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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3840
Experience:  Solicitors 2 years plus PQE
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I was approved by my bank for a business loan of 90K secured

Customer Question

I was approved by my bank for a business loan of 90K secured by SBA. Just before the date of the closing my bank calls and brings to my attention that while reviewing my files of another two secured loans that I also have with the bank they noticed a mistake on the deeds that needed to be fixed. One loan ends on 2026 and the other ends on 2035. Both loans are secured by different properties. The property securing the loans ending on 2026 also secures the loan ending on 2035 as an additional collateral but only until 2026 as stated on the loan payment title agreement. They now want to extend the title documents to 2035 claiming that is a mistake they found which needs to be fixed. As I stated the new loan does not have anything to do with the other ones.
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. When you signed the loan, did you reasonably believe this to be a mistake? Kind regards AJ

Customer: replied 1 year ago.
No, at all. Actually in fact I believe there is no mistake nor there ever was. The idea to go beyond and secure the 2035 loan with the property of the 2026 was only to cover a small gap that the bank had in their loan to value mumber needed to approve the loan. In fact the manager at that time had told me that once that gap was covered he could begin a process to release the additional property ffrom securing that loan. That was not stated anywhere else nor the bank now reconizea it. That mamager no longer works or is available. The first loan was signed on 2001 (2026, 480k owes 259k) property appraised at that time for 600k and the second loan on 2005 (2035, 371k owes 291k) and appraised for 400k. Now there is a property devaluation because of the economy and the last appraisal done on 2011 was for 500k.
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. To clarify, is the issue here that you do not want to give the bank any additional security? Kind regards AJ

Customer: replied 1 year ago.
No, I do not want to give additional security.
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. Presumably the bank are asking you to sign a deed to amend the security? What is the consequence if you refuse to sign it? Will they not make the additional loan?

Customer: replied 1 year ago.
That is correct!! I think is an act of undue influence! The new loan has nothing to do with the deeds already made.
Expert:  Alex J. replied 1 year ago.

Hi, Thank you. The problem as this is a business loan, the new loan is subject to contract, you cannot therefore force the bank to give you the new loan. You can complain about their conduct to the Financial Ombudsman on the grounds that this is worth less than 2million - but I am not sure you have a civil claim for the bank refusing loan. Can you get the loan from another entity? Have you suffered any losses?

Customer: replied 1 year ago.
I guess I can get the loan from another entity and with a good chance since it is an SBA (federal goverment secured) approved loan. Yes, I have suffered losses, and more that that they always told me the bank approved the new loan. I made promises to pay suppliers on that faith of being approved. They always made me think I was going to get the loan. This came at the last momment at the appointment for closing the new loan. Do you think I can get all my documents back from the bank. I am very dissapointed with their conduct. I think this is an act of undue influence or duress.
Expert:  Alex J. replied 1 year ago.

Hi, Thank you very much. Can you tell me which bank this is? Kind regards AJ