Don’t pay the investment mortgage, just pay us

Something that is often overlooked when people hear mortgage statistics is the various shenanigans that are going on underneath the headline figures. For instance, people are often asked to stop paying investment mortgages and to divert the rent to the family home. This is one creditor playing hard-ball with the borrower at the expense of another creditor.

2013-11 Bank of Scotland - pay us not the RIPWhile it does make sense to prioritise your family home, there is also the issue of wondering why the rent shouldn’t go to the investment loan provider given that it is generated from the asset they backed? Clearly this is a judgement call, but when the family home lender is effectively asking for that income then it strays into the area of being an ethical one as well.

The letter to the left is one such example, while it doesn’t state ‘shaft the investment loan provider’ as clear as you might expect, it was the basics of what the borrower was told to do.

They use a bankers vernacular which says ‘we won’t do any favours for you based on your income and using same to pay for your family home when we know there is rent coming in which you could divert from another bank to us’.

Now the borrower has the family home sorted out but as he stings the investment property lender they are now on his back and making all of the same threats and also stating that even if he pays off his home they’ll get a judgement one day. As the investment loan is larger than the family one they also have him over a barrel if he tries for an insolvency solution.

This is just another example of the mire we call our mortgage crisis, and it makes finding solutions exceedingly difficult.

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