buksy wrote:If the developer took a mortage on his name (and account) for his project , then he should pay it back to the bank. After all he is still selling the apartments.
This is nonsense (if Im understand good) that a mortage is fixed to a building.
If this is it, and after reading this scary experience (and other similar experiences) its no wonder that sales drop and who is really intrested in buying a sec home or apt will go away to another country.
A mortgage is secured on a property in case the developer in this case cannot pay it back. In the event of a default the lender takes possession of the property under the agreement. If the developer has cunningly managed to sell the place with a mortgage secured on it, (and no one either checked or asked the questions) then he did well, but the building still has the mortgaged fixed to it.
The lender is giving an option to avoid repossession - so they seem reasonable.
It looks like they will have to pay up, and challenge later through court. The chances of this being resolved favourably are very slim in my opinion. Likely a solicitor 'connected' to the developer was used. If the first bit of what Gimlet wrote is correct then it would seem the buyers are at fault for not specifically in writing asking these questions and obtaining a check preferably by their own solicitor.