The epic journey to completion




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The epic journey, what’s this I hear? Walter Raleigh’s epic voyage in 1954 setting sail into the great unknown to find the fabled city of gold. No, I’m afraid this epic tale is one that’s far too frequent nowadays it’s the journey from initial enquiry to that most coveted of places, COMPLETION.

My remit was to acquire some desperately needed funds for a lady, who was so far up the creek, not only was she without a paddle but her canoe was well and truly sunk.

Suffice to say she’d built up £90,000 worth of personal debts, comprising of mortgage arrears, loans, overdrafts, credit cards, unpaid utilities, but more importantly personal loans from family and friends.

The bailiffs are at the door, the debt collection companies are incessant in their pursuit of her cash, leading to huge arguments, between my client and her friends and family as well as placing her own marriage on the rocks.

Add to that the fact that her father is extremely ill, and during the last couple of weeks she's buried her mother, it certainly pulls at the old heart strings. To cap it all off she's a lovely lady, god knows how I'd have gone on if she'd have been a Victor Meldrew type client, “I don't believe it” would have been repeated about a thousand times, he'd have probably had both feet in the grave.

The proposed security is my client’s father’s main residence, which is valued at £230,000 and unencumbered. Since her father, who is now in his mid-eighties, became ill, my client has been granted ownership of the deeds and power of attorney.

Prior to meeting with me the lady had tried raising funds via brokers; however, despite paying fees no solution had been found. These brokers were real amateurs, as according to her they'd told her they could easily get a BTL mortgage for her.

In September 2010 my client began her finance hunt. In her “client mind” she thought that she could just have a 2nd residential mortgage, raising £100,000 which would amount to less than 50% LTV. However, we as brokers know lenders frown on adverse credit, plus her currently thriving business is in its first year, so with no accounts, a mortgage of this value is out of the question.

Taking into account that her father still lives in the property, a residential buy-to-let mortgage would fall into the regulated category, and this severely mitigates the lenders. Add my client’s circumstances into the equation and there’s more chance of hell freezing over.

So, when I received the vase on 12th December, in my mind I knew that if she was lucky we could get an open term bridge. This type of bridge required at least one or two years to allow her debts to be totally repaid, and just as importantly to produce two years accounts for her business. I also had to research a bridging lender that offered regulated loans, my research turned up about half a dozen potential lenders. I however didn't hold out much hope, the exit route was extremely dodgy, and the cost of the rolled up interest was phenomenal. However, in desperation she gave me the go ahead. The bridging lenders, although happy with the security and the overall story, wouldn't have it, the moral issue of potential repossession whilst her elderly father was still resident just wouldn't sit with the FSA, but the lenders do have morals.

My final option was “sale and rent back” and that's what she agreed to do. My client agreed to the huge loss of equity, and all the other criteria that goes with Sale and Rent back schemes, so I recommended DFB Housing Solutions. Although the case was placed before Christmas it was January 4th when it really started to get moving, survey done, underwriting done, solicitors appointed and searches under way.

We were told it'd take about 5-6 weeks, and we were given a completion date of February 11th. However, due to past let downs my client requested I put bridging finance in place towards the end of January, with the Sale and Rent back as the exit, as she was under severe stress and pressure from her private creditors.

I managed to raise the funds with Heritage Bridging, however, both Simon at the lenders, and I managed to talk the client out of it as we wouldn’t be able to complete until about a week before, the exit finance and the costs incurred were mad, so reluctantly she decided to wait until 11th.

However, here we are sat at the end of February and still not complete, as she predicted. Absolutely shocking lethargy from the DFB appointed solicitors; the lady is now on valium. The sad thing is the blasé way that the lender said that it would definitely be complete, with hindsight we should have used the Bridging, but now it's too late, and we expect completion this week, fingers crossed.

 

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