Lloyds Banking Group Unfairly Double Billing Borrowers In Arrears

***URGENT NEWS FOR BORROWERS WITH LLOYDS BANKING GROUP***

 

GDP Partnership brought this matter to the attention of Borrowers at the beginning of July 2014 and to date we have been able to assist many of our existing and new clients.

It has been publicly announced that Lloyds Banking Group has been unfairly double billing customers who fell behind on their mortgages, and in a scathing verdict, Master Ellison said the bank's behaviour had been "unconscionable".

The findings will have implications for thousands of Lloyds Banking Group mortgage holders across NI and the UK. If the bank's practice had gone unchallenged, many borrowers would have lost their homes.

The Lloyd's Banking Group include Bank of Scotland, Birmingham Midshires, Cheltenham & Gloucester, Halifax and TMB.

Basically the Group capitalised arrears but the banks continued to treat such mortgages as in arrears and used that as the basis for bringing legal cases.

This perception of borrower affordability was distorted. This resulted in already struggling borrowers being threatened with repossession on account of an "erroneous and fictional arrears balance".

As a result "many" court decisions concerning suspended repossession orders had been made on "erroneous assumptions". Due to the smoke and mirrors presented by the bank through their legal advisors, many injustices have already passed through the courts and this is very concerning.

Master Ellison said that as a result of this he was imposing a series of strict conditions on the bank if it tried to enforce any existing suspended repossession orders. He said that if the bank failed to meet these conditions, it "may face an uphill struggle".

GDP Partnership has welcomed the decision and the stance being taken by Master Ellison. Publication of the findings may be too late for some, but welcome news for many.

Repossession should always be a last resort and it is more beneficial for all parties to come to an amicable agreement in respect of mortgage debt.

The GDP Partnership USP promotes education around these financial issues in order to empower borrowers to make their own decisions. It is important they are aware of ALL the options available when it comes to dealing with debt.

Since its inception we have helped 1000's of people deal with their debts and move on with their lives.

For more info or to see if we can help you...get in touch with our Equity Experts at info@gdpni.com.

DARWIN ALLEN AABRP
SENIOR RELATIONSHIP MANAGER

ALL NOT WELL IN EUROZONE

Paper doesn’t refuse ink so those with the requisite skills are able to take a story and make it sound positive or negative based on their own particular needs. Some would call it spin, others may describe it as blatantly or deliberately misleading to further their own aims but numbers or statistics are far more difficult to manipulate.

Depending on what and where you read your news, there is quite clearly a battle being waged between pessimism and optimism about whether or not Europe is stuck in a quagmire or marching back to growth and knocking every obstacle out of its way. Both sides have strong and lucid arguments but strangely whilst one is pessimistic and the other optimistic, they both agree on what needs to be done and where the focus for a recovery is required, be that continued recovery or the start of one – finance and lending.

Optimism in Ireland these days is never in short supply. Property prices are increasing nicely; positively streaking ahead in Dublin, the government is borrowing at lower and lower rates and Fitch have most recently upgraded Irish Debt. All appears well and whilst we are no longer careering towards ‘junk status, the backdrop in Europe is far from rosy. Being complacent caused many of the problems that we have been facing and being complacent and not cognizant of what is happening in the wider global economies may see us caught unaware once more. While the rest of the world recovers from the Great Recession of 2008-2009, Europe is stagnating.

The numbers don’t lie. This week’s figures for the euro-zone economy were far from healthy, however you try to decipher them.  An already feeble and faltering recovery has stumbled. Output across the euro area was flat in the second quarter, following a poor start to the year when the single-currency club managed to grow by just 0.2%. Yes, there were some more positive results, the Dutch and Portuguese economies, which had contracted in the first quarter, rebounded, growing by 0.5% and 0.6% respectively. Spanish growth picked up from 0.4% in the first quarter to 0.6% in the second. But these performances were overshadowed by the poor figures recorded in the three biggest economies. Italy, the third largest, had already reported a decline of 0.2%, pushing it into a triple-dip recession. France, the second biggest, continued to stagnate. But the real blow came from Germany, the powerhouse of the euro zone, where output slipped by 0.2%.

Should this be cause for concern? Of course, the new GDP numbers are yet more evidence that the euro-zone economy is in a bad way. Consistently low inflation has prompted fears that Europe will soon slide into deflation. Prices are already falling in Spain and three other euro-zone countries. Deflation is a real possibility and would be particularly grave for the euro area because both private and public debt is unrealistically high in many of the countries that share the single currency. Even if inflation is positive but stays low it hurts debtors, as their incomes rise more slowly than they expected when they borrowed. Not dealing with the debt burdens that we built personally, as businesses and as a nation will continue to come back to haunt us.

Access to capital remains an issue for all and lies at the centre of a continued recovery, both in Ireland and in Europe as a whole. Many of us remain concerned that Europe has not moved as fast as the U.S. when it comes to the cleansing of balance sheets of financial institutions. We want banks to bring their balance sheets in order but also lend more money; the contradiction is difficult to ignore.  There is a worldwide backdrop of banks deleveraging but we expect them to write new business. It simply cannot and will not happen.

Banks dominate the provision of credit in the euro area unlike the U.S., where companies raise much of their funding on the bond markets, concerns remain that not enough is being done to improve lending In Europe. The stress tests are belatedly getting the job done, but they still remain a powerful brake on lending until they are properly completed. There will be no safe recovery until this is addressed.

So whether your glass is half full or half empty based on what you see in Ireland, a lot of what happens in the future will be heavily influenced by what is happening in the rest of Europe. The numbers do not lie, it’s not as good as it may first seem.

Nick leeson

IMPORTANT NEWS FOR ALL BORROWERS

***URGENT NEWS FOR BORROWERS***

 

Fixed Charge Receivers may be liable for rates in respect of properties they are appointed on.

HAVE YOUR PROPERTIES BEEN PLACED IN A RECEIVERSHIP BY THE BANKS???

Please note that although the Fixed Charge Receiver is appointed by the bank, they act as an agent of the borrower. It has been confirmed by the Land & Property Services, that despite prior widespread belief by all professionals in the insolvency/recovery industry, Fixed Charge Receivers can be liable for the rates in respect of properties they are appointed.

The key point to confirm liability is depending on whether the property is occupied and who is receiving (or entitled to receive) the rent. In brief if the property is:

* Unoccupied - the ratepayer remains liable for the rates.

* Occupied - (with rent being paid or entitled to be paid) the Fixed Charge Receiver is determined to be the 'owner' and thus liable for the rates.

NB: If the property is not tenanted but a Fixed Charge Receiver is appointed, the ratepayer remains liable for the rates.

If you have been affected you can contact our team for professional help .We can advise you on your course of action. Please also note that if any recovery action has begun on the accounts, all recovery proceedings can be suspended while we await information to determine who has the liability of the rates.

GDP Partnership welcome the recent stance taken by the Land & Property Services. Due to a lack of affordability on property debt it has been unfortunate that there has been an increase in defaults and the appointment of Receivers.

It has been widely recognised by all professionals that it is unfair and unreasonable that Receivers collect/collected the rent from a property and the borrower is/was then expected to pay the rates. Many borrowers relied on the revenue from the property to pay the rates.

Whilst this will be welcome news for some, for many it has unfortunately came too late. There has been countless Bankruptcy Petitions against borrowers for rates debt by the Crown Solicitor Office on behalf of the Land & Property Services.

In light of this, some unanswered questions now remain. They may explain why this new policy and position has not been publicly announced but been implemented by the Land & Property Services since July 2014.

The main question is how many injustices have passed through the courts? Are there cases where debtors, who were declared bankrupt, were actually not liable for the rates of which they were being asked?

Equally as important will the Fixed Charge Receivers repay the rates to the Land & Property Services for the historic property debts to which they are personally liable?

Let's also remember they will have forwarded these funds to the charge holder who appointed them, usually a bank. Will they return the funds to the Receiver?

Whilst we watch these points with interest, in the last 24 hours our team of experts has already saved our existing clients thousands of pounds in respect of rates they thought they owed.

If you have any queries about your property rates, especially when a Receiver had/has been appointed, please do not hesitate to contact GDP Partnership.

DARWIN ALLEN AABRP
SENIOR RELATIONSHIP MANAGER

BLOOD ON THE STREETS - DOSE OF REALITY REQUIRED IN IRELAND

In December 2010, the CEO of Blackstone told an audience that they were ‘waiting to see how beaten up people’s psyches get and where they are willing to sell assets’ and that ‘you want to wait until there’s really blood in the streets’. He was talking about Ireland and you the Irish people. Blackstone have already amassed a €2bn portfolio of Irish assets and last week appointed receivers on the single largest borrower in that portfolio, Michael Flynn, so quite clearly that time has come

Many saw the American funds as white knights riding in to save the day. Unfortunately, this was extremely naïve, an artery has been severed and the blood is pumping. They’re not called vulture funds without reason. A Vulture spends time circling their prey, waiting until they’re near death and then swoops on an easy target, tearing every part of flesh, muscle and sinew until nothing remains leaving a rotting carcass in their wake. Vulture Funds are no different. They’ve existed for decades and are a necessary evil and an important part in any economy’s recovery from recession, depression, austerity and over lending. But they are aggressive, efficient and profit orientated

Whilst they buy loans at huge discounts, their first target is to receive back the par value of the loans, making huge profits. Ask yourself the question, were you lending the money, would you target a different outcome? The honest answer is no. It is a very simple spreadsheet exercise, the vulture fund will look to recoup all of their money as quickly as possible, lock in their anticipated profit and then deal with the rest of the portfolio. If the remainder of the portfolio doesn’t look great, they’ll either pass it to an asset manager to recoup the money through a repayment schedule much like a bank or having already made their money, sell it on to another debt purchaser.

Many of you will have seen the movie Wall Street. The prevailing mantra of the movie was ‘Greed is good’. Let’s rephrase that, Greed is the norm. Steve Schwarzman, the CEO of Blackstone earns $211m a year, the best part of $4m a week. He earns this huge sum of money, not by being nice but by repeatedly and consistently delivering on his targets. If it was me in Upstate New York, cold, impassioned and trying to justify a huge salary, I’d have no problem putting anyone’s lights out.

Michael Flynn and others before him will take to the courts to try to ascertain details over how their loans were sold. Unfortunately it is largely irrelevant. Most of these funds when looking to arrive at the price to bid on the loan book will do one of two things. They will either value the twenty best performing assets in the loan book or fifty of the worst performing assets. If you are in the former, you’re in trouble. You are already ear marked as the easiest way for the fund to recoup their initial outlay. This is just common sense. In the absence of you not being able to buy-out your loan, the likelihood is that they will engineer default, break up your businesses and sell to the highest bidder, normally your closest competitor. Is it nice? No. Is it ethical? Borderline. Is it good business? Definitely.

Did NAMA sell Michael Flynn and others down the river? Absolutely! They understand the process and know that many of these loans that are currently being sold will be sold time and time again until they eventually change hands for decimal points of their original par value.

So what can the borrower do? Quite simply, you have to gain back control as quickly as possible. The only way to do this is to re-acquire your loans from these funds as efficiently and quickly as you can. There is a window of opportunity - absolutely. Many loans will have moved to a fund under the same terms that were agreed at the previous lender. This won’t last forever. Very soon, your new lender will be looking for principal and interest repayments on your loan, which of course they are entitled to do but clearly wasn’t possible before and no more is it now. Failure to do so will place you in the uncooperative, non performing pigeon hole that Michael Flynn finds himself and any chance that you had will be lost.

There are investors and funds who specialise in this type of process. They understand the valuation process that the funds have gone through and are equally aware of the buy-out price that the fund is looking for. If you find yourself in the situation that your loans have been acquired by one of these ‘white knights’, you need to act soon. Michael Flynn and others thought everything was going well, it wasn’t.

Mr Schwarzman spoke initially about the psyche of the Irish people, that’s no longer relevant. Borrowers need to wake up and smell the coffee, they need to understand the process. It doesn’t matter if it’s Cerebus, Lone Star, Carval or Blackstone ; they are all fairly similar.

Nick Leeson