Cerberus ex-Danske tracker deals

Discussion in 'Mortgage arrears & negative equity case studies' started by anynameyouwish, Mar 7, 2017.

  1. anynameyouwish

    anynameyouwish New Member

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    I know of someone who met with Cerberus last week; they have an ex-Danske tracker mortgage, sold to Cerberus last October.

    It was clear at the meeting that Cerberus are open to offers if the loan can be refinanced elsewhere. I don't know what to advise them in terms of what they should offer.

    Does anyone know at what level of discounts are being agreed?
     
  2. MrEarl

    MrEarl Frequent Poster

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    Last edited: Mar 7, 2017
    I would imagine it is decided on a case by case basis....
    • What margin is the tracker on ?
    • What size is the actual loan and is it in arrears (if so, by how much and for how long) ?
    • How long is left on the contracted term of the loan (keeping in mind that if it's in arrears, it could be considered to be in absolute default).
    • If the loan has been in arrears for some time, have there been any interim agreements made on reduced levels of repayments and if so, whats the history to those repayments, has the agreement ended and if so, has a request been made for a further period of reduced repayments etc ?
    • Whats the current value of the property ?
    • Are there any sensitive or particularly complex factors to consider (age, health issues (mental or physical), dependents etc.) ?
    • Whats their financial situaiton like (can they raise a loan elsewhere and if so, for how much / what other assets do they have etc.) ?
    • Has the borrower obtained a copy of their file and legal documents, to see if the lender has a complete set of documentation, if all loan and legal agreements are completed correctly etc. ?
    I would expect Cerberus to want full documented disclosure, so they can make an informed decision. This may well include consenting to a valuation being prepared on the property by a valuer that is acceptable to Cerberus, swearing off personal statements of affairs (possibly in front of a solicitor) etc.

    The Borrower may well be advised to get an experienced advisor on board to help them (no disrespect intended, but I mean someone experienced in debt negotiation, unless you happen to fall into that particular category) :)
     
    Last edited: Mar 7, 2017
  3. anynameyouwish

    anynameyouwish New Member

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    Indeed - thanks for that: all good points and all accepted. As you say, it will depend on the circumstances. However, at the end of the day this is a negotiation, and a very one sided one at that. If those making the case to them have knowledge of what they have agreed to in the (recent) past, the imbalance of the negotiation is addressed somewhat. Hence the question. If we know they have agreed to anything between X and Y % writedown, this is useful information to have. For the record, something between 15 and 19% was indicated by Cerberus at the meeting.

    Next question: who might they go to who has direct recent experience of dealing with this particular lender?
     
  4. MrEarl

    MrEarl Frequent Poster

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    Last edited: Mar 7, 2017
    Hello,

    I would suggest you do a little further reading on this website, perhaps not just in respect of former Danske loans but in respect of general negotiations on behalf of Borrowers with various third parties such as Pepper, Capita, Certus (now closed down) etc. alongside the Banks.

    While there are lots of "advisors" to be found, I would look for recommendations from people here or elsewhere. I would ensure that amongst other things, the advisor has direct experience in dealing with homeloans and has relevant qualificaitons in both financial advice and also, insolvency.

    Perhaps there are recommendations available for some of the people on this list for example (while I know this is not quite an insolvency situation, these practioneers will most likely have dealt with the same parties as your people are meeting with) ?
     
    Last edited: Mar 7, 2017
  5. anynameyouwish

    anynameyouwish New Member

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    Indeed! Which is why I'm asking the question. I have browsed previous posts on this site, but nobody has stood out for me. Apart from finding someone, I was kind of hoping for someone to respond along the lines of, "yes, I agreed a writedown of x% last month", but maybe that's asking too much? The Internet in general is a great mechanism for opening up information for the benefit of consumers; rebalancing somewhat the power that service and product providers have. As it stands, for things like this, one is very much in the hands of any number of "advisors", who I'm guessing vary between the brilliant to the downright dangerous.
     
  6. lukas888

    lukas888 Frequent Poster

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    Most debtors who obtained write downs are subject to confidentiality clauses.and even on sites such as this are probably nervous to
    disclose any detail.Mr Earl has given you a very comprehensive heads up on the deciding factors of what write down is possible.Without
    you disclosing details it's impossible to speculate.
     
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  7. anynameyouwish

    anynameyouwish New Member

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    I met with the person in this situation yesterday. From what they said, it's very clear that the only deciding factor is what the offer on the table actually is: they have zero interest in the circumstance, history or indeed anything else about the borrower. This is not a bank, nor are they interested in anything beyond a very short time horizon (this was stated explicitly by them, apparently). Hence, any advice regarding normal debt negotiation (MrEarl's points) is not particularly relevant: what's needed is someone with recent direct experience who can provide some insight on where to pitch any offer (assuming it could be financed elsewhere, but that's another question).
     
  8. Brendan Burgess

    Brendan Burgess Founder

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    Tanager are offering some customers a 40% discount on their former Bank of Scotland trackers. But it appears that Tanager bought only those loans which were non-performing. This means that Tanager bought them very cheaply so can afford to do a big discount.

    I doubt if any advisor has experience in this area worth very much. Not many such deals have been done.

    Your friend should probably quote the Tanager offer and ask for a discount of 40%. Cerberus may well come back offering a 15% discount.

    But your friend should also work out what a deal would be worth to him. The tracker is worth more if
    • it's a low tracker margin
    • It's a long time to go to maturity
    • They will not want to move for a long time
    Your friend should accept less if the margin is high, there is only a few years left, they might want to move house in the near future and if they have plenty of cash with which to pay down the mortgage.

    I have a fuller discussion of the issue here:
    What is a fair price for paying off a cheap tracker early?
     
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  9. anynameyouwish

    anynameyouwish New Member

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    Thanks for that. They are aware of the reports about Tanager.

    I don't want to say too much, as I don't wish to identify them, but the following is an outline of the position. Current rate is less than 1%. Current balance is more than €500k. More than 10 years left to run. It was non-performing at the time of the transfer. They do not want to move. There is no spare cash.
     
  10. Gordon Gekko

    Gordon Gekko Frequent Poster

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    From what I can see (which is a small sample of friends, clients, family, and myself), NIB/Danske seem to be retaining the performing tracker loans and paying Pepper to administer them.

    This suggests to me that the ones they've sold have inherent issues (e.g. restructured, negative equity, etc).

    Has any Danske customer with no issues at all ended up dealing with a vulture fund?
     
  11. lukas888

    lukas888 Frequent Poster

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    If as you say the loan was non performing and there's no spare cash how is it going to be refinanced.With a non performing history no other lender will take it on.
     
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  12. Brendan Burgess

    Brendan Burgess Founder

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    The only way it might be refinanced would be with a sub-prime mortgage from Pepper.

    So they would be paying a high mortgage rate.

    So they would need a much larger discount than normal to be tempted to refinance.

    If a family member or friend had €400k sitting in a deposit account earning close to 0%, then it would make sense to do a deal with them.

    Brendan