Banks are Horrible

im confused again

Talk about the tax payer bailing out the banks and then the banks causing so much heartache for the tax payer!!

Anyway, my partner had a successful property business, as did a lot of people during the boom. However my partner had all her payments up to date and was still shafted by the bank.

While making some changes to her loan agreements, she decided to buy out of her fixed rate and change to a variable rate which would be agreed on an annual basis. To do this she had to pay a big chunk of money.

But when the first year was up and it was time to agree the rate for the second year, the banks had run into trouble and needed to get as much cash in as possible, so they decided not to agree a new rate and decided they wanted my partner to repay a huge amount of money, which she could not do. At the time all her payments were up to date and everything was working fine.

Because she could not repay this huge amount of money the bank brought her to court, sold all her assets in a firesale and are now persuing her through the courts for the balance, which she hasn't got.

Having treated her so badly, the bank insist on continuing through the courts to get their judgement, and continue to run up huge legal costs.

Who runs the banks, do they know anything?? They aren't much better than the government.

They took a customer who was making all her repayments on time, ran her business into the ground, and are now looking for a judgement, which if they get all she can do is file for bankruptcy.

Can anybody shed anylight on this situation for me. She is battling away in court but it is an uphill battle. Who would rule against the banks for fear of the can of worms it might open.

Is there anything else she can do??

TheBoffin

While making some changes to her loan agreements, she decided to buy out of her fixed rate and change to a variable rate which would be agreed on an annual basis. To do this she had to pay a big chunk of money.

But when the first year was up and it was time to agree the rate for the second year, the banks had run into trouble and needed to get as much cash in as possible, so they decided not to agree a new rate and decided they wanted my partner to repay a huge amount of money, which she could not do.

As harsh as this might sound, the reality of it is that your partner changed the terms of agreement when she changed from fixed to variable. Variable allowed the bank to charge what they like vs keeping to the original agreement.

Perhaps the move from Fixed certainty to variable uncertainty was not the best advice or decision made if multiple properties were involved etc.

I'm not having a go, I detest banks myself, and it looks like they definitely shafted. Anyone I know that switched from Fixed to variable also got screwed over, You are certainly not alone.

im confused again

It's not that they tried to charge a higher interest rate, the bank called in the loan because they needed the cash. And because she couldn't pay such a big sum in one go, they ruined her business and her life.

kippy

im confused again wrote: »

It's not that they tried to charge a higher interest rate, the bank called in the loan because they needed the cash. And because she couldn't pay such a big sum in one go, they ruined her business and her life.

If they needed the cash, why did they go down this route? She couldn't give them the cash and they were forced into selling her assets at a lower price than they were getting back in loan repayments.

I think theres more to this.

TheBoffin

im confused again wrote: »

It's not that they tried to charge a higher interest rate, the bank called in the loan because they needed the cash. And because she couldn't pay such a big sum in one go, they ruined her business and her life.

Ok, I must have misread your OP. Legal advice on here is a no-go, only thing I can suggest is to go get some legal advice on it and find out how they managed to recall the loan

_ciaran_

im confused again wrote: »

she decided to buy out of her fixed rate and change to a variable rate which would be agreed on an annual basis. To do this she had to pay a big chunk of money.

But when the first year was up and it was time to agree the rate for the second year [...] they decided not to agree a new rate and decided they wanted my partner to repay a huge amount of money, which she could not do.

Hi OP,

Not sure I understand what happened here - she went on to the standard variable rate. How did she then end up having to pay a huge sum of money?
Did she go interest only when she came off the fixed rate or something?

im confused again

kippy wrote: »

If they needed the cash, why did they go down this route? She couldn't give them the cash and they were forced into selling her assets at a lower price than they were getting back in loan repayments.

I think theres more to this.

Nope. Nothing more too it. That's so unbelievable. They wanted cash did what they wanted to get it!!

_ciaran_

The bank can't just "call in the loan". A term would have been set out in her letter of offer which was signed by both her and the bank.

There has to be more to this, it doesn't make any sense.

im confused again

_ciaran_ wrote: »

Hi OP,

Not sure I understand what happened here - she went on to the standard variable rate. How did she then end up having to pay a huge sum of money?
Did she go interest only when she came off the fixed rate or something?

When she went on to the variable rate, it was agreed that the rate would be negotiated every year, not the availability of the loan. But when the year was up they said the loan was no longer available and they wanted their money back ( I don't know the actual terminology)

It wasn't part of the mortgage document that the loan would be continued every year, but she had letters from the bank guaranteeing that it would be continued every year.

im confused again

_ciaran_ wrote: »

The bank can't just "call in the loan". A term would have been set out in her letter of offer which was signed by both her and the bank.

There has to be more to this, it doesn't make any sense.

They did just call in the loan, and you're right it doesn't make sense.

It wasn't a basic mortgage, it was corporate loan agreement.

BuffyBot

This is a case for a qualified, legal professional. Not one for an Internet forum.