Singing Pig

PdV:

Hi Ruth,

You might be interested to hear that the redemption penalties can often be negotiated down on the basis that it is an illegal charge.

I haven't done it myself, but I can put you in touch with someone who knows how to do it.

Regards,
Paul.

 

hi paul ... sent you a PM about this. cheers.

Hi JD (again) and the rest of you

Have to say I am enjoying this thread immensely as i have had so many marginal cases like this and rejected a few others.  Can't help thinking that if I had great knowledge and skill in this area i could have converted a few marginal deals into excellent ones...

So many times its the 2nd charge that kills the deal as it is not sufficiently BMV.

Its a key topic for BMV, I feel, so if anyone has anything to contribute, please share it so that we can all benefit from the 'accumulated group wisdom'!

Its late now so best be off to bed before my wife makes me sleep on the sofa...

Arlo 

Get the vendor to sign a letter of authorisation (click on link for sample) -  this can then be faxed to the creditor and placed on their system. Then you don't have to be with the vendor every time you need to talk to the creditor.

When you talk to the vendor do a full fact find on them - and get any documentation you can as evidence of their negative situation:

Court documents; Letters from creditors; even medical evidence. Send this to the 2nd charge, now they will have a clearer picture of the vendors situation.

In some cases eviction is looming fast so time is critcal, however filling out an N244 (click on link) with the above evidence plus your evidence of intention to purchase, will (should) get you more time! A delay in eviction, shows your determination, and more evidence to pass to the 2nd charge. Last month I helped stop three evictions, because a solution was presented to the courts (they like solutions).

Every so often I see a post that says redemption figures can easily be negotiated down because the are an illegal charge. I am not so sure about this, as I have asked a number of people in the know, and they are under the impression that they are legal. So once again negotiate as you would the 2nd charge.

Finally, and this I find a little odd; I talk to a number of purchasers who walk away from the deal, if they are not able to help the vendor by getting the deal done for them. OK you have done your best for the vendor - but the property is still availible to purchase! Don't walk away - just approach the situation from another angle.

Get the vendor to sign a letter of authorisation

*************

yep, done that. it went off on monday, so the 2nd charge company should just about have received it and be ready to speak.

my primary question still stands though, based on your own experience JD, what level of write down is a secured lender going to consider under the circumstances i described earlier - i.e. no equity beyond secured loans.

I do know of a friend who managed to reduce 20% of a secured loan. It took him about three months to negotiate with the lenders.

Each lender is differnt though  - I understand Kensington won't accomodate any negotations.

Hi Alan,

Lenders arn't stupid! The offer price is not really that important. If they thought/know the property is worth 210k and your offer price would not be enough to clear the secured charges (2nd charge), they would reject the offer and tell the vendor/you as much.

You can use the hardship approach with lenders, however more times than not they are only interested in the econmics of the deal.

For instance I recently had the following case.

1st charge 55k

2nd charge 33k

3rd charge 9k

Total £97,000.

The property was worth 100-110k. My offer price was £82,000. I had an 'independent' survey done to show a value of £82,000. Upshot was 3rd charge accepted 1k of 9k, 2nd charge accepted 28k of 33k. And 1st charge agreed to waiver early redpemption charge which was due to come of shortly.

In this example I showed the 2nd and 3rd charge lenders that if the property was repossessed they would come out with less money in the end. I made a business case, based on realistic projected figures ie how money 1st charge lender would be owed after 6 months etc.

You are absultely wasting your time if you think lenders are easily fooled and will accept what you say via a phone call. As Johnny says, they lay the rules down, the trick is knowing how to massuage the figures. Certainly mileage in this strategy in my opinion, especially as I now have a 'friendly' surveyor on board

Jon

jackberai:

You are absultely wasting your time if you think lenders are easily fooled and will accept what you say via a phone call. As Johnny says, they lay the rules down, the trick is knowing how to massuage the figures. Certainly mileage in this strategy in my opinion, especially as I now have a 'friendly' surveyor on board

The surveyor is a must have! Go out and find a couple of friendly surveyors who cover the areas you operate in. Talk to them and tell them exactly what you do and more importantly what you need. If you think there is a deal to be had then the surveyour may be just what you need. You want a "red book" valuation.

When I talk to my surveyor, I tell him what I want, and 9 times out of 10 I get what I want. However every so often he does say "Johnny your taking the P****"!

Sure they do cost a bit upfront, but if they make the deal fit, then they are worth it!

You now have a very valuable piece of evidence to present to 2nd charge +