Belfast Telegraph

New warning for borrowers whose loans are sold on by their lenders

By Margaret Canning

An advisor to property owners who face the prospect of their loans being sold by their bank has said borrowers are "ignored" in the process of loan sales.

Conor Devine, the head of GDP Partnership, said such loan sales continued to be big news and were affecting "hundreds" of businesses in Northern Ireland.

Recent transactions included Royal Bank of Scotland's sale of €2.6bn (£1.9bn) in loans in Project Finn to a joint venture of Deutsche Bank and Apollo Global Management, while the Republic's bad bank Nama had shortlisted three investors for its €7.2bn (£5.2bn) Project Arrow.

Cerberus Capital Management - who bought Nama's Northern Ireland portfolio - is on the Project Arrow shortlist with Goldman Sachs and CarVal Investors in a joint bid, and Apollo Global Management.

Mr Devine said loan sales were helping banks get their balance sheets in order.

"We all understand this must happen for them to be in a position to lend again and certainly in the last few months we have seen some evidence that the banks are looking to lend money again which is a positive for the economy," he said.

But he also said he felt the borrowers themselves were being overlooked.

He said: "It is now very clear that there was little to no duty of care shown to any of the borrowers whose loans have been sold by any of the banks and although not surprising, is still very bad form at best. "The result being there are now hundreds of businesses in the country with no bank to support them and literally struggling to get by month to month."

He claimed parties whose loans had been sold were likely to be called in to an investor's service provider to be asked for a proposal on settling the debt.

"Not some of the debt, not what your accountant thinks is enough money for the debt, all of the debt," Mr Devine said.

He said a capital partner could then be sought to provide finance but that "the real problem comes if you cannot find a capital partner and or you don't hit the number the new owner of your loan is looking for".

He said his own business, GDP Capital, had helped borrowers refinance and had been able to work with new capital partners in the UK and USA.

"In 2015 we have been successful in a number of situations in this regard and we anticipate a very active 36 months facilitating people who need new finance partners," Mr Devine said.  

"The starting point is always to educate yourself around the process and then you can progress matters."

Belfast Telegraph