Singing Pig

flatstomachfatwallet:

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.

This is not an easy question to answer, as the sands are constantly shifting. Some creditors just won't play ball, whilst others are ready to deal and get what money they can.

I have picked up the phone and all I have done is ask the creditor, what discount they are willing to offer if we pay the full amount off whithin so many days. I was given 20% off without even a haggle.So even if the deal fits - don't be afraid ask for a discount anyway!!!!!

It is also not unheard of to get 50% off, when evidence is presented.

The thing you have to remember is that their money is invested in property and they feel secure. I suppose the trick is, to show them that maybe it is not as secure as they thought! 

50% off a secured loan, Mr Debt, can you get me one of those please!

Was that the first charge? Second charge? Third charge?

How many times have you actually done this and what bank was it with?

Us Northerners are a sceptical bunch............

JD,

So you get a completly independant survey done in these situations, not via the lender, and use that to "negotiate" with?

Nigel M.

Spanner_in_works:

50% off a secured loan, Mr Debt, can you get me one of those please!

No, this is something you have to do yourself.

You can see from jackberai on this thread, where he has had success. If you ask others they will also tell you different degrees of success. How about other posting their successes here?

Personally I deal with unsecured loans, however I do have dealings with many people in the BMV industry. Often the triumphs and failures of getting a discount on secured's are discussed.  What is very apparent is that the BMVers that make an effort to present hard evidence often get some form of discount. So if you don't ask you certainly won't get.

The other thing is this, if you start doing this on a regular basis, you will get to know which lenders settle roughly at what price. This way some of the more experinced BMVers that I know, have a more educated idea of what discounts they may achieve.

In the world of unsecured's, for me if a client has debts with Halifax or BoS for example, I know it will be a longer journey for the client, as these two are very reluctant to settle at a discount. 

Sometime ago I spoke with Richard who was dealing with a property that had a large secured loan attached. We spoke about the ways of getting the secured loan reduced. All the answers are here in this topic.

I had a call from Richard on Thursday, and he gave me an update on what was happening. Richard had presented the 2nd charge holders with evidence showing the dire situation the vendor was in. Richard then made an offer of 25p in the pound, this was rejected by the 2nd charge, as they wanted 50p in the pound. Richard rejected this!

 A short time later, Richard was able to present more evidence to show how dire the situation was - also now eviction was only hours away. Richard made an offer of 30p in the pound, 2nd charge said 40p. Deal accepted.

OK this is the simple version, in reality is was lots of hard work (including his solicitor being absent at a crucial moment), and see who blinks first!!! Next time, because of the experience learnt it should be easier and less nerve racking.

So it can be done.
 

Agreed, like anything the time/return ratio improves as your experience improves. Once you know the lenders who accept short sales this will guide the cases you decide to take on. Once again don't accept every deal to be a winner, however if out of every 10 you get one 10k cash back deal, it is well worth it.

Whe you speak to lenders speak with authority and find out the exact process. Locating the decision make is key.

 Jon

I am just about to approach a lender with the view to reducing a secured loan based on a low end valuation (as mentioned by JD). My thinking is that if I approach them as a property professional who is looking to purchase the vendors house, the loan company will realise I will be looking to make a profit from the deal and may consider this to be at their expense and therefore will look into the situation/valuation in more detail.

Do you think it would be best to approach the loan company just as a general debt advisor?  

Tony

Here's how I got on with a deal after some very helpful advice from JD.

vendor approaches me with 6 days til eviction, aaargh!

1st charge is evicting, owed 105k(or so i thought)

2nd charge owed 40k(or so i thought)

OMV £170k

Offered 135k.

I spoke to first charge to get a 2 week delay so i can get agreement from 2nd charge to reduce their amount due. I then find out that the debt is 115k, not 105k.1st charge want missives concluded before they will suspend eviction, but i cannot do this until 2nd charge agree.

I organise 2 surveys, one at omv, the other at 140k( so that I can show the 2nd charge that they will not get all their money back)

Vendor misses appointment for the low survey, but is in for the omv one, and no surveyors can come out quickly enough to do the low survey.

I approach 2nd charge without any survey, but lay the case out to them, and they say they want 25k of the (real)44k debt. I up my offer to 140k. 1st charge agrees to delay eviction.Great, at least i'm getting somewhere.

Except the 2nd charge will chase the vendor for the balance,meaning that the vendor either has to get repo'd and hope that he gets more than 140k, minimising his debt, or sell to me and have a definite debt of 19k. This gives me the added worries of the vendor going bankrupt and the sale being overturned possibly.

I felt I had to give him the options, even though we have a gentlemans agreement.

I now have to wait for him to make up his mind, but I don't hold out much hope, he hasn't even sent back the legal pack from the solicitor I arranged.

Some folk just don't have a clue how to help themselves, it is depressing.