I have a brother who borrowed to invest in a us property deal a number of years ago. Basically he didn't read the details and put up money to buy the land and building, the stockbrokers then used the property as a security to develop the plot and borrowed against it from Anglo.
Anglo have recently decided to pull in the loan and sell the property for pennies leaving investors with 96pc drop in investment.
He borrowed the money from an Irish bank to fund this and the bank asked him to take a 100k loan which was put in a deposit account as security against the main loan.
If he were to walk away and hand back the investment, would his credit rating suffer? He doesn't know if rather than take the loss which is a multiple of the 100k or if the bank could only go after the security
Any thoughts?
Anglo have recently decided to pull in the loan and sell the property for pennies leaving investors with 96pc drop in investment.
He borrowed the money from an Irish bank to fund this and the bank asked him to take a 100k loan which was put in a deposit account as security against the main loan.
If he were to walk away and hand back the investment, would his credit rating suffer? He doesn't know if rather than take the loss which is a multiple of the 100k or if the bank could only go after the security
Any thoughts?