Re: Lenders are abusing exemption clauses to make loan agreements fit into unregulat
Thanks Meelis
I have posted multiple threads on many forums relating to this issue asking many different questions about the agreement and the situation with the lenders. i will have a look at the exemtion issue but in the meantime i will try explain the whole situation in a short version.
First lender was to provide the funds to get to wind and watertight stage and second lender would take over to fund to completion. first lender offered 6 month term only and wouldnt fund any longer term or the full build cost.
Second lender would not fund from ground but would fund from wind and watertight stage to completion
Both lenders were provided a full breakdown of costs should either fund the whole build, very little in it, the second lender terms were lower and would offset the initial setup.legal fees etc of using two lenders
Anyway, it wasnt to be....
Financial Adviser at a Ltd company cant get a single lender to fund so he suggest two lenders.
The costs of the two lenders were obviously going to be a higher cost but willing to look at them
First lender provides terms as expected and FA requests App fee £1000 for first lender, this wasnt paid as no terms from second lender was provided by FA, we told him we need this before we pay for anything (BOTH need to be in place before starting the process)
Second lender terms arrive and everything looks in order so the App fee for the First lender is paid.
First lender was to provide two stage funding, first stage to get groundworks done and second stage to build timber frame t wind and watertight.
First lender carries out valuation report which was the last thing required before funds released, this report was satisfactory and the first stage was released.
First lender requires further conditions to be met which was outside the contractual terms and was to be a substantial cost, if it was allowed than the reduction on the second stage would prevent getting to wind and watertight stage due to lack of funds (ultimately we would default on repayment as the second lender would not come in unless we were at that stage) we would not be able to repay the first lender what was borrowed).
just to step back a bit. The broker took the application fee over the phone but it was processed by the lender that provided the contract (well tats what we thought). The lender that provided the contract was a trading name (info from OFT) of the limited company that took the security over property) Within the grant of security it stated that it was being taken under the terms of the contract provided by what was thought to be the lender (the company that provided the contract).
still wth me?
We contacted the FA to let him know there was issues with the first lender and it will delay the requirement of the funding from the Second lender.
To our shock, the FA did not work there anymore and another FA told us that there is NO second lender in place and they hold no info about the need for a second lender. It is clear now but not at the time why!
The FA had left his company and found himself a nice new job with the broker that sourced the loan from the lender, this happened BEFORE the first stage release of funds from the lender! we knew nothing.
Anyway, a new application ( i will call it that for now) was submitted to the second lender by the new FA on our behalf, we asked for an increase in the original amount:tinysmile_hmm_t2: we thougt was in place to cover the cost of what the first lender wanted to reduce by as we were going to try borrow from elsewhere just to get to wind & watertight then use the second lender to pay off the first lender and the other money we borrowed. It seemed to drag on for a bit then it was refused. little did we know at the time, Mr First lender had his own team at the Second lender as he was a Broker and intermediary. he even confirmed it himself at a meeting that he had his own team there. Starting to see the big icture?
To put you in the picture, the Broker, the company that produced the contract (lender?) and the limited company now saying they are the lender (pursuer) and have their name on the security, are all owned by the same person we dealt with through the whole process!
Anyway, whoever it was (the lender) never produced the second stage funds
if we step back again.
a few weeks after releasing the first stage of funds, the lender?, sold off the security to someone outside the UK for the Full amount of loan he was to provide us, even though he only provided 1/3 of the contractual amount and was refusing to release the second stage, the other 2/3 while sitting on a nice profit from selling on the loan. he was doing well in my book and clearly didnt want us to know he had sold it on, not even his solicitor mentioned anything even though she dealt with the sale for the lender? and acted for the guy outside the UK.
Anyway, the term of the contract with the first lender expired and he had to go back and buy the security back (as i said, we knew nothing about this at the time) so that he could do the calling up notice to get back his 1/3 he did provide and his fees, oh these fees were ALL the fees he wanted for providing the whole amount even though he provided 1/3. this added up to almost double what he provided in his first stage release, again not a bad return for him!
Going back to the FA, it was to be that he doctored the information he provided us regarding the Second lender, I dont want to mention what i know but in my eyes its fraud and it can be confirmed by the SAR received from the Second lender SAR in my view are great things and tell a story themselves, in fact they tell many stories including one that the lender wont like either.
Now this is where things get really confusing.
It is now clear that not only does this guy have a limited company with two trading names, The Broker Company and the company that produced the contract as the lender, He also has a Partnerhip company, completely separate from the limited company and the trading name companies BUT it is exactly the same name as the company that provided the contract!
It has also been made clear ( by the lenders? solicitor) that he company that provided the contract was the Partnership company, a separate entity from the Limited company with the two trading names. it has also been made clear by the solicitor that it was the obligation of the Partnership company to notify the borrower that a Legal Assignment (sale) of the security from the Limited company to the other guy outside the UK. it is not possible for them to be obligated not notify of an assignment if they are NOT the lender.
it has also been provided by their solicitor that the Limited Company was acting as, wait for it, An Agent of the Limited company and the guy outside the UK was the lender providing the funds.
Although the solicitor acted for both the limited company (who took security) and the guy outside the UK who bought it they say they only facilitated the transaction on instructions from the lender? (Limited Company) Are you seriously confused yet?
Now, if we look at Consumer Licences
The Limited company and the two trading names hold a licence as a Mortgage Broker but they lend money.
The Partnership company who said in the contract they are willing to lend £xxxxxxxx have a licence as a Broker and consumer Credit, but they are not the lender (pursuer)
The solicitor says it was the company who produced the contract that were obligated to notify the borrower of a Legal Assignment between the limited company and the guy outside the UK, even though they state that they were a seperate company and nothing to do with the Limited company or the two trading named companies. You cant be a Partnership and that Partnership be a trading name of a Limited company, both are separate entities. The Partnership company owners all submit their own SA800 as self employed and pay tax as a self employed person. the limited company pay corporation tax and include income of the trading named companies.
just to add a little spice, A manager of the company that the original Financial Adviser worked stated on record that the guy we dealt with to source the funds did work for them but he was NOT authorised to provide Financial Advice even though the FA provided a signed copy of the T&C`s clearly stating what we pay for. then again. maybe i am as thick as the brown stuff and thats not what it means, you decide.
What do we charge?
There will be a fee payable by you to xxxxxxxxxxxxxxxxxxxxxxxxxx for Development Finance advice. This will be £xxxx and will be invoiced to you by us once the lender has produced a terms of offer and is payable once the formal offer has been received by you.
Our role
We act as Development Finance advisers.
Just one little thing came to mind. While the NEW application was submitted to the Second lender and we were awaiting a decision. The solicitor acting for the lender (whoever they are were or will be in the end) stated in a phone call (partially conducted via speakerphone) to our solicitor while we were all sitting there, told our solicitor that the New Application to the second lender was rejected, even though we were still awaiting a decision from the new Financial Adviser. How on earth did that solicitor have that information?
Jumping onto something i always wondered about until recently.
At the 11th hour on the day of the first release of the first stage funds from the first lender, the Broker requested an application to be filled in and returned to them immediately. The funny thing is that the prefilled application was for the full amount of money required to do the whole construction of the properties to completion. Why would that be if they were only providing, all in, 1/3 of the overall cost of the build. the other funny thing is, the Limited company had only been setup for months and their assests and liabilities (accounts) submitted to companies house were for the full amount of loan required to complete the properties, it may just be a coincidence.
i did read somewhere on this forum that brokers apply for a loan in your name for more that the borrower wants, provides the borrower with what they require, wait for them to default and go through the motions to repossess while sitting on a nice nest egg, sell after repossession, pass it on for 6 months and sell it back to the original person who will then market it for the full value. Maybe i am looking into things too much, then again.....:tinysmile_aha_t:
the Short version
Originally posted by meellis
View Post
I have posted multiple threads on many forums relating to this issue asking many different questions about the agreement and the situation with the lenders. i will have a look at the exemtion issue but in the meantime i will try explain the whole situation in a short version.
First lender was to provide the funds to get to wind and watertight stage and second lender would take over to fund to completion. first lender offered 6 month term only and wouldnt fund any longer term or the full build cost.
Second lender would not fund from ground but would fund from wind and watertight stage to completion
Both lenders were provided a full breakdown of costs should either fund the whole build, very little in it, the second lender terms were lower and would offset the initial setup.legal fees etc of using two lenders
Anyway, it wasnt to be....
Financial Adviser at a Ltd company cant get a single lender to fund so he suggest two lenders.
The costs of the two lenders were obviously going to be a higher cost but willing to look at them
First lender provides terms as expected and FA requests App fee £1000 for first lender, this wasnt paid as no terms from second lender was provided by FA, we told him we need this before we pay for anything (BOTH need to be in place before starting the process)
Second lender terms arrive and everything looks in order so the App fee for the First lender is paid.
First lender was to provide two stage funding, first stage to get groundworks done and second stage to build timber frame t wind and watertight.
First lender carries out valuation report which was the last thing required before funds released, this report was satisfactory and the first stage was released.
First lender requires further conditions to be met which was outside the contractual terms and was to be a substantial cost, if it was allowed than the reduction on the second stage would prevent getting to wind and watertight stage due to lack of funds (ultimately we would default on repayment as the second lender would not come in unless we were at that stage) we would not be able to repay the first lender what was borrowed).
just to step back a bit. The broker took the application fee over the phone but it was processed by the lender that provided the contract (well tats what we thought). The lender that provided the contract was a trading name (info from OFT) of the limited company that took the security over property) Within the grant of security it stated that it was being taken under the terms of the contract provided by what was thought to be the lender (the company that provided the contract).
still wth me?
We contacted the FA to let him know there was issues with the first lender and it will delay the requirement of the funding from the Second lender.
To our shock, the FA did not work there anymore and another FA told us that there is NO second lender in place and they hold no info about the need for a second lender. It is clear now but not at the time why!
The FA had left his company and found himself a nice new job with the broker that sourced the loan from the lender, this happened BEFORE the first stage release of funds from the lender! we knew nothing.
Anyway, a new application ( i will call it that for now) was submitted to the second lender by the new FA on our behalf, we asked for an increase in the original amount:tinysmile_hmm_t2: we thougt was in place to cover the cost of what the first lender wanted to reduce by as we were going to try borrow from elsewhere just to get to wind & watertight then use the second lender to pay off the first lender and the other money we borrowed. It seemed to drag on for a bit then it was refused. little did we know at the time, Mr First lender had his own team at the Second lender as he was a Broker and intermediary. he even confirmed it himself at a meeting that he had his own team there. Starting to see the big icture?
To put you in the picture, the Broker, the company that produced the contract (lender?) and the limited company now saying they are the lender (pursuer) and have their name on the security, are all owned by the same person we dealt with through the whole process!
Anyway, whoever it was (the lender) never produced the second stage funds
if we step back again.
a few weeks after releasing the first stage of funds, the lender?, sold off the security to someone outside the UK for the Full amount of loan he was to provide us, even though he only provided 1/3 of the contractual amount and was refusing to release the second stage, the other 2/3 while sitting on a nice profit from selling on the loan. he was doing well in my book and clearly didnt want us to know he had sold it on, not even his solicitor mentioned anything even though she dealt with the sale for the lender? and acted for the guy outside the UK.
Anyway, the term of the contract with the first lender expired and he had to go back and buy the security back (as i said, we knew nothing about this at the time) so that he could do the calling up notice to get back his 1/3 he did provide and his fees, oh these fees were ALL the fees he wanted for providing the whole amount even though he provided 1/3. this added up to almost double what he provided in his first stage release, again not a bad return for him!
Going back to the FA, it was to be that he doctored the information he provided us regarding the Second lender, I dont want to mention what i know but in my eyes its fraud and it can be confirmed by the SAR received from the Second lender SAR in my view are great things and tell a story themselves, in fact they tell many stories including one that the lender wont like either.
Now this is where things get really confusing.
It is now clear that not only does this guy have a limited company with two trading names, The Broker Company and the company that produced the contract as the lender, He also has a Partnerhip company, completely separate from the limited company and the trading name companies BUT it is exactly the same name as the company that provided the contract!
It has also been made clear ( by the lenders? solicitor) that he company that provided the contract was the Partnership company, a separate entity from the Limited company with the two trading names. it has also been made clear by the solicitor that it was the obligation of the Partnership company to notify the borrower that a Legal Assignment (sale) of the security from the Limited company to the other guy outside the UK. it is not possible for them to be obligated not notify of an assignment if they are NOT the lender.
it has also been provided by their solicitor that the Limited Company was acting as, wait for it, An Agent of the Limited company and the guy outside the UK was the lender providing the funds.
Although the solicitor acted for both the limited company (who took security) and the guy outside the UK who bought it they say they only facilitated the transaction on instructions from the lender? (Limited Company) Are you seriously confused yet?
Now, if we look at Consumer Licences
The Limited company and the two trading names hold a licence as a Mortgage Broker but they lend money.
The Partnership company who said in the contract they are willing to lend £xxxxxxxx have a licence as a Broker and consumer Credit, but they are not the lender (pursuer)
The solicitor says it was the company who produced the contract that were obligated to notify the borrower of a Legal Assignment between the limited company and the guy outside the UK, even though they state that they were a seperate company and nothing to do with the Limited company or the two trading named companies. You cant be a Partnership and that Partnership be a trading name of a Limited company, both are separate entities. The Partnership company owners all submit their own SA800 as self employed and pay tax as a self employed person. the limited company pay corporation tax and include income of the trading named companies.
just to add a little spice, A manager of the company that the original Financial Adviser worked stated on record that the guy we dealt with to source the funds did work for them but he was NOT authorised to provide Financial Advice even though the FA provided a signed copy of the T&C`s clearly stating what we pay for. then again. maybe i am as thick as the brown stuff and thats not what it means, you decide.
What do we charge?
There will be a fee payable by you to xxxxxxxxxxxxxxxxxxxxxxxxxx for Development Finance advice. This will be £xxxx and will be invoiced to you by us once the lender has produced a terms of offer and is payable once the formal offer has been received by you.
Our role
We act as Development Finance advisers.
Just one little thing came to mind. While the NEW application was submitted to the Second lender and we were awaiting a decision. The solicitor acting for the lender (whoever they are were or will be in the end) stated in a phone call (partially conducted via speakerphone) to our solicitor while we were all sitting there, told our solicitor that the New Application to the second lender was rejected, even though we were still awaiting a decision from the new Financial Adviser. How on earth did that solicitor have that information?
Jumping onto something i always wondered about until recently.
At the 11th hour on the day of the first release of the first stage funds from the first lender, the Broker requested an application to be filled in and returned to them immediately. The funny thing is that the prefilled application was for the full amount of money required to do the whole construction of the properties to completion. Why would that be if they were only providing, all in, 1/3 of the overall cost of the build. the other funny thing is, the Limited company had only been setup for months and their assests and liabilities (accounts) submitted to companies house were for the full amount of loan required to complete the properties, it may just be a coincidence.
i did read somewhere on this forum that brokers apply for a loan in your name for more that the borrower wants, provides the borrower with what they require, wait for them to default and go through the motions to repossess while sitting on a nice nest egg, sell after repossession, pass it on for 6 months and sell it back to the original person who will then market it for the full value. Maybe i am looking into things too much, then again.....:tinysmile_aha_t:
the Short version
Comment