Sorry Tin Soldier but I do have it, (Calling up Notice) copy to my husband as joint mortgage holder oh and one to my tenant too for good measure.[B)]
I wrote to the broker -long story, we were ill advised, never gave too much thought to the LTV as we intended to keep it long term, into retirement and pass to our daughters. Never had a personal illustration regards currency fluctuation and thought the worst would be we'd be unable to refinance. No reply yet.
I wrote to FSA and their call is that they cannot intervene as BuyToLet is unregulated mortgage business and we do not reside at the property address.
Worst part is our tenant has been with us 2 years longer than we have had the mortgage, looks after the place well and has never missed a rent payment.

TDA-Yes I do have other unsecured debts which are being managed in a DMP at this point. Total amount wouldn't warrant any action but the shortfall on this will make all the difference.

Is there some kind of covenant (I don't know if that's the correct term) in the mortgage that they can call it in (or call their security in) if the LTV slips below a certain point Pamjo?

In terms of a shortfall, mortgage lenders often aren't in a huge hurry to get their hands on the money. I'm not offering this as advice as I do not know enough about your situation, but some people in a similar scenario choose to sit things out for a while to see if a development of equity in other properties becomes a potential resolution for the situation.

It is a 30 yr term loan so LTV must be based on value in 2007 when we re-mortgaged to this product, ie based on value being equal today to 2007. I think that's probably fairly accurate.
'Default under this facility, or in payment of any other amount due to the bank may result in the Bank taking possession of and selling the Property'
Another clause refers to the bank being Indemnified against losses -I suspect this may be at the root of it?
Under conditions it states 'The bank may demand repayment of the facility at any time for any reason'
Further there is a clause stating @If the bank determines that the ratio of the principal outstanding to the security value exceeds the approved ratio, the bank may at its option give notice to the borrower within 10 days to either or a combination of the following so that the ratio is reduced:
1.Provide additional security over an asset//s acceptable to the bank
(value determined by the bank)
2. deposit in currency bank shall mspecify, cash deposits in available funds and provide such security as bank shall require.

I take your point on sitting it out but still have to reach 2nd October and see what they do?

I can't provide funds or security nor arrange bankruptcy b4 then anyway.

It's the "approved ratio" bit that seems to be relevant. That's what I thought when I used the word "covenant".

That seems like an incredibly complex and risky mortgage. I hope the adviser provided sufficient and clear warnings about the currency risk and unusual clauses Pamjo?

Was it described as a buy-to-let mortgage or a commercial loan?

Clearly we never understood that reposession and pursuit of a substantial figure would be the outcome of currency fluctuation.

The broker's initial info said they always meet clients to highlight the 'mechanics ' of a currency based mortgage. This was never offered.

At the time, it was a cashflow measure as I was about to stop work for a couple of years. The exchange rate then was 242:1, Yen:GBP (Now approx. 118:1)
For the first few months we enjoyed a great reduction in cost,instead of aprox £360 per month, we started to pay £approx £400 per quarter. It was however shortlived and soon our quarterly payments rose as the currency moved until now it is almost £800 per quarter.
The broker advised that it was likely to be an attractive product for some years to come as rates changing in Japan were likely to correspond with rates elsewhere. We understood that to be an indication that rate changes would not be an issue. I now see that e probably referred to interst rates,not exchange rates.
Our long term view was that over a 20 year period, even if the Yen doubled in value, worst case scenario(we thought) the property would not be worth half the amount it was when we bought it in 2004. We thought we'd be at worst waiting on a market catch-up whilst managing to cover void periods, maintenance and repairs from a healthy cashflow.
I am actually fairly sure that Lloyds beleive they are in the right to pursue this and we should have been better informed ourselves as to the practical possibility of this. Hard lesson learned. Just not sure what to do for the best re. the repossession,a) accept and assume they have indemnity or wouldn't want to chase this with no prospect of realising funds.b) Await their decision and next notice after expiry of the calling up c) Await notice of a sale then apply for bankruptcy with a known figure d) do nothing and have it hanging in the background indefinitely if the lender is slow to sell it.

Thanks again for all your comments, I think the repossession is actually inevitable, it's colouring in the detail around that I'm focussed on.

It doesn't sound as though there is any hurry to make any serious decisions about dealing with the debt that may be created if this all goes ahead Pamjo.

Are you going to challenge an attempt to repossess? From what you've written my non-specialist view is that there are several possible grounds for objection.

You may wish to speak to a solicitor or Shelter to get another view on this. If possible, prevention would be better than cure?

Yes, I'd rather it was able to be avoided because otherwise, everything else is manageable.
I spoke with Shelter, they advised speaking with FSA. I think their focus is more towards helping a tenant or residential home owner. I am aware of the 2nd October being the date the calling up notice expires but I need to get accurate information re. what is likely after that, timescales etc.
Thanks

Mind going into overdrive-more questions!
If My lender sought to make me bankrupt would I still be allowed to pay the IP interst, whatever the size of that fee to keep my properties which have little or no equity?

Can anyone advise re. repossession process-if the lender claimed their indemnity on repossessing or realising a sale price, is there any obligation on them to reduce the amount I am pursued for? I know this is a legally oriented question and if anyone can suggest a link or forum where this scenario may have been encountered, I'd appreciate it.

Hi Pamjo.

I doubt there's any reason for them to reduce a shortfall claim.

If you are made bankrupt your properties will be dealt with in the same way as if you chose to become bankrupt. Whether a nominal fee will be asked for, and how it is structured, will depend on the policy of the IP.

If there's no equity prior to discharge there is no point in selling them whether or not a fee is paid.

If such a fee is requested you cannot pay it. It will need to come from a third party.

To me this seems like double-dipping? If their loss is reduced by any indemnity, am I right in saying your perception is the lender can receive an indemnity payment and still pursue the difference between the mortgaged amount and the selling price?

Again, to clarify, if the properties have zero or insufficient equity when a creditor applies for sequestration, the IP interest would not necessarily be bought as they would have no gain from a sale?
For how long after the discharge would equity subsequently accrued be returned to the trustee/IP
Can the IP interest be bought by a family member at any point during sequestration?
If bankruptcy is not initiated by me /us, how long does it last 1 yr/3yrs or longer?

What do you mean by indemnity Pamjo?

How is that reducing their loss?

hi
Firstly -thank you for your many replies to me on a saturday!

The indemnity as I understand it would be an insurance the lender can claim against in the event of a loss through realising less on sale than the existing mortgage.

Hi Pamjo.

Assuming you are talking about a mortgage indemnity guarantee I don't think it would normally do much to help you. That type of policy typically protects a lender but not the borrower.

If such a policy exists the lender may recover some or all of any loss from an insurer. The problem is that the insurer is then likely to try to recover that payout from you.

You should check the details of your particular policy though.