Lender seeking valuation on property mortgage that’s in arrears

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Lainey_W75

New Member
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Hi,
I’m looking for some info please.
Background: apt purchased 2009, lived in until 2014 and then rented. Aug 2020 tenants vacated, apt riddled with mould and long story short structural defects resulted in water ingress seeping in since construction. Entire development subject to defects etc and work ongoing.
As a result of loss of rental income mortgage has gone unpaid since Sept 2020 as property can’t be rented out in the condition it’s in. Work still not completed to exterior of my unit. I’ve engaged with lender throughout, last SFS sent in about 3 weeks ago. Received call today asking if I’d give approval to get it valued at no cost to me. Caller at pains to say I’m under no pressure, can refuse etc but at no point can explain why they’re seeking a valuation. I was told a valuation is part of the SFS process and I pointed out I’ve been engaging in the SFS process since Aug 2020 and this is the first I’ve been asked about valuations. Still no proper explanation forthcoming so can anyone throw any light on why I’m being asked? What are the implications of a valuation if I give permission or don’t?
Many thanks
 
Lainey_W75 said:
As a result of loss of rental income mortgage has gone unpaid since Sept 2020 as property can’t be rented out
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Lainey_W75 said:
I’ve engaged with lender throughout,
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If you are not paying your rent, you are not engaging.

It's tough that you are in this position, but you should be paying the rent from your income - whether than income comes from rent or from your employment.

Brendan
 
Fair enough Brendan..if I could pay I would, believe me. By engaging I meant I’m in touch with lender regularly etc and haven’t buried my head in the sand. I’m an accidental landlord with a property that’s not currently safe to put any tenant into. TBF my lender has been understanding but the reason for my post was to ascertain WHY they’d ring asking permission to value the property. If anyone could throw light on that I’d appreciate it.
Thanks
 
The lender would have a valuation from when it originally gave you the mortgage. Presumably they want to get an idea of how this has changed in the meantime given the structural problems with and deterioration in the property. In the circumstances it doesn't sound that strange to me whether or not it's specifically mentioned in the CCMA/MARP processes. I'm surprised that they are being so understanding if there have been no repayments for a year and a half.
 
Lainey_W75 said:
Received call today asking if I’d give approval to get it valued at no cost to me. Caller at pains to say I’m under no pressure, can refuse etc but at no point can explain why they’re seeking a valuation
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My advice is not to discuss matters on a phone call. Do everything in writing so you have a documented trail.

Write and ask what the purpose of the valuation is.

You should also consider what your strategy is; will the remediation work be completed? When? Do you want to keep the property or will you seek to sell it?
 
In essence they want a valuation to quantify their exposure & potential returns on a foreclosure imo.

If it has gone up in value vs. The mortgage you took out then there is "latent" value in the property that is not accounted for in their mortgage with you. It may be more attractive to take over the property.

If the opposite is true and it has depriciatated due to market forces and the issues you described then it is less attractive to pursue and the lender may be more likely to allow the situation to persist with a view to you turning the situation around and making good on the arrears.
 
Brendan Burgess said:
If you are not paying your rent, you are not engaging.
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That is not true, under the CCMA it does it say if you are not paying your rent, you are not engaging.

There are a number of ways you can be deemed as not engaging but it's not as simple as not paying. If you are providing the required info for them to assess your case then they can't really deem you as not engaging as they have to provide something to you. (eg a restructure, or decline letter deeming it unsustainable etc).

In regard to the valuation there could be a number of reasons,
1) depending on value could depend what arrangement they will offer. If it is borderline if its positive or negative equity they may ask for a valuation to be carried out.
Being a rental property if its in positive equity they could just turn around and say its unsustainable based On current circumstances and ask you to sell. Or if in negative equity they may offer something with the hope it does return to positive equity in future and they can then request a sale.
But your circumstances with the issues with property could impact that, and certainly could impact the price of the property and so that is why they might want a valuation.
 
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