I’m seeing a good number of customers of the banks complaining that their assets have been seized and sold at a massive undervalue, often leaving them with a personal guarantee liability that could lead to them losing everything.
Why is that?
Is it just because of where we are in the recovery/recession? Are the banks merely taking the opportunity, as they always do at the end of recessions, to reduce their loan books by selling out at a time they, but their customers don’t, consider to be optimum? Or is there a concerted land grab going on? Are the banks really not best set up to, or interested in, maximising realisations? Are the people that come to see me the victim of the negligent actions of a few? Are some individuals within the banks acting fraudulently to feather their own nests or those of preferred clients/contacts?
All these views have been expressed to me and more… exactly where the truth lies differs from bank to bank, department to department. Suffice to say there is a growing number of former clients of the banks who tend towards the blacker views…
It’s clear to me that the banks are flexing their commercial muscle and ‘burying’ many claims for having (at least allegedly) sold assets at an undervalue. You see it’s really not very easy for anyone, however knowledgeable they are in the law and resources they have, to take the banks on. The banks will wheel out their tame, (very) expensive, and (very) experienced legal eagles – I say tame because they do the banks bidding without any exploration as to whether their arguments have any legal or moral foundation. The banks have simply bought them to cover up their malpractice.
What I’ve seen several times recently could potentially be attributed to mere incompetence. 5 years on from the start of the recession, the banks have been holding on to a lot of property, in one way or another, for a long time, longer than they want. Unable to sell it until now, they’re now shifting far more property. But what they are not doing is:
- Casting a fresh pair of eyes over cases. Old mistakes are being perpetuated. There’s no vision.
- Getting a fresh agents’ report advising on how best, at this time, in these market conditions, to expose the property to the market. They’re adopting a tick box approach more appropriate for an earlier time. If they marketed it previously, they’re relying on that.
Let me give you an example of one case I am working on right now. In the 3 or so years between the bank’s repossession and ultimate sale of a piece of land, some laws changed and the market for development land in the area improved massively. My client’s property turned out to be a ransom strip, holding up a £30m residential development, making it very valuable indeed on a Stokes v Cambridge basis. The bank had even failed to heed their own agents’ advice to investigate the possibility of the land being a ransom strip. They’d sold it as a piece of pretty useless land yet still chased the personal guarantors for their alleged ‘losses’ – had they sold the land for what it was really worth my client would have had a serious amount of money handed to him, there would have been no loss. Negligent? Fraudulent? Whatever it proves to be, it is actionable, although the bank will fight us every step of the way.
Be prepared for a long fight – the bank will not give way unless forced to do so in court.
You can expect judges to give you every chance to present your case. It is almost as if they have seen a lot of other similar cases to yours and are driven to see justice done for you, the small man. Do your best to present your case properly, backed up by lots of hard evidence – after all you can expect the banks to best present their own position and you need to prove they were somehow lacking.
Expect the fight to be costly in money terms. Your lawyers, agents and other experts will be expensive. And if you lose you can expect the bank to seek costs against you – and that will be at their lawyers’ extortionate rates, meaning you not only pay your own costs, but also a good proportion of the other side’s.
Expect the bank to play the giant’s role in your David v Goliath fight. They will use every trick in the book to bully you into giving up the fight. They will try to wear you down over time. They have systems to take care of things, to manage the litigation, but for you it’s personal and there is no escape. You’ll not sleep properly, this will be a constant worry. To win you will need to be resilient and in good health.
If you’d like some help fighting a bank, I’d be delighted to help… just call or email me.