Problems with Investor not paying the 20% owed!

propertyguy7

Johnandabby wrote: »

I'm assuming that's a typo and it would be per annum against the £34k loan? So £4.20 per day.

Otherwise the investor has either made a massive mistake, or never intended to pay the final amount or be found!

What calculation did you use for this? This figure sounds more likely. Otherwise, there no way he will be able to pay up!!

Pthree

propertyguy7 wrote: »

Just worked it out! You are right 4.5% per day on £34,000 = £1530 per day. Going to cost him a fortune if he drags it out! Just read my MIL's solcitors reply letter and he has been notified that "the loan attracts interest at the rate of 4% above Barclays Bank base rate after the 29 Feb 2013"

If it takes him 4 weeks to sort this out its going to cost him £47430! Really????? is this really possible????

I hope this is your mistake and not the solicitors?? Could cause delays otherwise.

propertyguy7

My bad "28th Feb" got carried away in all the excitement!

Johnandabby

propertyguy7 wrote: »

What calculation did you use for this? This figure sounds more likely. Otherwise, there no way he will be able to pay up!!

Base rate plus 4% = 4.5%
0.045 x £34,000 = £1,530 per annum
£1,530/365 = £4.19 per day (I rounded up to £4.20 for ease before)

This is the way interest on commercial debts is calculated

propertyguy7

Johnandabby wrote: »

Base rate plus 4% = 4.5%
0.045 x £34,000 = £1,530 per annum
£1,530/365 = £4.19 per day (I rounded up to £4.20 for ease before)

This is the way interest on commercial debts is calculated

Ok, now this sound plausible, however it doesnt make me think that he will be frightened into paying up quick! He could drag it out for years!

pjread

Well, if they're paying 4.5% on effectively a 90+ (100+?) LTV then they're probably better off with that than any other finance available...

is the agreement for the interest actually to be paid, or just accrued into this mythical debt they may have no intention of paying? Is there any other comeback in the agreement beyond interest accrual (i.e. is this, in the written agreement, fairly clearly an anticipated situation?)

Can I assume they are/were also a BTL buyer as you say 'investor'? if so I'd be amazed if they could get any finance at the LTV's they're likely to be looking at if I'm honest...

JQ.

theartfullodger wrote: »

Check to see what other charges are registered on property..

This.

If she has the first charge then there should be something worth going for. However, if the first charge is to a bank there may be nothing left.

There are specialist dept collection firms out the who are often far more effective than local solicitors are recovering money owed. And I don't mean firms that employ a couple of heavies from the local biker gang - reputable specialist dept recovery agents who do this kind of thing every day. It might be something worth investigating when you consider how much is at stake.

Good luck and please keep this thread updated - I suspect your mum won't be the only one to suffer at the hands of these sharks.