Cerberus Capital Management Interest Rates

T

TrueBlue

Registered User
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Hi,

Apologies if this is the wrong section. I searched Cerberus and only found one thread on it in here.
2 years ago, I restructured my family home mortgage with Danske into one performing variable rate loan and one warehoused loan. (about 50%/50%). I have not missed a payment since then.
The house is in small negative equity.

Last week I received a letter from Danske/Pepper saying they are selling the loans to Cerberus Capital Management. I know they must comply with the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015.

More than likely, Cerberus have bought the loans at a huge discount meaning there is positive equity in the house as far as they are concerned.

As Cerberus are a vulture fund, will they
1. be able to increase the variable rate so high that they deliberately force me into arrears in order to repossess my home?
2. can they apply different rates to each customer or must they have the same rate across the board for all customers?

Thanks.
 
TrueBlue said:
Hi,

Apologies if this is the wrong section. I searched Cerberus and only found one thread on it in here.
2 years ago, I restructured my family home mortgage with Danske into one performing variable rate loan and one warehoused loan. (about 50%/50%). I have not missed a payment since then.
The house is in small negative equity.

Last week I received a letter from Danske/Pepper saying they are selling the loans to Cerberus Capital Management. I know they must comply with the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015.

More than likely, Cerberus have bought the loans at a huge discount meaning there is positive equity in the house as far as they are concerned.

As Cerberus are a vulture fund, will they
1. be able to increase the variable rate so high that they deliberately force me into arrears in order to repossess my home?
2. can they apply different rates to each customer or must they have the same rate across the board for all customers?

Thanks.
Click to expand...

Hello,

The first thing you need to do is look at the correspondence you have received and in particular, your loan agreement and any subsequent documents you have signed (relating to the split loan arrangement etc). See if there is a formula for calculating the Standard Variable Rate or any form of price promise with regards to a maximum rate over the ECB etc.

In response to your questions and assuming there is nothing relating to the rates in the documentation then yes, in theory they can charge whatever rate they want. However, if they pushed the rate up from say 4% to 8% (without genuine good reason - such as significant ECB rate increases or increases on the interbank market etc), forcing you into arrears, then you could probably argue a good case in a court room.

In the short term, I would be more focused on the terms relating to the split loan and in particular the part which was "parked". How long is it warehoused for, what triggers it being brought back to being an active loan etc.

Hopefully in time, you will be in a position to refinance your loan and move away from them. In the interim, if you are making all payments to agreed terms and there's no expiry dates coming up soon, then I would not be overly concerned (but would keep an eye on them, nonetheless).
 
MrEarl said:
Hello,

....See if there is a formula for calculating the Standard Variable Rate or any form of price promise with regards to a maximum rate over the ECB etc....
Click to expand...
Thanks MrEarl,
I'll check this tonight and will report back for the benefit of other readers.

..in theory they can charge whatever rate they want..
Click to expand...
Even 1-2% would push us into arrears. And vulture funds being what they are concerns me.


In the interim, if you are making all payments to agreed terms and there's no expiry dates coming up soon, then I would not be overly concerned (but would keep an eye on them, nonetheless).
Click to expand...
This is the case. Thanks again.




I'd appreciate comments from others also.
 
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