Having said that, it's odd to sell a house without advertising it in any way.
I am guessing that the loan/mortgage was sold as part of a package and that the discount was 60% probably to the loan/mortgage balance. Receivers would not participate in a 'sham' sale process selling at 60% to the market value, they may or more likely would get sued. Receivers have responsibilities also.
However, if that is the case, how should the shortfall be treated? Even if the mortgage holder were irresponsible, they should not have to pay a much bigger shortfall than had the property been sold individually.
Even if the mortgage holder were irresponsible, they should not have to pay a much bigger shortfall than had the property been sold individually. Brendan
He was paying over all he could until a "bull dog" in the bank took over his account
I cannot understand the concept that if something is worth say €250k/ the mortgage outstanding is say €400k that the bank can sell it for €150k and that they can sail in to a court and say that they are owed €250k.
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My issue is that if it suits the bank to sell a package of properties at 60% of the loan value, so that my property gets only €90k, then they should not be allowed to pursue me for the full €60k. Just for the €50k.
Dermot says it was sold for 60% of its market value. People often claim that their property has been sold for below market value, but the bank or Receiver can justify a 10% or 20% discount. 60% is too much.
To Bronte. Yes absolutely can back up the claims
Why did he not agree a voluntary sale before Bank of Ireland appointed the receivers?
Was he paying the rent in full to Bank of Ireland? In most cases where banks appoint receivers, it's because they are not getting the rent. There are exceptions to this.
Having said that, it's odd to sell a house without advertising it in any way. Did they use an estate agent? It's quite possible that they sold a batch of houses to Target Investment Opportunities PLC at a discount. If so, then the customer should not have to pay the discount.
But the reality is that, in almost all cases, responsible investors can avoid a receiver being appointed.
Dermot,
Here is the settled Law relating to the appointment of receivers and their duties to the mortgagor ( borrower ) ( see cuckmere brick v mutual finance ). A receiver has a duty of care to act in good faith and in equity towards the mortgagor. The receiver must take reasonable steps to obtain the best proper price for the property at the time of sale. ( see Glatt v Sinclair ). The receiver is under a duty not to sacrifice the mortgagor interest recklessly, such as selling the house well under market value.
Now in relation to your case, if the bank instructed the receiver to sell the properties to a fund, this is called an off market sale and is relatively rare. Receivers need to be extra diligent and must take extra care to show the mortgagor the transparency of the transaction, that the property was adequately valued etc and that the receiver received the proper price for the property,reasonably attainable, at the time of sale. If, it is indeed the case that the bank instructed the receiver to sell the property as part of a portfolio to a fund, then I am afraid the bank has overtly interfered in the receivership and has expressed directly the progress of the receivership. ( see Silvern Properties LTD v RBS [2004] ) and now can be sued for any professional negligence claims for damage, together with the receiver. ( as the bank is no longer at arms length from the receiver ). This can also be used as a defence against the bank seeking summary judgement against your friend for the outstanding debt. ( contributory negligence )
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