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There’s been a trust deficit between the customers and the banks are on the groups out there claiming to take the bank to court on group litigation. Has this affected people’s perception about the banks?

There most definitely is a trust deficit. Otherwise, the only way that any type of trust can be reestablished or standardized was to be if there were laws or things in place.

So even if there was some sort of government program which says it’s not possible for any bank to take over your property or sell it because your debt issues. There’s 100% guarantee that we will support you through the process. We’ll give you a five year window to sort yourself out of something like that. That way it is a bit friendlier to individuals because circumstances change people’s lives change things happen which are out of your control.

There are a lot of unknown circumstances, but unfortunately, there isn’t anything out there at the moment that allows any trust to happen with banks. If anything, what happen are the building societies, they tend to be a bit more old-school. They’ve had a lot of trust with their relationships because it’s been built upon a community built upon trying to help their customers.

There’s a more element of leniency in certain building societies and the way they lend money, whereas the major banks definitely are not so trusting in their ability to deal with the borrowers, and they want to take it fully to court and take it all the way to court and get their money that way. Well, definitely the ability to do that. My question was around one of the fundamental things I think I’ve learned this morning from what you said is that the banks really have authority to take control of their asset quite quickly.

  1. Is it in the actual contract, how many weeks or months they have to wait or can they just do it anytime they like, whenever they feel you’re in breach?
  2. Do they have to support that evidence if they think you’re in breach, but you’re not in breach because of arrears, maybe something else?
  3. What are the other clauses that could give the rights to the bank to appoint an LPA receiver?

The main one is around missed payments or defaults, but primarily around arrears. That’s the main one and the other one is circumstances where somebody bought a property as a buy to let and they’ve been decided to live in it. That also becomes an issue because technically the borrower has actually broken the terms of the loan and they’re now living in the property, which means that they’ve got different rights when it comes to any debt recovery issues for the bank, because technically, now it becomes a regulated property because they’re living in it. So it increases their risk in terms of getting control of the property back in their hands.

The second area, that’s sometimes a problem. But those are the two key ones I can think of.

  1. what about dilapidation or change of the loan to value clause, or maybe certain conditions on the property certain uses permitted for, and you do so are these things included?

Well, there are lots of other clauses as well, which are little known by most people. One of them is actually that if you’ve got a higher value of the property is fallen and you’ve got a portfolio, we have known banks to actually say, look, we want you to put more money into the property to reduce our debt because the value has fallen. So that has occurred in our experience, that’s another area.

Another area that these are a bit more technical area is something called an all monies charge where the bank has charged across maybe ten of your properties. And this is one of them. And if you’ve got arrears on this particular one or another one, they can technically force their charges and across all ten properties to claim back any shortfall on one of the properties that they took receivership off but couldn’t get their money out.

So, yeah, there are a lot more other arrears, but I’ll probably have to sit down and try to make a list or something, but those are three or four of which some of the arrears that do apply when it comes to receivers being appointed.

  1. How can they prove that the loan to value is incorrect?
  2. How can they blame the mortgage or the borrower for that?

Well, there’s nothing to do with the responsibility of the borrower. What they’re doing is they’re doing everything they’re trying to book the person, which is whatever you’ve signed up to.