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Taking back control from Bank of Scotland

There has been more bad news for Bank of Scotland this week. It would now seem that there are serious doubts over the strength of the bank’s security relating to loans originally taken out with Bank of Scotland Ireland.

At the end of 2010 a cross-border merger took place between Bank of Scotland Ireland (BOSI) and Bank of Scotland. As a result, BOSI ceased to exist. Since 2010 a large amount of loans both residential and commercial of the former BOSI has been sold to vulture funds such as Tanager Limited or Pentire Property Finance Limited, while the rest of the loans remain on the books of Bank of Scotland.

Ms Justice Mary Laffoy raised an issue surrounding the fact that BOSI remained the registered owner of charges over mortgaged properties even though it ceased to exist in 2010.

The legal situation is the only way in which the charge on the property can be transferred to a new owner is through an application by the registered owner. But as BOSI ceased to exist as of 31st December 2010, it raises the possibility there is no legal way that a transfer could be affected.

So what does this potentially mean for borrowers?

1.       BOS or the vulture fund may have no power to appoint receivers, take possession or force the sale of the asset.

2.       BOS or the vulture fund may be an unsecured creditor. Meaning that if the asset is sold all the sale proceeds will not necessarily have to be paid to BOS or the vulture fund.

3.       BOS or the vulture fund should not be treated as a preferred creditor over other unsecured creditors.

At GDP we are experts in debt advice and have been challenging the Banks and holding them to account for over four years. We are currently advising several borrowers who have been affected by these most recent developments and have stopped properties being repossessed and sold and have stopped BOS or the vulture fund pressuring our clients. In effect we have taken control back from the Bank.

If you have a BOSI loan or if the loan has been sold to a vulture fund you need to be fully aware of your options and what the Bank or vulture fund can or cannot do. GDP has a simple three step process to help you take control and solve your debt problems.

1.       Educate yourself with information and options

2.       Get a plan in place

3.       Move forward with your strategy.

Darwin AllenComment