Taylor George Wimpey Exchange Bond Company Making me Bankrupt Please Help Me

[exchangebondfraud]

I have been posting on the money supermarket website but no one has been really helpful.

 

I have below pasted what I posted there, there are many many victims who have contacted me, so anyone who can help please add constructive comments.

 

I went to see george wimpey that I was a teacher and wanted to buy a flat but had no deposit.

 

The sales assistant at the time told me the flats were being sold for 300k each to which I responded there was no way I could afford to buy one.

 

She then explained to me that she could give me 15 percent off making the price just 250k avoiding the expensive stamp duty, I then carried on and insisted that I had no deposit how could I buy this flat?

 

She then told me that the bank would value the flat at 300k on its completion and lend me up to 90 percent of this so that I would get 280k which I could give 250k to george wimpey and keep the rest.

 

I said I would think about it after which she continued to call me every single day harassing me asking me why I wouldn't want to have 20k in my pocket for free. In the end I agreed and gave her my credit card details which she took 2500 on.

 

Within a week she phoned me and said that if I didn't give her a further 10 percent that I would lose my 2500. At this point I told her that I never had that money and had only agreed to buy based on the fact I had no money. She said I needed to put 10 percent more down and legally exchange contracts. After she realised I didn't have the ten percent she offered me exchange bond and said don't worry this is an insurance policy so we can carry on.

 

I filled out all of the forms, and duly exchanged not realising what I was committing to. The solicitors I used, silvers, now silvers arch did not tell me of the liabilities that could arise from this exchange bond.

 

6 months later Rene had left the site and I was receiving more calls from george wimpey asking me if I had a mortgage. I told them that I never had one and then they asked me about the deposit. To which I responded that I had no deposit and told them what rene had told me. To this they responded that I could not borrow that much and that they had never even sold and of the flats there for 300k in the history of the site (even though this was my contract price). They told me I had better find a deposit and fast, and that if I didn't then they would draw down on their bond and bankrupt me for their loss of income.

 

At first I didn't understand what they were talking about and then later I felt very cheated, george wimpey had lured me by inflating their sales price 15 percent, made me formally exchange by threatening to make me lose my deposit if I didn't. Failed to explain the complexities of ebond and and if I didn't buy they would come after me for 25k and then bankrupt me.

 

As a teacher working for very little pay, this will ruin me, george wimpey have been completely ruthless since they got the bond in their hands.

 

Having spoken to experts on this matter they have stated that:

 

1) George wimpey misrepresented the sale by inflating their sales price and the rental values then discounting them to still unrealistic levels in order to lure me in as a buyer, apparently this is a tactic they regularly use. I thought I was getting 15 percent off when in reality I wasn't getting anything off, it was on this basis that I got involved. I was unable to do any due diligence because you cannot have a survey or valuation done or even get a mortgage for a flat that is almost a year away from being built so was very vulnerable.

2) George wimpey explained to me how I could buy the flat with no money because it was worth 15 percent more then I was buying it for. They now deny they said this and that it is mortgage fraud.

3) George wimpey knew full well that I could NOT complete especially as I had been very open that I had no deposit, yet still made me sign the ebond, this was so that they could conspire against the bond company and receive 10 percent of the value of their sale even if I didn't buy.

 

George wimpey at altius has acted fraudelently in many ways:

 

1) By misrepresenting the sale

2) By making me take out the exchange bond, knowing full well I could not buy the flat, their intention was to defraud the exchange bond company all along by using me as a pawn.

 

I have also contacted the fsa, as;

1) Exchange bond never advised me I could be liable for 25k in the event I didn't buy the property

2) Exchange bond never told me that the value of the property may go up or down or might now be worth what george wimpey said it was

3) Exchange bond never advised me of the fact I might not be able to finance the property or of any of the pitfalls

 

I am now forming a lobby of innocent people who have fallen victims to this type of [problem] and have found george wimpey to be perpetrating this on a very large scale. Can anyone else who has been done by this [problem] please contact me via this thread?

 

Can anyone out there help me?

 

The exchange bond company actually responded to the post by saying:

 

@ stuffedbywimpey

I am the Chief Information Officer for The Exchange Insurance Company (ExCo), the insurance company that issues Exchange Bonds.

EXCHANGE BOND - BACKGROUND INFO

The Exchange Bond is simply an alternative to putting down a cash deposit when buying a property off-plan. Instead of handing over a cash deposit (usually 10% of the property contract price), the buyer instead purchases an Exchange Bond, which their solicitors uses to exchange contracts. The buyer pays a premium for this (which is actually often reimbursed by the seller at completion). When the buyer completes the property purchase, they pay 100% of the agreed contractual purchase price and the transaction is finished. In other words, the Exchange Bond® does not fund the purchase in any way.

The principal advantage to the buyer in using an instrument such as an Exchange Bond is that they can either:

(a) invest their cash deposit or keep it in their own bank account earning interest while the property is under construction; or,

(b) if they do not yet have all the funds ready for the deposit, it means they can secure the plot, fix the price, exchange contracts, and use the construction period to save the necessary deposit funds at their convenience. From the developer's perspective, the Exchange Bond helps to secure a sale.

Should the buyer not complete the purchase, the seller then claims the deposit amount from ExCo under the terms of the Exchange Bond. (If a buyer had used a cash deposit and fails to complete, the seller retains the cash deposit which the buyer forfeits and is standard practice.) ExCo then recovers the deposit amount from the buyer. Had the buyer not used an Exchange Bond, they would have lost their cash deposit at this point anyway, so they are no worse off, in fact they are in exactly the same position they would have been had they put down a cash deposit.

The Exchange Bond is designed to help facilitate the transaction for both buyer and seller.

ABOUT OUR BUSINESS PRACTICE

It is important to ExCo that none of our customers feel aggrieved. We believe in transparent and open business practice, and never want to be accused of providing a less than professional product and service. We are aware that it easy for a company in our position to be accused of sharp practice. Therefore, we take great care to ensure the customer is fully informed. The steps we take include:

1. Insisting the customer takes independent legal advice when using an Exchange Bond, usually via their own solicitor.

2. We ensure that the following key point is clearly stated (not hidden away in small print) on all paperwork: a buyer must repay us for any claim on the Exchange Bond made by the seller if they do not complete the purchase.

3. We issue the Exchange Bond certificate directly to the buyer’s legal advisor.

4. We provide a ‘cooling off’ period where a full refund can be requested.

As part of our underwriting process, we always undertake a credit check on our customers. However, it is impossible to check a mortgage offer for those buying off-plan, since the property may be years from completion. We have to assume, therefore, that the customer has the ability to arrange finance for the purchase. Unfortunately, the present economic climate has left some buyers unable to source a mortgage at a sufficient loan to value or, indeed, not all, when historically they would normally have been able to do so. We do assume that the buyer does wish to purchase the property and is doing so of their own free will!

ABOUT THE POST ABOVE

I would urge the original poster to do two things:

1. Take independent legal advice.

2. Contact ExCo and talk to us. I can assure you that we will deal with this at the highest level.

I hope this is helpful.

Justin

 

To which I said:

 

Thank you for the reply Mr. Exchange Bond, its heart warming to see you came on the forum and wrote the above post.

I am not sure who came up with the concept of Exchange Bond, but who ever did, I think they should seek mental help in the form of a psychiatric assesment or get prescribed some shock therapy or something because they are quite clearly insane.

I appreciate your post, and the fact that you want to help people that your company have screwed, this shows some good moral fibre which must be embedded in your company.

To start with I would like to ask you the following question:

BEFORE YOU ISSUE A BOND, WHAT DUE DILIGENCE DO YOU DO ON A PROPERTY?

DO YOU HAVE ANY VALUATIONS CARRIED OUT?

DO YOU CHECK ANYTHING WITH THE DEVELOPER?

WHAT DO YOU DO?

Here is the answer

Absolutely NOTHING, squat diddly thats what you do.(EVEN THOUGH YOU OWE IT TO YOUR CUSTOMERS) - you issue bonds without doing valuations on the property being purchased, you do no legal research no nothing!

You dont check to see whether the developer or seller is telling the truth of the value of their completed product, you dont check to see whether there is an elaborate fruad taking place, all you are interested in is getting people to sign up to a bond and having them exchange as this is when you get your premium.

Clever?

I dont think so.

You see, your companies product is fundamentally flawed in many ways, the first being that you do absolutely no due diligence on the properties you issue bonds on.

Look what could happen (indeed what has happened in the case of this posting)

A develper (george wimpey lets say) has a flat for sale and they say its worth £1m, they have a buyer who has no deposit but you are willing to issue a bond for £100,000 to this buyer. George Wimpey allures the buyer in whatever way they can, and you push ahead with your bond (and take your tasty premium) and the deal gets exchanged.

12-24 months later, the buyer realises that the flat was only ever worth £100,000 and cant raise a mortgage to buy it, so defaults on the completion - in this case George Wimpey (the developer) comes after exchange bond for their £100,000 and draw down on their bond. George Wimpey is very very happy as they should be, they have sold the flat without actually selling it.

Now ethical Exchange Bond company goes after the buyer who defaulted on the purchase because of course Exchange bond acted in "good faith" and will now set the rotweiler dogs on the buyer to pay up that 10%.

LOL - What a good [problem]! everyone wins, unless of course the buyer cant pay up to exchange bond...

Another way your product is stupid is that you issue a bond, not knowing if someone can raise a mortgage or not, how dumb, I mean if the property is 12 or 24 months away from being completed then a lot can happen in this time, aside from the entire mortgage market changing (which it has) and the fact someone could lose their job and or ruin their credit score this could affect them getting a mortgage.

Why would you take such large risks?

 

Please HELP

[nevos]

Hi, it looks like you fell in to a bit of trap, on the other hand, you can see why the bond is attractive as a form of bridge finance though, reasonably expensive.

 

Let us assume, the property market is on the rise, as it was and has been for several years. You could buy a property without a deposit thus, giving you time to save up or add the deposit to the mortgage.

 

The problem here is, you agreed to go this route, they sent it to a solicitor who, should have explained it to you clearly.

 

If you can prove that the vendor acted improperly, then you may have a chance of getting the demand set aside though, I can imagine the type of developers offering the bond will for sure have done their homework and be above the law.

 

Your only hope in my opinion is: Try to prove you couldn't afford to buy the flat in the first place (I assume you couldn't) and you were pressured by unfair marketing/sales tactics.

 

What if you had found the deposit or mortgage and the flat rose in value by £100K, you might sing a different song right?

[exchangebondfraud]

I am penny less, and just wanted to buy a house, at taylor wimpey they did whatever they felt like...they even put me down as an investor, when Im clearly not. They said I would have no problems getting a 90% mortgage, in fact in the sales office she really pushed me so hard, she took the credit card details for the initial £2500 within 5 minutes of walking into her office, I wasnt given a chance to even think about it, and remember I didnt find out about the other 10% until after they had taken my £2500 and told me I would lose it unless I paid their 10% or used the exchange bond.

 

They told me exactly what to tell the bond company to get it issued and told me there would be no worries, just exchange, and when the flats are done you'll be 20k richer with your own place.

 

The whole thing was a [problem] by wimpey to screw the bond company.

 

I can prove I didnt have the money at any time, and still don't, I was in overdraft then, and had massive debts, and I am in overdraft now and in massive debt.

 

I paid for this reservation on a credit card, which I am still trying to pay off.

 

God Help me, I wana jump off a cliff, every day I wake up thinking about this, but thats another story and I should probably post it somewhere else. I never knew big companies like Taylor Wimpey were out there to screw people so hard like this.

 

The last poster said that if prices had gone up I would be singing a different tune, but the price TW was selling at to me, made it impossible for me to buy, they are trying to make me buy 25% above market value from 2007, so even if the market had been rising from 2007 to now, it wouldnt really have made a different unless it rose 25% or more. They basically sold it to me at a price where they knew I could never buy it.

 

B**tards

[nevos]

I can prove I didnt have the money at any time, and still don't, I was in overdraft then, and had massive debts, and I am in overdraft now and in massive debt.

 

Hi, IMO you would have a good defence to any claim on the grounds that, you were pressured in to purchasing, they did not in any way check to see if you could afford it etc...this is the same case with sub prime mortgages.

 

I'm not so sure here but, you may have some protection from the credit card company, if you feel you have been conned or the deal was under the table so to speak. I could be wrong but, give it some thought.

 

You have to take some of the responsibility for your own actions, also you could have got a valuation. Did they not inflate the sales price to avoid you having to find a deposit? A lot of Solicitors had been pulled up for this practice especially, in the buy to let business.

 

IMO you might want to take a good look at your debts and decide what to do next, at least try to get it all under control.

 

It is easy to get down hearted, a lot of people here on CAG have been or are in similar situations, the point is, we help each other, share experiences and in many cases find practical solutions to problems.

 

Fianlly, keep your head up and don't let it all get you down, we need to keep fighting sometimes.

[StevenRR]

ExchangeBondFraud,

How are you proceeding with the case ? There may be far more going on than you think, with both TW & EBC (EIC). Was it a Statutory Demand ? Do you know what happened to the Exch Co in April ? Have you checked the Land Registry web site to determine who now owns the property ? I may be able to help - please contact me.

StevenRR.

[bradfordlad]

A sad story, but I think the moral here is:

 

Don't take financial advice from a builders sales assistant

 

I note your comments here:

 

BEFORE YOU ISSUE A BOND, WHAT DUE DILIGENCE DO YOU DO ON A PROPERTY?

DO YOU HAVE ANY VALUATIONS CARRIED OUT?

DO YOU CHECK ANYTHING WITH THE DEVELOPER?

WHAT DO YOU DO?

Here is the answer

Absolutely NOTHING, squat diddly thats what you do.(EVEN THOUGH YOU OWE IT TO YOUR CUSTOMERS) - you issue bonds without doing valuations on the property being purchased, you do no legal research no nothing!

You dont check to see whether the developer or seller is telling the truth of the value of their completed product, you dont check to see whether there is an elaborate fruad taking place, all you are interested in is getting people to sign up to a bond and having them exchange as this is when you get your premium.

Clever?

I dont think so.

You see, your companies product is fundamentally flawed in many ways, the first being that you do absolutely no due diligence on the properties you issue bonds on.

Look what could happen (indeed what has happened in the case of this posting)

A develper (george wimpey lets say) has a flat for sale and they say its worth £1m, they have a buyer who has no deposit but you are willing to issue a bond for £100,000 to this buyer. George Wimpey allures the buyer in whatever way they can, and you push ahead with your bond (and take your tasty premium) and the deal gets exchanged.

12-24 months later, the buyer realises that the flat was only ever worth £100,000 and cant raise a mortgage to buy it, so defaults on the completion - in this case George Wimpey (the developer) comes after exchange bond for their £100,000 and draw down on their bond. George Wimpey is very very happy as they should be, they have sold the flat without actually selling it.

Now ethical Exchange Bond company goes after the buyer who defaulted on the purchase because of course Exchange bond acted in "good faith" and will now set the rotweiler dogs on the buyer to pay up that 10%.

LOL - What a good [problem]! everyone wins, unless of course the buyer cant pay up to exchange bond...

Another way your product is stupid is that you issue a bond, not knowing if someone can raise a mortgage or not, how dumb, I mean if the property is 12 or 24 months away from being completed then a lot can happen in this time, aside from the entire mortgage market changing (which it has) and the fact someone could lose their job and or ruin their credit score this could affect them getting a mortgage.

Why would you take such large risks?

 

 

Unfortunately, I think perhaps you ought to be asking these questions of yourself.

 

I don't mean to sound harsh (and apologies if I do), but I think the only reason you are in this position is greed.

 

Anyway, I hope things are sorted out for you know - good luck