Roma Finance and unregulated property Finance loan - Held over a barrel

[Foolishly]

Ive been asked to help a family member with an awful mess they are in over trying to settle an unregulated loan that was taken out to buy property (I believe the loan could be deemed as regulated or should be and then its protected)

The lender has a 1st legal mortgage charge on the property.

 

They borrowed 385,000 and with fees the gross loan was 400,000.

The total to redeem should have been in the region of 454,000 (interest rolled up and compounded monthly @ 1%).

 

Upon selling their current property they repaid in the region of 381,000 in March 20 to the loan and made numerous requests for a redemption statement to finalise the money due.

 

Upon finally receiving this statement in May 20 the balance to redeem loan and to remove the charge on the property is £299,000 and furthermore increasing.

 

The statement balance has £110,000 worth of default facility fees (£4600.00 per month charged from the first month in which  the agreement began) plus rolled up interest compounded monthly.

 

It includes £48,000 worth of other charges plus interest (for things such as drive by property - charge £480.00, introducer fees £4,600 that were actually paid direct)

a charge has been applied for £9,200 which is stated as the loan extension fees.

Due to this extension fee the interest rate then increases to 2%.

All these extra charges aside the end balance would be in the region of £137,000 still excessive (major lessons learned).

 

The agreement itself is totally one sided and leaves the borrower with no protection or way out unless payment is made in full and in line with the facility terms of agreement.  I feel this type of bridge lending should not be available to the general consumer (loan sharks come to mind). 

 

They do have a solicitor dealing with the lender, however he isnt willing to pursue this through the court or even look if this lending is illegal as the lender has no credit license, or see if it could be classed as a regulated loan.

 As its not something he generally specialises in, he is all about settling.

 

So his recent negotiations have had no success,

but today the lender has stated they would accept £200,000 in full and final settlement and remove the charge on the property.

If its not accepted however the receivers will take over the property (again all terms in their favour).

 

As this has added enormous pressure to the family as a whole the only solution to end their nightmare is settle,

get the charge removed and then pursue through courts,

for penalty fees unlawfully added monthly etc etc etc.

However their solicitor has told them that wont be possible as the lender will only agree to a full and final settlement. 

 

Would that be it, if they settled, no proceedings can be brought against them? 

 

Can a settlement agreement not be overturned in the event future findings, that were not apparent at the time of settlement?

 

For the lender to be willing to drop £99,000 of the balance, is a cause for concern, what,  if anything could they or are they covering up? 

 

Any advice appreciated.  

 

 

[dx100uk]

it can't be regulated for that sum.

the penalty fees and arrears fees etc etc look to be all unlawful.

 

there is nothing stopping litigation after settlement.

 

but for them to drop £100k to get settlement smells to me there is a lot more to be had if they were pressured.

they should be the one over the barrel not the borrower...

 

pers i'd be ringing the relevant authorities here as this sounds very illegal lending esp if they are not FCA registered, and I bet they are not.

 

https://www.fca.org.uk/consumers/mortgage-advice

 

 

[Foolishly]

No they are not FCA registered 

 

The concern over trying to pursue after settlement is that they will only settle on the basis of full and final agreement, which the solicitor informs them it will be likely drawn up and worded to their advantage with the outcome upon settling no litigation could follow. 

 

Yes the sum involved couldnt be regulated, however couldnt it be deemed or ruled it is in fact an interest only mortgage so in effect has protection under legislation on the basis;

1. The borrower is an individual, not a company, so not commercial borrowing.

2. The redemption statement refers to the account being an interest only mortgage.

3. The borrowers partner resides on the land currently in a caravan, due to the house requiring renovation (although the funds set aside for this may now have to be used to settle).

4. Upon completion of the purchase a legal mortgage was then signed enabling the lender to gain the 1st charge over the property for security on the loan.

 

Another worry (although may be legal and ok) is the loan was taken out with one of their registered companies (6 companies registered at companies house but all trading as under the same name) but the charge at the land registry lists the company name correctly but the company registration stated is for another one their registered companies and not the same name on stated on the legal mortgage or loan facility agreement.

 

Do really feel they are well and truly trapped!! 

 

 

Forgot to add they did use a broker however this company conveniently dissolved in 2019. 

[stu007]

Nothing wrong with Naming them here so we can do some research into them.

[Foolishly]

Their trading name is Roma Finance

 

[stu007]

Roma Finance is a Trading Name of Romaco Limited, Company Number: 07232590
(Is not authorised or regulated by the Financial Conduct Authority (FCA) and as such is only able to write unregulated loans) note according to their website.

 

Romaco Limited
15 Carnarvon Street
Manchester
M3 1HJ

 

Company Number: 07232590

 

Incorporated: 22nd April 2010

 

Company Status: Active

 

Company Type: PLC

 

Previous Names: HALLCO 1753 Limited

 

Directors: Philip Isaac Hodari, Scott James Marshall, Keith John Richardson

 

Companies House link: https://beta.companieshouse.gov.uk/company/07232590

 

Endole link: https://suite.endole.co.uk/insight/company/07232590-romaco-limited

 

BizDb link: https://www.bizdb.co.uk/company/romaco-limited-07232590/

 

ICO Registration Number: ZA023034, https://ico.org.uk/ESDWebPages/Entry/ZA023034

 

FCA Register: https://register.fca.org.uk/ShPo_FirmDetailsPage?id=001b000000dE4VwAAK

 

[Foolishly]

Would it be worth sending a Sar request?

 

If the settlement isnt completed on or  before 30/6/20 Roma's agreement allows them to add another facility fee (my opinion its a penalty charge) £4600.00 to the balance plus another full month interest at 2%, theres no reduction for part of a month, just the full month is applied regardless. 

[dx100uk]

god yes

very important .

there is no harm whatsoever in ringing the fos and asking advice about them and what to do.

 

 

dx

[Foolishly]

Thanks

 

SAR request it is then

And yes will make sure advice is sought from fos. 

[Foolishly]

I was wondering if anyone is aware of the information that is required to add a charge on a property?  (By information im referring to the accuracy of what is provided and then stated on the land registry against the property).

 

Im concerned (although this may have no impact) that the company stated for the 1st charge matches the name on the legal mortgage and agreement, but stated next to the name isnt that companies registration number.

 

They have used one of their many other subsiduary companys registration number.  When searched at companies house the information is not for the one that refers to the agreement.

 

Could that in any way make the 1st charge not enforceable?  If so, would they be required to make a further or new application?

 

A deed of trust was drawn up between the buyer and his partner to hold the property as tenants in common, but I think the negative pledge within the 1st charge overides this. However if the 1st charge was void, then they would be in a better situation to fight on, without the added threat of the receivers and mounting pressure to settle on their terms for £195,000.