Removing Security Charge From Toxic Loan

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A couple of family members had various loans with a high street bank and my sister stupidly put up her house and a commercial property for security. After many failed payments, deals with the bank etc they have now started paying back the bank at a consistent rate with the commercial property alone covering the outstanding debt.

As the current setup is based on yet another deal they made which is made up of a bunch of loans the bank has just kept the security rolling.

is it possible to use any regulation to try and remove the residential from the security, I know I should ask the lawyer but she only just brought it up again this morning and it would be nice to hear if anyone else has had a like for like experience.

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williaa68 said:

It is basically a matter of contract law - if the current facility letter that contains the terms of the loan says that the loan is supported by the security which includes the residential property then there really isn't very much that you can do other than renegotiate the terms. When you ask the bank to renegotiate the terms they will take into account two things-the cash flow of the business and the security. If you are asking them to release the security and rely upon the cash flow they will likely charge a significantly higher rate.

The only real alternative is to demonstrate that the security was granted I'm properly in the first place - for example that somebody forged signatures on the charge deed or exercised undue influence etc. That would likely be a rather difficult and expensive process

The issue is they are making a single payment to cover a number of loans which all range in value, length and security. There is no contract in place covering this arrangement just an agreement with the bank that they would pay a fixed 6k a month until its repaid.

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Chrisgr31 said:

Has your sister been involved in each renegotiation?

Not really,the issue is communication is thing to say the least