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The Preacherman

BTL tycoon mis-sold loans goes on hunger strike.

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2 hours ago, The Preacherman said:

Time for an orchestra of tiny violins. 

Seems like the bank honoured the contract to the letter and at the end of the loan term asked for it's money back (as it was within its rights to do).  When the borrower couldn't pay (thus breaching the contract) the bank sold the loan on to Cerberus (probably at a discount) who then took action to recover against the security which included a personal guaranty.  Perfectly normal business situation and outcome.

Strange sort of tycoon who can't read a contract?  Even stranger sort of tycoon who signs a personal guaranty and is them upset when it is called in.  Chap was clearly swimming well out of his depth.......

Edited by Exiled Canadian

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CYBG appears to be in a race against time to sell off or wind up its high-risk residential property loans before they go bad.

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5 minutes ago, Unknown user said:

I don't get why he thinks the banks would care if he's on hunger strike?

Because he's self regarding.

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2 hours ago, Ghostly said:

Imagine having to abide by the terms of your loan agreement! Unconscionable!

Yet there he is with staunch look on face and no shame.

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The comments on that article are good. People don't understand what a "margin call" is. It was a business agreement. Nothing regulated by FOS.

Quote

Russ, Unfortunately UK, 1 hour ago

Love the way he calls himself a businessman. He's a rent-seeker and got what he deserved for overextending himself and using his home as capital.

:)

 

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This is a bit of a curious one though, so bank decides it had enough of this business, flogs the loan to another company that throws up the interest rate in order to bankrupt everyone and sell off the assets.  Is that really correct?

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7 hours ago, Will! said:

CYBG appears to be in a race against time to sell off or wind up its high-risk residential property loans before they go bad.

Commercial loans!

He claims bankers mis-sold him £10 million worth of loans, which came with crippling interest rate payments. He says that despite never missing a repayment, he was cut off from credit by the bank and chased for the balance at the end of his loan term.

You cannot be missold a BTL loan. Buying non resi mortgages is vlassed as a commercial loan. In the eyes of the law, ifiot LL and mega bank are condidered peers.

As far as chased gor bslance, jesus, what does the moron expect to hsppen at the end of tge mortgage term? Debt written off? 

 

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7 minutes ago, Beaker said:

This is a bit of a curious one though, so bank decides it had enough of this business, flogs the loan to another company that throws up the interest rate in order to bankrupt everyone and sell off the assets.  Is that really correct?

We won't know whether the other company had that motivation - seeking to bankrupt everyone.

If they did, it's not the bank's fault so he's having his hunger strike outside the wrong building!

 

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5 minutes ago, Beaker said:

This is a bit of a curious one though, so bank decides it had enough of this business, flogs the loan to another company that throws up the interest rate in order to bankrupt everyone and sell off the assets.  Is that really correct?

I'd like to know a few more facts but what I do know is a lot of established banks will not entertain commercial lending on property, banks like metro pulling out after dipping their toe in the water.

I have 2 colleagues who transferred to LTD structure who are going through this now, just can't remortgage and can't undo the incorporation to LTD structure.  The stalemate is forcing the issue.

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9 minutes ago, TopBanana101 said:

I have 2 colleagues who transferred to LTD structure who are going through this now, just can't remortgage and can't undo the incorporation to LTD structure.  The stalemate is forcing the issue.

How unfortunate. I'm sure they had a business plan with contingencies etc - and didn't just arrogantly assume that they would be able to remortgage?

 

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1 minute ago, mrtickle said:

How unfortunate. I'm sure they had a business plan with contingencies etc - and didn't just arrogantly assume that they would be able to remortgage?

 

It gets better, they can't really sell either.  The capital gains tax destroy their position.  They've already extracted that equity to expand their portfolios!  These guys have 50+ properties each, I guess it'll take time to filter through to hit the small players.

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8 minutes ago, TopBanana101 said:

It gets better, they can't really sell either.  The capital gains tax destroy their position.  They've already extracted that equity to expand their portfolios!  These guys have 50+ properties each, I guess it'll take time to filter through to hit the small players.

Interesting. I guess if it’s LTD, worst case they could wind up via voluntary liquidation and walk. But if they’ve signed any kind of personal guarantee along the way, they’re in the same position as tiny violin man above. 

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47 minutes ago, Beaker said:

This is a bit of a curious one though, so bank decides it had enough of this business, flogs the loan to another company that throws up the interest rate in order to bankrupt everyone and sell off the assets.  Is that really correct?

Basically the loan was in default (chaps hadn't repaid when it fell due), I'd expect that in those circumstances the bank would be allowed to takes steps to recover against the security (vis. sell the houses off and if necessary call in the personal guaranty).  The banks other option is to sell the loan off.  This would be at a discount (as it is a non performing loan) but it gives Clydesdale the certainty of knowing what their write off is, cash now and they avoid the hassle of having to liquidate the lenders portfolio and personal wealth.

Cerberus specialise in distressed debt, they will be keen to maximise their recovery on the debt and won't be squeamish about the tactics they use to do this (provided they are within the terms of the loan agreement that will continue to govern the debt).

They're not trying to bankrupt the chap.  They just don't care if making him bankrupt is a result of them maximising their recovery against the loan.  This is how distress debt funds work - chummy is just collateral damage; he's a tycoon apparently so I'm surprised he doesn't understand that this is how the world turns in the commercial debt markets.

Edited by Exiled Canadian

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57 minutes ago, TopBanana101 said:

It gets better, they can't really sell either.  The capital gains tax destroy their position.  They've already extracted that equity to expand their portfolios!  These guys have 50+ properties each, I guess it'll take time to filter through to hit the small players.

Awesome. Please do keep us up to date as the saga unfolds, won't you?

 

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My favourite line in the article.. 

“Ive been stripped of everything I’ve worked for”

150 BTL properties... I think you mean your tenants have worked for? 

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