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Sep, 2014

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  1. #11
    Join Date
    Oct 2009
    Posts
    4,985

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    Is it possible to sell one property to reduce debt/equity ratio? Would that get you a new loan?

  2. #12
    Join Date
    May 2007
    Posts
    6,703

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    Argue argue argue and complain, then when you get their dismissal pass it to the ombudsman, I had similar with Barclays (though not the receivers) eventually they allowed the original terms to stand, they were wanting me to give them £30K to make the problem go away. Long story so I wont repeat it.

    I'm assuming your problem has something to do with loan to value and they lent the money based on a % of the properties worth.
    I offer no guarantee that anything I say is correct. wysiwyg

  3. #13
    Join Date
    Mar 2009
    Posts
    8,836

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    Are these residential properties?
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

  4. #14
    Join Date
    Jan 2010
    Location
    West Midlands
    Posts
    415

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    As Artful asked, are these residential properties? If they are I would have expected the values to be not a lot different to those when you took out the loan, if they are commercial however, that is where your problem may lie.

    Commercial property values peaked in June 2007 and took a nosedive by nearly 45% to the bottom of 2009/2010 but have recovered somewhat but still, I believe, sit perhaps 30% lower than their peak. If this is the case here, your original 65% LTV deal may represent an extremely high LTV for the bank, and that is why they want their money back, especially as they have been effectively supporting you for the last 2 yrs over and above the original term.

    Commercial lenders often restrict their lending term to that of any unexpired period left with the commercial leases in place. If your tenant was only on the hook for say 3-5 yrs, a 5 yr repayment term would be the norm with the likes of RBS.

    'All monies Clauses' are used extensively with lenders to effectively cross collateralise the borrowings but most people ignore them as they never think they will apply, but lenders are looking at all reasons to get out of a deal that sits wrongly with them and that can be a help to them in that regard.

    RBS will also have obtained at least a 'desktop' valuation of their security which has prompted them to act now perhaps because they feel that the 2 yrs they have given you haven't benefited anyone.

    You can't force or cajole a lender into doing anything beyond what was originally agreed and your options remain to refinance elsewhere with a lender who will lend the amount you need, against an up to date valuation, being repaid from a defined income stream that they can rely on. If you can't do that, get something sold quickly and reduce the bank's liability.
    CFA

  5. #15

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    Hi sorry haven't been able to get into my account. There is one commercial the rest are residential.

  6. #16

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    Hi David. Had them valued last year & they were all the same including the commercial property. It had a new tenant last October for a 5 year term with regular rent reviews & directors guarantees.
    I appreciate that I had a very good deal but it was the deal they were happy with when I took out the 5 year loan & then over the next 2 years more loans over 15 year terms. I think this has been planned by the bank in order to get rid of the longer term loans. They increased the loan repayments by 3% across the board at the end of the 5 year term so they haven't been supporting me they have been making a fair profit.
    I was assured when I took out the 5 year loan that it would be renewed. I had done my business plan with the bank manager as I had never done one before. It was a 20 year plan the 1st 10 years buying as many properties as I could interest only & then the next 10 years paying them back as quickly as possible as the rents rose. Had I been given even a 1% chance of it not being renewed I would never have moved my properties to them. I was told as long as I pay & don't go bouncing cheques I would have nothing to worry about.
    They haven't actually given me 2 years it is 1 year in this June.
    It cost me around £13,000 to move my properties to them & I was lead to believe it would be for the long haul I was also told I would get free banking but they starting charging me for that after a year. I managed to get this back to free banking but then the bank manager left & after the second year it reverted back to charges again. At that time I was in an 18 month battle with the local council regarding funding for care for my mother in law who had dementia. I discussed the charges with my with my then bank manager & he just said sorry we can't do free banking & the manager who had done it for the second year shouldn't have.
    The succeeding bank managers have said they can see no reason why the original manager wouldn't have said it would have been renewed but the world is a different place now & NatWest don't want this business.
    This is crazy as I have never missed a payment even when they increased the interest rate.
    I am not trying to force or cajole them into anything I was not told when I took the loan out. Just because the bank manager didn't record it doesn't mean it wasn't said. there is no point in seeking finance elsewhere as I work for my husbands business for love not reward so as the receivers have taken away my only other source of income I wouldn't imagine anyone would lend to me. I am very reluctant to sell any of the properties as they were to be my pension. Lets remember I have never missed a payment.

  7. #17
    Join Date
    Jan 2010
    Location
    West Midlands
    Posts
    415

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    Unfortunately unless a previous manager put it in writing (and I can virtually guarantee they wouldn't even if you had asked them) you don't have much leeway and most of the banks have shortened their lending term so they have two alternatives at the end of the 'new' shorter terms - if they like you and your portfolio they charge you another round of fees and re-write the loan on terms that benefit them (it would cost you legal fees to move and they know that) or just walk away if they feel it doesn't fit their future plans.

    Even if they do support you moving forward you are unlikely to get interest only funding and you will be very firmly in their hands and they (collectively) hold a very powerful monopoly.

    I know the properties may represent a form of pension, but if they take them back they will sell, probably by auction, at a discounted price, the bank will be redeemed and you may not have anything left over, indeed if there is a shortfall they will come after you for it!

    By controlling a sale yourself you may be able to downsize the portfolio slightly but move to another lender on terms that could work and possibly for a 20 yr term.

    Always happy to discuss this privately if you want to pm me.
    CFA

  8. #18

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    Thanks David. I wouldn't be in a position to refinance as I work supporting my husbands business so am not paid = no income in my name. I am still trying to get information from them as I believe there may be some evidence to support me in hand written notes, there should also be my 20 year business plan which I did with the bank manager & phone call transcripts. I spent weeks ensuring this was the right deal for me & I believe the bank manager enticed me & told me what he thought I wanted to hear to get my business.
    He left just over a year later because a fortune teller told him to. Hes been involved in a couple of failed businesses since then & the last time I saw him he looked like a tramp & was trying to sell me racking & second hand bikes. I know there must be paperwork to support my case. I have offered to continue paying the interest rate they have increased to & change to a repayment mortgage but they say they just don't want this type of business. I really don't understand why they're doing this to my business, apologies if this offends anyone who is genuinely behind with their payments but why aren't they chasing the people who don't pay? When I have a tenant who pays I leave them alone, I don't even increase the rent.I save my energy for the ones who don't pay. There are 2 properties that shouldn't even be in the portfolio, they were only put in so we could buy a place in cash, the deal fell through 2 days before we were due to complete (we were gazumped) & we couldn't get them back out. I believe they have miss sold me the product & all I can do is fight.

  9. #19
    Join Date
    Jan 2010
    Location
    West Midlands
    Posts
    415

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    Quote Originally Posted by Stevlynd View Post
    There are 2 properties that shouldn't even be in the portfolio, they were only put in so we could buy a place in cash, the deal fell through 2 days before we were due to complete (we were gazumped) & we couldn't get them back out.
    Surely if this is the case and the purchase didn't go through, you still have those funds or did they get gobbled up for something else? If they went on other property, no problem you should have some unencumbered part(s) to your portfolio you can capital raise on, if it went elsewhere, unfortunately you may have helped make your situation a little more challenging.

    If you work in your husband's business I suspect that you are either paid by him or receive a share of the income just so your accountant can make best use of your individual tax allowances, that is still classed as income. If your husband has an income why not look to put the properties in both names, and apply for joint mortgages, I expect you would get more joy that way.

    At the end of the day, anybody who takes out any form of borrowing has to abide by the terms, which I know often get skirted over when times are good and everything is on the up, it is hard therefore to try and argue against anything that wasn't fully documented at the time, and the fate of the former manager really doesn't make that much difference as a lot of them lost their jobs too. The basic tenet always is 'Caveat Emptor' - let the buyer beware!
    CFA

  10. #20

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    Hi david.
    The money was taken back by the bank so the amount on the loan agreement was not the amount borrowed. I did do not get paid from my husbands business as i had my own income from my property portfolio therefore using my own tax allowance. My husband is a retired firefighter with a small additional income from his business. We have kept our business separate deliberately so if one has problems it shouldn't affect the other.
    I am happy to abide by terms but I spent 2 hours going through the agreement asking questions & raising my concerns, as I had got to know the bank manager over a couple of months I believed what I was told when he reassured me at every question that as long as I didn't get I to arrears then I would have nothing to worry about. Would you not have believed a bank manager 6 years ago? That's all I did, I believed him. I know now as everyone in the world does never trust a banker. It was all over the news last week about interest only mortgages & how they were miss sold the people selling them were saying anything to get the business. At the end of the day the bank manager was the representative of the bank so they should be accountable for what their representatives actions.

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