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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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my situation is i owed a small amount of money to a high street

Customer Question

my situation is i owed a small amount of money to a high street bank totalling 25k (private) and my ltd co. owed 36k. my bank took security for the money and a personal guarantee for 40k. in 2007 the bank released their security, they say in error. i was then threatened with bankruptcy proceedings if i didn't sign a new mortgage. by this time the loan had grown i.e. interest, charges and legal fees. the bank offered me 15k to buy back their security. i signed blank mortgage forms in front of bank witnesses i had never met. a condition of the new loan was that an asset of mine had to be valued at over 8000k. instructions were sent to the valuer but the bank also included additional lands that did not form part of the asset's title. the valuation came in at over 800k and as a result a new loan was opened for over 110k. at no stage did i sign any new loan agreements or receive any terms or conditions.

since the above problems i have made a dsar request to the bank and the valuer. the bank has sent me a large file but the additional information relating to their instructions to the valuer is missing. this is despite the fact that the missing information is referred to in the valuation report. the valuer has also confirmed that despite referring to the plans and in fact attaching a copy of those plans to his report he was never sent them from the bank. there is also no communications between the bank and my solicitor.

i recently made a complaint to the bank before i take this case further. the bank has come back re the valuation indicating that the instructions are an internal document and therefore they will not be providing me with a copy of this document. this is despite the fact that i have in my possession a copy of the valuation and the instruction (less the plans) from the valuer. it also seems odd that the the title number for the asset is very clear showing the extent of its boundaries etc. the additional lands clearly have additional title numbers. surely this should have been cross checked by their security centre. in fact one of the valuation check list points does ask the question that the land within the title of the proposed security matches that of the land referred to in the valuation. for information purposes we are talking of additional lands in the region of 3+ acres. this box has been left blank. i must also point out that the title plan attached to the mortgage is purely for the asset only.

following the new loan which in effect cleared my personal guarantee, the bank which had previously submitted a proof of debt to cover the ltd companies debt, withdrew their proof of debt. the new loan was in fact was also used to pay off all of the original debts which included high interest rates, charges, legal and arrangement fees.

the asset was recently repossessed and it has now become apparent that the asset was overvalued by almost 40%. also at the same time my solicitor also gave a good report on title to the bank at the time of taking security. again the question was asked re the land ownership etc.

the bank have further security on an asset of mine which has little or no value. the debt has now gone well over 150k. i have told the bank i want them to issue proceedings for their debt as i would defend it, their reply is they will sit on their security, they have also said this will never end up in litigation! they have however, through their litigation team (and the dsar file notes) admitted it may be a tricky claim to pursue. however they have indicated they are open to offers.

on top of all this there is still a valid undertaking (given in 2005) to the bank from my/their solicitors for 45k which seems to be forgotten about. i must point out that this could have been performed as per the undertaking in 2009.

my argument is 1. there has been a serious misrepresentation regarding the valuation. 2. there are no signed loan agreements or terms and conditions for that loan.3. the bank has failed to mitigate their losses, if they had kept their proof of debt and the undertaking had been performed my debt would have been cleared in full.

finally the bank has offered me a token payment (less than 1k) in recognition of any inconvenience caused by the result of us not being able to find your business loan agreement!!

i would appreciate any way forward?

many thanks
Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.

Alex Watts :

Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return You do not need to wait here as you will get an email when I reply.

Alex Watts :

What is it you want to achieve please?

Customer:

not to owe the bank!!

Alex Watts :

If the loan has not been signed, how can they seek to enforce it?

Alex Watts :

Have proceedings been issued?

Customer:

hi

Customer:

no the loan has not been signed and proceedings not commenced

Alex Watts :

Ok - and the PG was blank?

Customer:

the pg was signed but was cleared by the new loan drawdown

Alex Watts :

Ok - were you released from it?

Customer:

from their correspondence it states that when the new loan was provided it enabled me to repay my guarantee liabilty

Alex Watts :

But does the PG say you are discharged once the loan is repaid?

Customer:

i can't find any correspondence in the file, is there anywhere else i should look?

Alex Watts :

It should say on the PG

Alex Watts :

But in short:

Alex Watts :

If the 1st loan was repaid then you should be released

Alex Watts :

That is because there is no further guarantee

Alex Watts :

Unless the PG states it is continuing until discharged

Alex Watts :

In any event the loan is not signed

Alex Watts :

If it is not signed, it is not executed

Alex Watts :

If it is not executed then there is no contract

Alex Watts :

It therefore fails at the first hurdle

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

if there is no contract but the bank has in fact used those funds to clear the original debt how does that work??

Alex Watts :

The bank can't - it has no authority to do so

Alex Watts :

In any event there was a misrepresentation in terms of value

Alex Watts :

They have a duty to act with all good faith - they did not do that

Alex Watts :

I dont think based on what you have said, they would win at court

Alex Watts :

The problem with the contract is the main area

Alex Watts :

Can I clarify anything else?

Customer:

how should i proceed, at present they are sitting on a limited amount of security but with a owed sum always increasing. the bank are well aware of all their mistakes along with the more serious issue regarding misrepresentation. someone is at fault, the bank, valuer or solicitor? how can i bring this to an end?

Alex Watts :

You should get a Solicitor to write to them and set out your position.

Alex Watts :

This will cost around £200 but may well end up closing the matter

Alex Watts :

Or you could consider complaining to the Financial Ombudsman

Alex Watts :

They offer a free service

Alex Watts :

Their website is: www.financial-ombudsman.org.uk

Alex Watts :

Can I clarify anything else?

Customer:

with respect to the ombudsman are they totally impartial, could they still argue 'well you did have the original money after all?' or will they take into consideration failure to mitigate, misreprensenation etc

Alex Watts :

They will take everything into account.

Alex Watts :

But if course if the Bank know they are in trouble it may not be pursued

Alex Watts :

Which is why you should get a Solicitor to write a letter

Customer:

agreed, one final point why can't i just sue the valuer for the current balance owed to the bank for his negligent valuation?

Alex Watts :

You could but then they could try and bring a counter claim

Alex Watts :

You dont want any risk of that

Alex Watts :

You want the loan PG to be gone

Alex Watts :

Therefore go via a Solicitor first

Customer:

just before i go to the solicitor i did originally make a nominal offer (£1.00) in full and final settlement which was of course refused. their litigation department know they are in the wrong and said best to wait for my complaint to be addressed. would it be wise to go back with another small offer or even a part 36.

Alex Watts :

Part 36 yes

Alex Watts :

That is tactical

Customer:

you say i could risk a counterclaim if i issued against the valuer, who from?

Alex Watts :

Well have you overpaid anything?

Customer:

understood!

Alex Watts :

 


If this answers your question could I invite you leave feedback on my service which I hope has been excellent today, if you need more information or help then please click reply.


Please remember that I am always happy to help if you have future questions, even if I am in Court I can normally respond within a few hours. For future information, please start them with ‘For Alex W’.


Please bookmark my profile if you wish for future help: http://www.justanswer.co.uk/law/expert-alexwatts/

Alex Watts :

Remember - litigation is ALWAYS a risk

Customer:

with respect to a part 36 if i believe they have failed mitigate their losses in full coupled with the misrepresentation issues where should i pitch my offer? sorry to put you on the spot!!

Alex Watts :

I am glad you have asked me - what do you consider to be the best pitch for you?

Customer:

if i believe i should owe them zero why should i offer them anything. the undertaking is still valid and they also withdrew their proof of debt...

Alex Watts :

Yes then you could keep the Part 36

Alex Watts :

Can I clarify anything else?

Customer:

my first offer was not a part 36 it was just in full and final settlement

Customer:

and wp

Alex Watts :

Ok - it might be worth putting that as a Pt 36

Customer:

seeing as the part 36 route is mainly aimed at costs should i still get a sol to write an accompanying letter. i must stress i have already informed them i have taken advice but have given no cost details

Alex Watts :

Yes

Alex Watts :

You should still get a Sol to write

Alex Watts :

They may take it more serious

Customer:

thanks alex, i'll let you know what happens if that's ok. there may also be a follow up question if i come across anything else in their file

Alex Watts :

Sure, please put for my attention

Alex Watts :

Please remember to leave feedback before you go today

Customer:

thanks alex, just the answer i was looking for and confirmation of my thoughts too....................cheers

Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
Ash and other Law Specialists are ready to help you
Customer: replied 3 years ago.

hi alex


 


the bank has come back indicating that it is not uncommon practice for the bank to drawdown the loan monies and this is evidence in itself that there is a binding contract between us.

Expert:  Ash replied 3 years ago.
They need evicence. They can't prove it.

Alex

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