Post by andrewholgate on May 23, 2014 16:42:51 GMT
We wish to update lenders on progress towards repayment of this loan (due 21 June 2014). Unfortunately, we have recently been advised that the borrower has died overseas meaning the plans he had to redeem the loan have naturally stopped. His assets are now being managed by his executors who are aware of this loan and are continuing to market and sell the properties in order to repay.
We have had discussions with the executors and they are focused on achieving quick sales of the properties to avoid default charges on the loans. By way of background, the security split on the loan is as follows:-
- Commercial property (owned directly by our Ltd company borrower) - valued at £145k based on a restricted 90 day marketing period.
- Personal guarantee from the deceased (which his estate is bound by) supported by:
- Legal charge over a residential buy to let property valued at £275k on an open market basis.
The executors have advised us that an offer of £220k has been received on the residential property, and agents are recommending that they accept it. Assuming net proceeds of c.£215k are received this will leave a residual balance of c.£70k secured against a commercial property with a restricted marketing value of £145k (48% LTV). In light of this we are confirming that executors accept the offer with a view to completion as soon as is practically possible.
Moving forwards, whilst there may be a substantial partial repayment it is now highly unlikely that the loan will be fully repaid by the repayment date. In the event it is not repaid there is the option to default the loan and allow default interest to accrue on the outstanding balance through to repayment (i.e. when the properties are sold) . This will be payable to lenders on redemption of the loan.
We are continuing to work with the introducer and the executor and will update lenders regularly
We have had discussions with the executors and they are focused on achieving quick sales of the properties to avoid default charges on the loans. By way of background, the security split on the loan is as follows:-
- Commercial property (owned directly by our Ltd company borrower) - valued at £145k based on a restricted 90 day marketing period.
- Personal guarantee from the deceased (which his estate is bound by) supported by:
- Legal charge over a residential buy to let property valued at £275k on an open market basis.
The executors have advised us that an offer of £220k has been received on the residential property, and agents are recommending that they accept it. Assuming net proceeds of c.£215k are received this will leave a residual balance of c.£70k secured against a commercial property with a restricted marketing value of £145k (48% LTV). In light of this we are confirming that executors accept the offer with a view to completion as soon as is practically possible.
Moving forwards, whilst there may be a substantial partial repayment it is now highly unlikely that the loan will be fully repaid by the repayment date. In the event it is not repaid there is the option to default the loan and allow default interest to accrue on the outstanding balance through to repayment (i.e. when the properties are sold) . This will be payable to lenders on redemption of the loan.
We are continuing to work with the introducer and the executor and will update lenders regularly