, without the full agreed details of the repayments available to them.

Get the formal complaint in immediately, including a photocopy of the documentation which details the repayment terms. I'd send it by registered post, and I'd also make a phonecall to record the complaint over a recorded line (while waiting for the post to deliver the written complaint).
 
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