Second charge on property for secured loan

[jamcatella]

Hi to you all

I hope this is posted in the right section, forgive me if not.

I will try to keep this brief but you are going to need some detail to hopefully give me some advice.

 

I co-owned a limited company until Oct last year when things got so bad we had to file for voluntary insolvency. This is now complete but we had a large secured loan (second charge over our property) to fund some development work over a period of time. The loan was joint and several between the 2 directors (myself and my former business partner). We secured it against our property to the tune of £32.5k each. At the point of insolvency we still owed around £42k.

 

We have been trying to negotiate with HSBC to reduce the liability but 2 offers have been rejected, 1 for 65% of the debt repaid within 4 months and 1 at 75% of the debt paid within the same time frame. HSBC have now called me and said they would only consider a full settlement and have given us 8 weeks to put the house on the market. The best they have offered up to now is no interest and no charges from the date of the letter of request to repay the debt.

 

My mortgage is £102k and current value is £145-£150k (valued 2-3 weeks ago) so there is equity in ours to fullfill our £32.5k security. My former business partner would have around 45k in equity following a sale, this is an estimate. Both mortgages are not in arrears currently.

 

We (my family) do not have any ready funds available, other than selling my car which would realise about 7k.

 

I am now at a loss as to which direction to take. I have 2 young children (7 and 3 years) who I do not wish to uproot. We have been trying to keep our heads above water for the last 6 months but this may well be the final straw. I would really welcome any comments or thoughts as to what we could do, I am at the end of my tether.

 

Thanks

[jamcatella]

any advice would be most welcome, anyone?

[sleepingdog]

Hi jamcatella ,If I was in your shoes I would sit tight. As you mortgage is being paid at the moment I can not see what HSBC would gain from trying forcing a sale of your property . Firstly the judge may not grant a forced sale and secondly if a forced sale was granted then surley the mortgage company gets first pickings along with other costs in forced sale leaving HSBC with well not much I guess. Sorry I can't be more helpful at this stage but hopefully this will bump your post for more knowledgable persons to read and comment.

sleepingdog

[jamcatella]

Thanks for the reply sleepingdog, this is my gut feeling too. I have phoned the bank today and they have now said that the request to put our house on the market within 8 weeks was simply a `suggestion` and have admitted that the reasoning behind rejecting our offers was that they believe that there is enough equity in the property to ask for the full amount. I asked what they based their assumptions on and she said it was based on what we put down on our means test form as the value of our house. I was astonished that they hadn't taken it from any formal valuation, we could have said anything. We have asked for a copy of the valuation report to be sent to us and at this point she starting getting very sketchy.

 

My thoughts are they are pushing us to put the house on the market as this is the only way to realise the equity in the property. If it went to repossession they wouldn't be able to realise enough to settle the debt. Yes they could chase me but it would mean another court action and more costs for them and more time to see the debt repaid in full.

 

I have decided to hold out for now, knowing we have a final end game anyway so I will call HSBC's bluff. I will let you know how it develops

Edited May 6, 2009 by jamcatella
missed detail

[myboyelvis]

UNILATERAL NOTICE REMOVED

Has anyone had any dealings with Land Registry to remove a unilateral notice on their property. I bought my flat from a developer (who are also my freeholder & managing agents) and they gifted me with a 15% deposit, however it has just come to light that they have applied for a unilateral notice for the 15%, despite no-one (including mortgage company) receiving 15%. Now the Land Registry have advised that I need to prepare a statement to the developers and LR advising why I feel this notice should be removed. The only evidence developers have sent is one piece of handwritten paper with my signature, that they have input my address on it. I did sign a piece of paper when I first approached the developers for a different property and not the one I eventually bought.

Recently, I have started receiving letters from the developers advising that they are adding interest on the 15% and also charging me for sending letters / phone calls.

I am not sure what else I can tell the LR in my defence other than I did not sign a piece of handwritten paper agreeing to any charges / loans to be secured / attached to my property. Apparently anyone can apply to LR to apply a notice against a property. What I don’t understand is that if they did lend me 15% why was this not applied as a secure loan.

[sleepingdog]

Hi myboyelvis , you would be more likely to get a interest on your problem if you run your own post ,also all info regarding that would soley be to advise on your problem.

sleepingdog

[Markiemark1]

When you state it was a secured loan, I presume that you signed a charge as a personal guarantee, i.e it's an all monies charge mortgage over your property?

[jamcatella]

Many thanks for your replies. Apologies for not updating sooner.

 

We have been in contact with HSBC in respect to a valuation report on our property (the basis of them refusing our original settlement offer was that there was enough equity in the porperties involved to cover the full amount outstanding). After many emails and calls they have now admitted that they do not have a valuation report on our property and the last `Market Value Estimate` valuation on their file (which does not include an official report) was for back in Dec 07, well under the market value of todays climate.

 

I feel it is a little moral victory in the war. We now intend to go back to them and submit a reduced offer (reduced from what we have already proposed) and see what they say. The bottom line is, at the point where they supplied us with funding for our business and secured that funding against our properties they did not complete a valuation. I'm not sure this is a legal responsibility but we think that as they did not value the property how could they lend us the money. We feel this falls under the category of irresponsilble lending as they would have (at the point of the agreement) been lending us very close to 100% of the properties value. Their own code of conduct disctates that they will not lend beyond 85% for a secured loan. And how did they know they could lend us the moeny without an official valuation.

 

Will keep you updated...

Thanks again

[youngsspecial]

I hope that you are holding fast on this one. I have recently just gone through the same process with another bank and it was not easy, having gone into liquidation in December with a personal gurantee for a business loan. First of all I had to convince myself that this was not a personal attack against me. The people that work in the Recovery section of a bank are a totally different breed to you and me. Their sole purpose is to recover as much as they can for their bank by whatever means necessary. Once you understand where they are coming from, you will then begin to undestand how to fight them. They will lie, cheat, forget to mention important facts and try to convince you that they will take your house away from you. They will push you to the very limit and each time you speak to them they will be assessing your weaknesses so they can play on them. They have no morals but will bank on the fact that you have morals and play on them.

 

Do not give them any more information that you can and just because the will ask for certain information does not mean that you have to give it to them. All they want to know is - do you have any money or assets anywhere that they can get their hands on and then they will push you to get hold of those assets. In many cases they will base their assesment on information that you have given them ( as you have already found out).

 

Three very important things.

1. Always refer to anything that you offer them as an 'Ex gratia' Payment, no matter what they say.

2. Always say that if they accept your 'ex gratia payment' it has to be 'In full and final settlement', otherwise they will accept your offer and also ask you to sign a document promising to pay them the balance.

3. Do not let the grief that they are giving you cause a rift between yourself and your partner.

 

I offered my bank 50%, then 60% etc. They totally refused each time and it got to the stage where after they refused 79%, I told them that they could take me to court if they wanted. Of course, this is the last thing that they want to do even though they will tell you that they will go ahead anyway and it will affect your credit rating etc.....

 

I finally lost it and wrote them a very stiff letter, threatening to disclose all the bullying tactics to their chairman, go to channel 4 ( I discovered that their chairman was also on the board of trustees of the BBC so I had to quote channel 4) and personally see that the person that I was dealing with would also be summoned as a witness in court. The very next day I got a phone call accepting my offer even though I had been told that the matter was not out of the hands of the person I was dealing with and was in the hands of their legal team........note all the lies they gave me......

 

to end it all I was then told...." I was only doing my job"....

 

So , if you feel so inclined, call their bluff and remenber that they are not like you and me and they have no morals at all....

 

I was later told by a banker friend that in today's climate, a 21% discount was a very good deal.

 

Good Luck

[tigercub]

Jamcatella & youngsspecial - I know it has been some time since the last post on this subject however I am going through exacly the same situation (2nd charge against property held by Bank) Battle has been going on for 3 years now.......

 

I was wondering if there was any update at all on any offers being accepted by the bank or 2nd charges being removed etc?

 

Any help greatly apprciated......