BREAKING NEWS FOR MORTGAGE HOLDERS

Attention!!!! Mortgage holders with the Lloyds group -  including Bank of Scotland, Birmingham Midshires, TMB, Halifax and GE Money.

 

Breaking News! Breaking News! Breaking News! We have been advised that there is an issue with Mortgages in arrears with the above mentioned companies.

We understand from our legal sources in the High Court of Justice in Belfast that a number of cases are currently under review by the High Court as to a degree of overcharging and/or Malpractice pertaining to the above mentioned companies. This has prevented the companies from enforcement action against borrowers in default and you should contact GDP immediately if you have or are in difficulty with any of the above lenders.

There may be a solution to resolve of your issue with these lenders so please contact us as soon as to determine if our TEAM AT GDP EQUITY EXPERTS can help in the resolution of your problem.

 

EQUITY EXPERTS

IS HISTORY REPEATING ITSELF WITH DEBT. . .?

There has been a lot of discussion about a recovery of late and some economic indicators would suggest this is the case, such as an increase in employment and forecasts from the IMF which predict the highest growth amongst the big G7 economies. However, a closer look at the fundamentals of this recovery causes concern.

 

In 2013 the UK economy grew by 1.7%. When broken down by expenditure household expenditure accounted for 1.5% of this growth. This means that people are spending more to get the economy going again. Some but not all of this expenditure can be accounted for by the PPI claims paid out by the Banks. However a worrying sign is that people are spending more but wages have not increased and have actually fallen by 0.5% when adjusted for inflation. People are therefore spending money they do not have which means that debt is financing the recovery. Debt in moderation is good; however the debt to household income in the UK is currently 140% and rising. In 2008 this figure was 170%, which suggests that history could repeat it’s self. This debt is mainly driven by increases in house prices in London and Dublin. Increases in house prices only make people feel richer and encourage consumer confidence without actually increasing their spending power.

 

All is not well with SME’s in the UK and Ireland, the IMF recently released data showing that the number of non performing loans in small companies has been rising since 2009 and now stands at £800 billion across Europe. Ireland is one of the main culprits of this debt. The Central Bank of Ireland announced a total of 41% of loans to SME’s are in arrears. While these firms continue to struggle to pay down their debts they will not invest in their businesses and employ more personnel and growth, they will more than likely stagnate and eventually run out of steam. This is evidenced by the statistics which show that manufacturing actually had a negative impact of -6% on the UK economy. In a true recovery this would be more like +6%.

 

With the impending increase interest rates, this may rise to 5% within the next decade, making debt more expensive to service. What is the solution to this debt crisis? The central Bank of Ireland and England will not introduce radical measures such as those in Iceland where the government implemented a policy of debt write offs. Therefore it is up to both the SME and individual to tackle their debt problem now before they run out of steam. Debt can be restructured by the Banks on a case by case basis but it is up to the borrower to instigate these negotiations and be pro active. Specialised help is available to assist in negotiations however the first step is to take ownership of the problem and not to simply hope it will sort itself out. Once the debt is restructured growth will follow as you will focus on the future and not on paying down historical debt.

 

LOUIS WATTERS ACA
SENIOR RELATIONSHIP MANAGER

 

*** PRESS RELEASE ***

 GDP Partnership Sponsors Fermanagh Business Awards…Innovate or Evaporate

Last Friday the 2014 Fermanagh Herald Business Awards were launched with leading members of the business community present. Amongst them was our very own Fermanagh man and Senior Relationship Manager, Darwin Allen.

GDP Partnership will be sponsoring this year’s Young Entrepreneur of the Year Award, an award which will go to one of the most entrepreneurial minds in the area, and be in recognition of the progress the winner has achieved in their young career to date. 

The practice has built a reputation in the last few years, for providing innovative solutions for clients through our areas of expertise such as bank mediation, restructuring, asset management, corporate finance and real estate advice.

Conor Devine of GDP Partnership confirmed, “GDP are always looking to the future and trying to spot future trends and problems.  We tend to look at things slightly differently to our peers and the approach to date appears to be very successful with our client base.  We are a young innovative team of professionals and we are delighted to be sponsoring this year’s Young Entrepreneur of the year award at this ceremony.”

Darwin added “this is a great opportunity to recognise the young talent of the Fermanagh area. Many of the country’s most creative entrepreneurs and industries come from the district so it’s especially pleasing to get the opportunity to recognise some our young talented entrepreneurs.  At GDP we encourage all of our staff to be creative, innovative and inquisitive and that’s exactly the type of skills and characteristics we will be looking for in this year’s short list of applicants.”

The Award is for businessmen or women in the Fermanagh area who have demonstrated a visionary business leadership role. Applicants will be assessed on their business background, success and vision. 

Pictured at the launch of the 2014 Fermanagh Herald Business Awards are (back row L-R): Tom McBride, South West College, Sean Darcy, First Trust Bank, Lauri McCusker, Fermanagh Trust, Gerard Gildernew, Cavanagh Kelly Chartered Accountants, Redmond McFadden, Danske Bank, Darwin Allen, GDP Partnership.

(Front row L-R): Agnieszka Szczepanek, 02 Enniskillen, Declan Devlin, 02 Enniskillen, Maurice Kennedy, Fermanagh Herald editor, Cllr Bert Johnson, Chair of Fermanagh District Council, Mary Gormley, Invest Northern Ireland and Cllr Rosemary Barton, Vice Chair of Fermanagh Lakeland Tourism.

Also in attendance (not pictured) Arlene Foster, MLA & Minister of Enterprise, Trade and Investment, Michelle Gildernew MP.

£50m BOOST FOR PROPERTY MARKET

 

*** PRESS RELEASE ***

GDP Partnership launches Commercial Property Fund      

NORTHERN Ireland’s property market received a serious boost today with the launch of a £50 million fund by leading finance and real estate specialists GDP Partnership.

The funds, which are available immediately, address the continuing difficulty that businesses in the sector are having finding funding for viable projects. The funds can be used for commercial property ventures across Northern Ireland.

GDP Partnership has built a reputation in the last few years, for providing innovative solutions for clients through their practice specialities of bank mediation, restructuring, asset management, corporate finance and real estate advice.  GDP sourced and launched the fund in direct response to the very sobering fact that there is currently little to no finance available in the local market place.

Conor Devine, Principal at GDP Partnership said, “This is a very important announcement for the local economy as a whole.  After six years of a recession and a standstill in terms of the property market, it’s a fantastic boost for the local economy that our team are now launching this new lending platform.

“Confidence is returning slowly but surely to the Northern Ireland economy in the last few months, and while the property sector experienced one of the sharpest downturns, it is now finally starting to move forward again. As our banks continue to deleverage and clean up their own businesses, they have more or less cut off the funding supply to the local market for property based proposals. 

“This £50 million fund should go some way to boosting the commercial property sector. We look forward to working with individuals and organisations who have a requirement for finance for viable deals.”

James Gibbons, GDP Partnership said, “At GDP we specialise in solving problems and have been working tirelessly since 2011 to identify new finance platforms.

“This is a significant opportunity to property owners, developers and their advisers and we want them to know that GDP Partnership is here to help in a tangible manner that will see them get their plans off the ground sooner rather than later.”

The fund is supported by UK based investors who now see Northern Ireland as a place where they should invest their money.  That alone is a massive statement in terms of bringing confidence to the local market.

LLOYDS BANKING GROUP SEE CUSTOMERS AS FAIR GAME

The Northern Ireland Courts and Tribunals Service have recently released figures for actions in relation to mortgage repossessions for the first quarter of 2014. For the first time in this quarter since 2010 there has been a change for the better. There has been a decline of 14.09% in actions brought before the Courts and an increase of 2.14% in the number of cases being disposed of. This means that more and more cases are being dealt with through other means, we can only assume, through mediation between the bank and borrower.

In NI the Courts have taken a dim view on lenders, and/or their solicitors, simply progressing cases to the Court for repossession and not adhering to the Pre Action Protocol outlined by the Courts. The Protocol outlines a series of recommendations for borrowers and lenders to proactively engage as they both have a responsibility to avoid court proceedings at all costs.

In the Pre Action Protocol there are a number of forbearance options available that a lender must consider for the distressed borrower. I am of the opinion that any proposal put forward by a borrower in distress is equitable, fair and reasonable then there is no reason why any lender should not consider agreeing to same.  I say this because from experience GDP Partnership has kept local families in their homes by coming to equitable agreements with lenders.

The FCA regulates the main lending institutions in the UK have issued guidelines called the "Mortgages Conduct of Business" more commonly known as MCOB. MCOB Section 13 refers to guidelines on what lenders must and/or should do when it comes to dealing with customers in arrears and in financial difficulty. It states what a lender must treat customers fairly when in arrears. This is not something the FCA thinks they should do, want them to think about doing, but something they must do.

I want to highlight Section MCOB 13.3.2A  "A firm must, when dealing with any customer in payment difficulties liaise, if the customer makes arrangements for this, with a third party source of advice regarding the payment shortfall or sale shortfall”.

It saddens me to report that one lender in particular, who are probably considered the main market provider in the UK, recently changed their internal policies to act against their regulators MCOB regulations. They have put their policy to our office in writing and communicate it to their customers so we feel it is appropriate to name and shame the Lloyds Banking Group. Lloyds Banking Group include, Bank of Scotland, Birmingham Midshires, Cheltenham and Gloucester, Halifax, Lloyds Bank, and The Mortgage Bank commonly known as TMB.

Borrowers do not borrow money in order to go into default or arrears, when a borrower finds themselves in this position it is a whole new arena for them and it causes many anxiety and stresses on them. It is incumbent on the borrower to ensure that they get the correct professional help and advice in order to help them through this difficult time and naturally they will obtain advice and services from 3rd parties paid for or free.

Mr Tony Boorman, Chief Executive of the Financial Ombudsman has recently reported of the record number of complaints being forwarded to the Financial Ombudsman, most of which he said could have been avoided. The increase has been attributable to distressed property borrowers many of whom are facing repossession.

GDP Partnership has been working for the last 4 years in order to level the playing field between the sophisticated bank and the unsophisticated borrower.  Due to their lack of understanding and knowledge of the financial product which they have undertaken, the Bank is exerting an unfair relationship on the borrower and exposing them to a totalitarian regime...the likes of which could only be found in North Korea.

 

Darwin Allen

CHAOS IN PROPERTY MARKET SET TO CONTINUE

So what's really going on in the Irish property market.  Well one thing is for sure - the estate agents are busy again and making money.  All of the commercial firms across the island are recruiting, getting busier and selling property again.  The property market stopped almost immediately after the fall of Lehman Brothers in 2008 and the subsequent GFC, and for a period of six years very little activity occurred.  However in the last 18 months, we have started to see movement again as the banks continue to offload assets and more recently pool loans together into baskets and sell them off, like Project Stone, Project Eagle and Project Button.  It sounds very military and it sort of is, as the banks have continued to deleverage and get the property assets of their books.  In the three projects mentioned alone there are over £2bn worth of loans sold - incredible stuff really and all in the last 6 months.

So I would concur that the property market is fairly chaotic at present with lots of private equity houses circling Irish skies like hawks seeking prey, and the borrowers who owned a lot of the property, running out of ideas and money in terms of how to keep their business, properties afloat. 

The important point to note here is the change in ownership of our buildings in this country.  In 2007 if you walked around Belfast City Centre, I would have been able to tell you who owned what as all of the real estate was locally owned by local property people/investors.  However the same cannot be said today as many of these high quality buildings have been bought over by property funds and institutions. This is a significant development and a sign of the times really.  As many borrowers have been hit by the property crash, the bank moves in and sells the building end of story.  It is likely that the ownership of our main commercial buildings will remain in foreign hands for a few years yet, until banks get their balance sheets in a form of order and start lending again.  When this happens tthe foreign investors will sell the properties back to the Irish investor.  I don't see this happening for quite a few years and it maybe a generation to we see local people in control of some of our finest buildings.

As we all know NAMA exited the Northern Ireland market in April, deciding enough was enough and selling the entire portfolio to Cerberus - an American real estate company.  For me this is a very positive development for all of us as with NAMA, nothing was happening nor likely to happen that would have had a positive effect on the economy.  The Cerberus deal will kick the market on again, as these guys will be looking to exit Northern Ireland in a maximum 5 years.  That's only 60 months and with a portfolio consisting of more than £1bn of property, there is plenty of work ahead, which will have a positive effect on the Northern Ireland economy including the much maligned construction industry.

So its all go on the property front, and the good news is that GDP are well positioned to continue to bring solutions to our clients in this space.  The future certainly looks interesting and unpredictable to a certain extent, but opportunities aplenty.

Conor Devine MRICS 

Bad advice ? . . . .

 

In the current economic climate as a professional helping others with their debt problems you meet a lot of different people. Some of these people are talking to you about their debts for the first time, others have had some unpleasant experiences but whatever stage they find themselves at they all share a common connection. These people have acknowledged that they are in uncontrollable debt and they need to do something about it.

My colleague Nick Leeson wrote a book in 2013, where he discusses the five emotions distressed borrowers typically feel.  He talks about Denial, Anger, Bargaining, Depression and Acceptance. Depending how you feel about your debt right now, will best describe the stage you are at but please don’t panic, once you ride the emotional roller-coaster and reach acceptance, there are options available.

Once you accept that you need help, the most important thing is that you get the right information from the right people. There are a number of free and paid for services available for distressed borrowers. Either way, I would recommend a professional organization that is regulated by the Financial Conduct Authority and who has substantial experience in this work. They should be able to give you actual examples, on a “no-name” basis, of borrowers that they have helped.

 

It has become more regular unfortunately in this field, that there are a growing number of  faceless organizations claiming to be experts distressed debt, however do not even provide the bare minimum of information through their literature of who their professional team is and more importantly their range of experience and professional qualifications.

We recently met an individual in Belfast who was told to “hand the keys back and we will get the bank to write off the balance of the monies owed”. This sounds great and very simple, but it does not happen unfortunately.  It appeared that this particular company were taking a flyer at this case, had little to no understanding of the policy of the bank in question, and bottom line, giving out the wrong advice.  This is extremely dangerous and can have a very negative impact on their client and their family for years to come. 

This is only one example, I have spoken to many distressed borrowers in the last 18 months who have been given similar peculiar advice from otherwise perceived reliable sources of information. We at GDP are of the view that if anyone finds themselves in a difficult position regarding debt, it is incumbent upon the advisor to explain the situation In full, the process in full and ALL the options open to that party, not just some of the options.

Marcus Tullius Cicero was one of the great Roman philosophers who stated that “Nobody can give you wiser advice than yourself.” This is true, as all the decisions we take, we take ourselves as they affect ourselves. As a result, the more knowledge you have on the subject of debt, the more empowerment you have to give yourself the best advice and make the best decisions for you and your family. Accordingly, whilst you make your own decisions, the source of your information is key.  The way to stay ahead of the game is to always and only ever make informed decisions when you have all if the information available.

I once sat in an accountancy class at Queens when the lecturer sparked a discussion on how his friend, also an accountant by trade, had spent all day frustratingly changing the oil in his car. The lecturer went on to say how this was such a waste of time. Some protesting students failed to understand his message, his friend was not a mechanic, this was not something he done on a daily basis. A mechanic would have knew what to do and had the job done in a fraction of the time whilst the friend could have focused on spending his time on doing what he does best.

The point is when you are in debt you should seek professional help to ensure you know all the options to make the right decision. Whatever you do yourself, you should focus your energy on being the best you can be and let your professionals do what they do best for you. Too often I have heard people say “the business was going well until I started becoming anxious about repaying the debt, my health suffered, I got depressed and…here is the banks solicitor letter for full repayment”.

Let me leave you with a simple plan to remove the anxiety and stress of debt from your life. Seek professional help to know all your options, make a decision, prepare a plan, implement the plan and stick to the plan. If your proposal is realistic and solution reasonable… welcome to a stress free life.

 

Darwin Allen - Senior Relationship Manager