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Hi I am Chris, and I am in a real pickle. I am hoping someone may be able to offer some advice?
I have a commercial property that has been repossessed. It is worth around £125,000 and I borrowed £65K to buy it 18 months ago. But after a year of delays in the project, our bridging loan term ended and in the 3 months that followed the lender repossessed the property, slapped £25K of fees and additional interest on, in addition to the agreed £10K interest for the first year. I am now faced with owing them £100,000. Worse the receivers are struggling to sell the property, even at the bargain price of £80K, which would leave them £20K short which I would then have to pay... then worse the amount I owe is going up by £3,500 each month it is not sold. This was my our first experience with a property investment, and suffice to say I am not in a good place.
I am hoping there is a way to halt/pause the ridiculous fees and interest while the property is sold.
I'll explain more for those who want to know the ins and outs.
I have a normal job where I work a 9-5 and get paid a salary, and until December 2019 my wife did the same. We were just a boring normal husband and wife who were enjoying life with our 18 month year old son. Then just before Christmas 2019 our son was diagnosed with Leukemia. The months that followed are a bit of a blur, but my wife had to give up work, and lived at Addenbrookes on the ward with our son for a few months. We adjusted to living on one salary relatively well, though we knew we did miss our more prosperous life.
It seemed clear my wife would not be returning to work for a few years at least, and we also intended to have another child, and my stupid brain came up with a solution to replace my wife's income. I formed a ltd company, bought a commercial property that had planning to change it into 3 flats, and took out a bridging loan to pay for 60% of the purchase price and the entire £100K build. At the end we intended to refinance to pay back the £100K to the lender, and keep the properties, with the income from them becoming my wife's salary.
Sadly things did not move very fast. The architects took over 6 months, the structural engineers took a couple of months, and the remainder of the 1 year term was taken up with the party wall agreement. Along the way I paid all the bills that came with it, and along with a garage build I did at the same time we did get into a little debt, but nothing we couldn't handle at the time. We advised the lender that we were not going to be finished within the year, and an extension to the term was applied for.
Things carried on as normal and we believed we were just weeks away from the completion of the party wall agreements when the lender, ROMA, sent us an e-mail informing us our extension to the bridging loan had been denied. They slapped a load of charges on us that appear to have all been in the small print of the contract, and applied a higher interest rate backdated a couple of months to the 1 year point. They initially advised we could try to sell the property, but then 2 weeks later changed their minds and appointed the receivers. The property was repossessed, and the receivers explained they would sell it. The property was worth £125,000 and they expected it to sell for around £110,000 leaving a little left over from the £100K owed. At this point we decided this could merely go down as a bad experience and a loss that was our own fault, but we accepted there was nothing we could do about it.
I sought legal advise, but was told there was nothing much I could do until the property was sold.
So it was over a month before the fist attempt to auction the property, which was unsuccessful. Then a second auction took place more than a month later again on the 3rd August. But again the property did not sell despite a guide price of just £75,000.
I have attempted to take out another bridging loan to buy it back, and give me time to sell it, but because their settlement figure is now so high no lender is interested due to the unfavourable loan to value.
The interest is still racking up, and they are attempting to market the property at £80K using the London auction house who did not sell it on that last occasion. I am beside myself with worry as the interest and fees are stacking up and there is no sign of them being able to sell. Worst case it is possible we could lose our home, and the receivers told me I may have to file for Bankruptsy.
So if anyone can help, is there anything I can do in this situation? Is it legal for them to charge so much, and can I pause the interest to give the property a chance to sell?
I have a commercial property that has been repossessed. It is worth around £125,000 and I borrowed £65K to buy it 18 months ago. But after a year of delays in the project, our bridging loan term ended and in the 3 months that followed the lender repossessed the property, slapped £25K of fees and additional interest on, in addition to the agreed £10K interest for the first year. I am now faced with owing them £100,000. Worse the receivers are struggling to sell the property, even at the bargain price of £80K, which would leave them £20K short which I would then have to pay... then worse the amount I owe is going up by £3,500 each month it is not sold. This was my our first experience with a property investment, and suffice to say I am not in a good place.
I am hoping there is a way to halt/pause the ridiculous fees and interest while the property is sold.
I'll explain more for those who want to know the ins and outs.
I have a normal job where I work a 9-5 and get paid a salary, and until December 2019 my wife did the same. We were just a boring normal husband and wife who were enjoying life with our 18 month year old son. Then just before Christmas 2019 our son was diagnosed with Leukemia. The months that followed are a bit of a blur, but my wife had to give up work, and lived at Addenbrookes on the ward with our son for a few months. We adjusted to living on one salary relatively well, though we knew we did miss our more prosperous life.
It seemed clear my wife would not be returning to work for a few years at least, and we also intended to have another child, and my stupid brain came up with a solution to replace my wife's income. I formed a ltd company, bought a commercial property that had planning to change it into 3 flats, and took out a bridging loan to pay for 60% of the purchase price and the entire £100K build. At the end we intended to refinance to pay back the £100K to the lender, and keep the properties, with the income from them becoming my wife's salary.
Sadly things did not move very fast. The architects took over 6 months, the structural engineers took a couple of months, and the remainder of the 1 year term was taken up with the party wall agreement. Along the way I paid all the bills that came with it, and along with a garage build I did at the same time we did get into a little debt, but nothing we couldn't handle at the time. We advised the lender that we were not going to be finished within the year, and an extension to the term was applied for.
Things carried on as normal and we believed we were just weeks away from the completion of the party wall agreements when the lender, ROMA, sent us an e-mail informing us our extension to the bridging loan had been denied. They slapped a load of charges on us that appear to have all been in the small print of the contract, and applied a higher interest rate backdated a couple of months to the 1 year point. They initially advised we could try to sell the property, but then 2 weeks later changed their minds and appointed the receivers. The property was repossessed, and the receivers explained they would sell it. The property was worth £125,000 and they expected it to sell for around £110,000 leaving a little left over from the £100K owed. At this point we decided this could merely go down as a bad experience and a loss that was our own fault, but we accepted there was nothing we could do about it.
I sought legal advise, but was told there was nothing much I could do until the property was sold.
So it was over a month before the fist attempt to auction the property, which was unsuccessful. Then a second auction took place more than a month later again on the 3rd August. But again the property did not sell despite a guide price of just £75,000.
I have attempted to take out another bridging loan to buy it back, and give me time to sell it, but because their settlement figure is now so high no lender is interested due to the unfavourable loan to value.
The interest is still racking up, and they are attempting to market the property at £80K using the London auction house who did not sell it on that last occasion. I am beside myself with worry as the interest and fees are stacking up and there is no sign of them being able to sell. Worst case it is possible we could lose our home, and the receivers told me I may have to file for Bankruptsy.
So if anyone can help, is there anything I can do in this situation? Is it legal for them to charge so much, and can I pause the interest to give the property a chance to sell?
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