# Bank looking to put Legal Charge on property



## John7 (23 Oct 2013)

Hi everyone,

First time post hoping for some help/advice.
Purchased land 20 acres with ruins of a property in 2006, with intention of family home and small farm.

Purchase price 200k
Outstanding commercial loan amount 110k Ulsterbank

I have only been able to pay interest only for the last year and a half, the bank has  been refusing to take interest only for last four months and now wants a Legal Charge on the property, which was not mentioned at time of mortgage draw down.I have no contact from my local branch all contact from Belfast Branch.

I have the ruin and land (poor quality bog etc) up for sale for last few months, not getting any offers, not even 40-50k in order to settle outstanding amount

At the time of mortgage application, Ulster Bank specified verbally which valuer to use.

My Question is should I allow Ulster bank legal charge over property, if they sell it at 40k for example I will still have 70k outstanding.

I am very grateful for any help or advice

Thanks J


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## cremeegg (23 Oct 2013)

If the bank dont already have a legal charge over the property you certainly should not "give" it to them

If they go to court they can probably get a court order giving them a charge. This will obviously cost them.

Maybe you can give them a charge if you get something in return. Though it is hard to see what.

On a totally separate point, if this  is in the right part of the country I might be willing to make you an offer.  Maybe you can send me a PM private message


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## John7 (31 Oct 2013)

Thanks Cremeegg for response.

I am reluctant to give Legal Charge on unsecured loan

Is their such thing as Split commercial loans with banks.

Should I approach bank with proposal or employ financial ad adviser to negotiate with Bank.

My fear is that at the moment I am not getting too much pressure/contact from Ulster Bank if I try to negotiate they may commence expedite a judgement against me. 

Also if to negotiate with Bank is there any recommendations for paid financial adviser in Galway/West

Thanks everyone
John


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## 44brendan (31 Oct 2013)

Loan is unsecured at 110K! This is surprising. You are in a strong position to negotiate with the Bank. They can take Legal action against you and put a judgement mortgage on your property (not a Legal Charge). However, you should use your strong negotiating position to agree some settlement which will be to your benefit. i.e. agree to giving them the Legal Charge in return for accepting the sale proceeds in full settlement of the debt.


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## John7 (31 Oct 2013)

Thanks 44Brendan

Would the advice be to negotiate with the Bank myself directly or employ someone on my behalf as Belfast department are dealing with all commercial loans in Ireland and can be difficult to get through/discuss.

Who would be the best to act as intermediary/negotiate get the bank to listen.
I don't think I want to go down the PIA route.

Thanks again
John


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## 44brendan (31 Oct 2013)

Your initial offer would be to offer the property in full settlement of the loan. I am assuming that you have no other real assets other than your PDH. Also that your net income position is reasonably low. Specify the facts and the offer in a registered letter to them (no need for a 3rd party involvement). You might also indicate that your ability to continue paying interest is under pressure and you are considering availing of the insolvency legislation. Leave the ball in their court and infer that other creditors are threatening you. That may in turn put the availability of the property at risk. You are currently in a position of strength. Use it as best you can to get a good deal!!


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## John7 (28 Jan 2014)

Sorry repeated post


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## John7 (28 Jan 2014)

Just an update. 
200,000 Original loan

110,000 outstanding commercial land loan (equitable deposit of the Title Deeds) Ulster Bank

I've been offered 64,000e for the land which I offered to Ulsterbank as final settlement.They have written back stating that they would accept proceeds of sale but still want amount outstanding.

In my earlier post I didn't state that my father had gone guarantor on the original loan (my solicitor had no info on this and I had genuinely forgotten, terms and condition/duration on loan have changed on two occasions without any input from guarantor)

My solicitor has the deeds for the land in his office, but tells me that I cannot sell the property without permission from the bank.

My question would be, is this definitely the case, as I feel if I had land sold and lump sum I would be in a better place to negotiate with bank.

Brendan44 thanks very much for advice before but due to my misinformation an "equitable deposit of the Title Deeds" is probably not the same as unsecured loan for negotiating with the bank.

Sorry for long winded post
Thanks
John


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## Bronte (28 Jan 2014)

John7 said:


> In my earlier post I didn't state that my father had gone guarantor on the original loan


 
That's a heck of a thing to forget !

In relation to the title deeds, technically the solicitor has to give them to you if you want them.  He's under no duty to the bank unless he signed something with them.  They are your deeds based on what you've posted. But it seems he is trying to do the right thing, even if you are trying otherwise.  Your father would be in serious trouble if you sold and didn't repay.


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## cremeegg (28 Jan 2014)

Bronte said:


> That's a heck of a thing to forget !
> 
> In relation to the title deeds, technically the solicitor has to give them to you if you want them.  He's under no duty to the bank unless he signed something with them.  They are your deeds based on what you've posted. But it seems he is trying to do the right thing, even if you are trying otherwise.  Your father would be in serious trouble if you sold and didn't repay.



Why would his father be in serious trouble? 

Obviously his father is on the hook for the €110k now but how would he be in a worse position if the land was sold? 

Surely if the land was sold and UB were part paid the father would then only be guarantor for the reduced amount?


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## Bronte (28 Jan 2014)

Yes he'd owe a lesser amount, but it would be called in, currently that's not the position.  It always had some value.  If the son sold and didn't repay, it would be a right pickle.  

I wonder does the solicitor have some kind of fiduciary relationship to the bank in the absense of any written undertaking.


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