Mortgage recovery services
Case study 1
We acted for a lender in a claim against a negligent valuer. Our client obtained a valuation which gave the proposed security, a hotel and leisure development, a market value of £2.15 million in its existing condition. The valuation report confirmed the property was good security for the proposed loan. A loan of £1.5 million was granted. Subsequently the borrower defaulted. The Property was taken into possession and sold with a resulting shortfall of £850,000. We obtained an expert retrospective valuation which confirmed property was overvalued by £900,000, and thus outside the bracket of reasonable opinions.
Court proceedings were issued and the claim was strongly defended. The case was particularly complex due to the number of different elements that made up the original valuation. The key issue in this case was the methodology adopted by the valuer to arrive at his figures, and whether errors in many parts of the valuation were counterbalanced by other parts of the valuation and thus whether the overall valuation was still acceptable. The Defendant valuers took a very bullish approach which meant settlement was difficult. However following exchange of expert evidence we persuaded the Defendant valuers to enter into settlement negotiations and we were able to negotiate an excellent settlement of damages and costs.
Case study 2
We acted a for a high street lender in a negligence claim against their conveyancing solicitors. Following default by the borrower the property was repossessed and sold with a large resulting shortfall. We were instructed to investigate the loan transaction. Upon reviewing the Solicitor's file it was apparent that the Solicitors had not only been negligent but also fraudulent. A claim was brought against the solicitors and was defended by the Solicitors' insurers. The key allegations against the Solicitors were that they failed to advise the lender that the true purchase price was not as reported, that there was an allowance from the vendor in the sale contract, the borrower did not provide any funds towards the transaction, the Solicitors received and paid out significant sums to third parties who had no connection with the transaction, they failed to comply with Money Laundering Regulations and they did not write to the borrower until 3 months after completion etc. This was a mortgage fraud ring.
Once we received the Solicitor's letter of response we were able to reach a swift settlement whereby the lender client obtained its recoverable damages in full plus costs.