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bridging loan with no consumer credit licence
Background
Ms. D is a 57 year old single mother. She has 2 children aged 25 & 18. She works as a nurse. The children’s father is currently unemployed, since the separation he has paid negligible amounts of child support and has no assets. Her salary is approximately £25k PA, this is topped up by agency work, worth in the region £8k - £10k PA and potential BTL income of £12k PA (gross). Prior to taking a bridging loan with 'The Bridging Lender' she owned 3 properties:
Property 1
Zoopla valuation: £298 642
1ST Charge: Residential Mortgage - £150 000
2nd Charge - 'The Bridging Lender'
Restriction – 'The School'
Property 2
Under offer at £490 000
1st charge – BTL Mortgage £165 000
2nd charge - 'The Bridging Lender'
Restriction 'The School'.
Property 3
Zoopla val: £181 456
Repossesed by 'The Bridging Lender' March 2013
Sold @ £172k
Outstanding mortgage was £46 875 to 'The Mortgage Lender'
Redemption paid to 'The School' on sale of £25 394
After costs - £48 018 – was used to pay down Ms. D’s indebtedness to 'The Bridging Lender'
TIMELINE
2007: Ms. D – wanted to send her son to a public school and applied for a bursary, she had failed to disclose two properties that she had owned at that time.
2008: The school discovered she had failed to make this disclosure and demanded reimbursement of the bursary – approx £78k
The school obtained a judgement in default and registered charges over all three properties.
School offered Full & Final settlement at £60k – Ms. D failed to accept
2009: Ms. D – appealed the judgement – it was thrown out as late.
09/11/2009, the college obtained a power of sale which had been suspended until 11th of January 2010 for Ms. D to pay £84,750.
12/2009: Due to her poor credit history, and quite possibly the her lack of income to support further borrowing, Ms. D was unable to source finance through traditional means. A friend. 'Mr. M.' introduced her to ‘'The Broker'’ at a commercial lending brokerage. 'The Broker' denies any involvement in brokering the loan other than to introduce Ms. D to a contact of his who arranged bridging loans. There is no paper trail from ‘'The Broker'’ but Ms. D has emails sent to him, nothing from him though. On 02/12/2009 she forwarded her credit file to ‘The Broker’ via email.
12/2009 – 01/2010: Ms. D was actively trying to sell Property 2, but was unable to complete the sale by 11/01/2010 due to adverse weather conditions. During this time, 'The School' added another £26k of costs to the judgement. At this point 'The School'’s representatives were in possession of the keys to Property 2. This property had c. £140k equity at the time.
12/2009: Was contacted by 'The Lender's representative' who said that he could arrange bridging finance. There was no application form. Ms. D’s believes credit file was forwarded by ‘'The Broker'’ to 'The Lender's representative'.
In a witness statement dated 02/12/2012 – Ms. D states that the broker offered to arrange the bridging loan for 3 months on the premise that he would refinance her other properties to clear the bridging loan. She states that he failed to do so.
05/01/2010: Relationship with 'Solicitor 1' begins. Ms. D claims that this solicitor was recommended by 'The Lender's representative' & 'The Broker' to facilitate setting up the loan
Ms. D never meets 'The Lender's representative' face to face. She was told to collect loan agreement from 'The Lender's solicitor' and take it to 'Solicitor 1' to witness deed and have ILA signed off.
03/2010: 'Solicitor 1' negotiate undertaking to stand down on charge from 'The School' on Property 2 only
03/2010: Bridging loan completes. Ms. D claims original agreement was for 3 months and interest to be rolled up.
Broker fails to secure refinancing of properties to clear bridging loan. Ms. D fails to sell property. Is advised by her associates, that the loan is unenforceable so she does not need to worry about making repayments on it.
'The Bridging Lender' fails to take any recovery action for an estimated 12-18 months.Ms. D suggests this is to allow interest to build.
02/2012: 'The Bridging Lender' commences litigation against Ms. D
22/03/2013: – Property 3 possessed
17/04/2013: – Permission to appeal denied
30/09/2013: – Interim Charging order granted against Property 2
28/02/2014: – Final charging order against Property 2 issued and permission to appeal denied
28/01/2015: – Letter from 'The Lender's solicitor' threatening action to force the sale of Property 1, with additional costs
30/09/2013: – Interim Charging order granted against 'Property 2'
28/02/2014: – Final charging order against 'Property 2' issued and permission to appeal denied
22/07/2014: Sale of Property 3 completes – sold at £172000, disbursements in Ms D's favour: 1st charge Mortgage Lender - £46875, Further payment to 'The School' - £25 394, £48018 – to The Bridging Lender - £47208 to costs.
20/11/2014: Most recent statement from The Lender's solicitors balance stands at £262 979.74, with a daily interest rate of £124.93
28/01/2015: – Email from The Lender's solicitors threatening action to force the sale of property 2, with additional costs of at least £7000.
Ms. D is a 57 year old single mother. She has 2 children aged 25 & 18. She works as a nurse. The children’s father is currently unemployed, since the separation he has paid negligible amounts of child support and has no assets. Her salary is approximately £25k PA, this is topped up by agency work, worth in the region £8k - £10k PA and potential BTL income of £12k PA (gross). Prior to taking a bridging loan with 'The Bridging Lender' she owned 3 properties:
Property 1
Zoopla valuation: £298 642
1ST Charge: Residential Mortgage - £150 000
2nd Charge - 'The Bridging Lender'
Restriction – 'The School'
Property 2
Under offer at £490 000
1st charge – BTL Mortgage £165 000
2nd charge - 'The Bridging Lender'
Restriction 'The School'.
Property 3
Zoopla val: £181 456
Repossesed by 'The Bridging Lender' March 2013
Sold @ £172k
Outstanding mortgage was £46 875 to 'The Mortgage Lender'
Redemption paid to 'The School' on sale of £25 394
After costs - £48 018 – was used to pay down Ms. D’s indebtedness to 'The Bridging Lender'
TIMELINE
2007: Ms. D – wanted to send her son to a public school and applied for a bursary, she had failed to disclose two properties that she had owned at that time.
2008: The school discovered she had failed to make this disclosure and demanded reimbursement of the bursary – approx £78k
The school obtained a judgement in default and registered charges over all three properties.
School offered Full & Final settlement at £60k – Ms. D failed to accept
2009: Ms. D – appealed the judgement – it was thrown out as late.
09/11/2009, the college obtained a power of sale which had been suspended until 11th of January 2010 for Ms. D to pay £84,750.
12/2009: Due to her poor credit history, and quite possibly the her lack of income to support further borrowing, Ms. D was unable to source finance through traditional means. A friend. 'Mr. M.' introduced her to ‘'The Broker'’ at a commercial lending brokerage. 'The Broker' denies any involvement in brokering the loan other than to introduce Ms. D to a contact of his who arranged bridging loans. There is no paper trail from ‘'The Broker'’ but Ms. D has emails sent to him, nothing from him though. On 02/12/2009 she forwarded her credit file to ‘The Broker’ via email.
12/2009 – 01/2010: Ms. D was actively trying to sell Property 2, but was unable to complete the sale by 11/01/2010 due to adverse weather conditions. During this time, 'The School' added another £26k of costs to the judgement. At this point 'The School'’s representatives were in possession of the keys to Property 2. This property had c. £140k equity at the time.
12/2009: Was contacted by 'The Lender's representative' who said that he could arrange bridging finance. There was no application form. Ms. D’s believes credit file was forwarded by ‘'The Broker'’ to 'The Lender's representative'.
In a witness statement dated 02/12/2012 – Ms. D states that the broker offered to arrange the bridging loan for 3 months on the premise that he would refinance her other properties to clear the bridging loan. She states that he failed to do so.
05/01/2010: Relationship with 'Solicitor 1' begins. Ms. D claims that this solicitor was recommended by 'The Lender's representative' & 'The Broker' to facilitate setting up the loan
- 'Solicitor 1' also gave ILA – which included signing off a declaration of exemption relating to businesses. 'Solicitor 1' was undeniably, fully aware that this statement was untrue as they were responsible for paying judgement to 'The School' with the funds from the loan.
- A large amount of 'Solictor 1's' correspondence with 'The School' appears to centre on negotiating that 'The School' would stand down on their charge to allow 'The Bridging Lender' to hold the 2nd charge on all of Ms. D’s properties.
- 'Solicitor 1' states (in response to a formal complaint from Ms. D) that Ms. D's instruction to them was to deal with the litigation matter with 'the school' not the loan with 'The Bridging Lender'
Ms. D never meets 'The Lender's representative' face to face. She was told to collect loan agreement from 'The Lender's solicitor' and take it to 'Solicitor 1' to witness deed and have ILA signed off.
03/2010: 'Solicitor 1' negotiate undertaking to stand down on charge from 'The School' on Property 2 only
03/2010: Bridging loan completes. Ms. D claims original agreement was for 3 months and interest to be rolled up.
Broker fails to secure refinancing of properties to clear bridging loan. Ms. D fails to sell property. Is advised by her associates, that the loan is unenforceable so she does not need to worry about making repayments on it.
'The Bridging Lender' fails to take any recovery action for an estimated 12-18 months.Ms. D suggests this is to allow interest to build.
02/2012: 'The Bridging Lender' commences litigation against Ms. D
22/03/2013: – Property 3 possessed
17/04/2013: – Permission to appeal denied
30/09/2013: – Interim Charging order granted against Property 2
28/02/2014: – Final charging order against Property 2 issued and permission to appeal denied
28/01/2015: – Letter from 'The Lender's solicitor' threatening action to force the sale of Property 1, with additional costs
30/09/2013: – Interim Charging order granted against 'Property 2'
28/02/2014: – Final charging order against 'Property 2' issued and permission to appeal denied
22/07/2014: Sale of Property 3 completes – sold at £172000, disbursements in Ms D's favour: 1st charge Mortgage Lender - £46875, Further payment to 'The School' - £25 394, £48018 – to The Bridging Lender - £47208 to costs.
20/11/2014: Most recent statement from The Lender's solicitors balance stands at £262 979.74, with a daily interest rate of £124.93
28/01/2015: – Email from The Lender's solicitors threatening action to force the sale of property 2, with additional costs of at least £7000.
0
Comments
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Mrs D needs to take legal advice.0
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she has done every thing she can spent all her money on lawyers and barristers can anyone help pl?0
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I lost you about line 20! No idea who owns what or what the question was.0
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This is very confusing, what is the question here?
HBS x"I believe in ordinary acts of bravery, in the courage that drives one person to stand up for another."
"It's easy to know what you're against, quite another to know what you're for."
#Bremainer0 -
You haven't actually asked a question. Just gave some spiel about how "your friend" tried to con a school and got found out."Facism arrives as your friend. It will restore your honour, make you feel proud, protect your house, give you a job, clean up the neighbourhood, remind you of how great you once were, clear out the venal and the corrupt, remove anything you feel is unlike you... [it] doesn't walk in saying, "our programme means militias, mass imprisonments, transportations, war and persecution."0
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I'm trying to get my head around this so somebody can help you.
Ms D owned 3 properties worth a total of £970,098. Property 1 was her main residence and the other 2 were BTL. The mortgages on these properties totalled £496,456. So she had equity of £473,642
Ms D did not make a full declaration when she applied for a bursary to privately educate her children. The school found out and demanded their money back. The school made Ms D a settlement offer which she refused. Instead she decided to go to court where she lost and so faced an even bigger bill with no means of paying it.
She tried selling one of the properties but was unable to do so. She took out a bridging loan to pay off the school.
Eventually she sold the 3rd BTL property but it didn't generate enough money to pay off the mortgage and bridging loan.
She now needs to sell the 2nd BTL property to pay off her remaining debts. If she doesn't sell then she will be forced to do so, incurring more costs.
Have I got it right so far?0 -
I'm not sure what the question is either, but it does sound like a sad story.
Realistically, it sounds like Ms D was out of her depth in the business she was trying to run. Sadly, there are no consumer protection laws for businesses to fall back on.
On one hand the public school sounds a bit vicious - but I suppose, on the other hand, it sounds like she obtained £78k by deception. Had the school reported her to the police, the outcome could have been much worse.0 -
Pure guess work here. Our you trying to say it's all the Brokers fault and can she get out of this mess.
She needs proper legal advice. But I'm guessing far to late for that. Instead of wasting money on legal fees she should have paid up when originally caught out. The sale of one house would have more than covered that and she could have replaced the BTL afterwards.0 -
This friend has obviously consulted legal advisors about this matter, the alleged mistreatment of her by the broker and the solicitor. (which is very complex)
Why are you posting on here? I'm guessing because she doesn't like the legal advice that she has received? Well nothing that anyone posts on here is going to change that.
I don't subscribe to the theory that it is a sad tale either. What i think is really sad is that someone in genuine need of that bursary was unable to attend that school because your friend obtained it by deception.£1000 Emergency fund No90 £1000/1000
LBM 28/1/15 total debt - [STRIKE]£23,410[/STRIKE] 24/3/16 total debt - £7,298
!0 -
Just be glad its your "friend" and not you.
And dont ever lend her any money is my advise!0
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