Secured Bank Loan - Best Exit
Discussion
An elderly family member has a commercial and residential property which was used as a rolling security for a bunch of term loans from between the 80s and mid 2000s. 2 of the 3 people named on the loans passed away and a few years ago the bank came and said they had consolidated them into one amount and wanted a repayment plan.
Fast forward to today and there is £240k outstanding on the loan amount, the commercial property is valued at around £220k - £240k
The residential property is valued around 200k which is her home she lives in
The bank recently came along and decided they wanted to call the loan in as the repayment plan was at the banks discretion and reviewed every 3 months,the old manager left and the new one is not very friendly.
They had their legal team engaged and demanded payment in full, I spoke with them and asked them to take the fact that hundreds of thousands of interest had been paid and the fact that the way they have dealt with it has been questionable if they would do a deal.
I offered them £170k for a full and final settlement which they refused
2 options are:
1) Hand them the property and walk away
2) Sell the property with all the money going to them, an offer of £220k was made
The relative is 80, has no income and would be in trouble with a big CGT
Any thoughts on how to approach this?
Fast forward to today and there is £240k outstanding on the loan amount, the commercial property is valued at around £220k - £240k
The residential property is valued around 200k which is her home she lives in
The bank recently came along and decided they wanted to call the loan in as the repayment plan was at the banks discretion and reviewed every 3 months,the old manager left and the new one is not very friendly.
They had their legal team engaged and demanded payment in full, I spoke with them and asked them to take the fact that hundreds of thousands of interest had been paid and the fact that the way they have dealt with it has been questionable if they would do a deal.
I offered them £170k for a full and final settlement which they refused
2 options are:
1) Hand them the property and walk away
2) Sell the property with all the money going to them, an offer of £220k was made
The relative is 80, has no income and would be in trouble with a big CGT
Any thoughts on how to approach this?
Presumably you and the family member are happy with the status quo.
Worth raising this with the Banking Ombudsman. A former business partner faced a similar issue - borrowed to buy a business (£550k), going well but the other guy involved pulled out and my business partner took on the full liability, with the bank's agreement, using another business premises and residential property he had as collateral. About 2 years in and bank inexplicably called in the loan putting at risk his other businesses.
Took it to the Banking Ombudsman who considered the demand to be unfair and the bank backed down.
Worth raising this with the Banking Ombudsman. A former business partner faced a similar issue - borrowed to buy a business (£550k), going well but the other guy involved pulled out and my business partner took on the full liability, with the bank's agreement, using another business premises and residential property he had as collateral. About 2 years in and bank inexplicably called in the loan putting at risk his other businesses.
Took it to the Banking Ombudsman who considered the demand to be unfair and the bank backed down.
When you say 'sell the property' are you referring only to the commercial property or including the relative's home?
Are both within the same building?
I own a commercial property and some land and may be interested in buying, depending on location.
Let's start with England?
North?
South?
Are both within the same building?
I own a commercial property and some land and may be interested in buying, depending on location.
Let's start with England?
North?
South?
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