Mortgage worry! fraud?

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booboo
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Postby booboo » Fri Oct 14, 2011 8:21 am

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 :lol: 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.

:idea: :idea:

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kazz
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Postby kazz » Fri Oct 14, 2011 8:27 am

I think you'll find that the mortgage is fixed to the building in the UK too.... the difference is that you have a conveyancer/solicitor who sets up all the transfer of funds from one place to another to ensure the mortgage is paid off.

It's a case of having to know how things work in one country or another.

I'm interested that Gimlet doesn't think that checking on debts falls within the area of responsability of the notary as I thought it did....mainlly because we've never had a notary who would allow a deal to go through without seeing the certificate of 'no weights'.

I take the point that sales do go ahead with mortgages still attached on a daily basis; the crucial point there is if the buyer KNOWS!!!

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Postby buksy » Fri Oct 14, 2011 8:41 am

The bank should seek the developer to re pay his debts, as originally it was with him that they have negotiated the mortage. And the bank should repossess the apts that were not sold or other further possessions in the developers' name.

At least this is what normally happens in European countries, and if Im not mistaken Bulgaria is in the eu now. Laws should be the same in all eu countries.

If what u said is the latest trend in the real estate in Bulgaria, then its going to scare away new investors/ buyers. Im sure there will be safer countries from where to buy apts, homes and other properties.

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owain
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Postby owain » Fri Oct 14, 2011 8:44 am

There was one well advertised case here last Year:
http://www.novinite.com/view_news.php?id=114849
The banks will negotiate payments from buyers of the apartments, especially at this time.

I'm afraid when buying property in Bulgaria, it's the responsibility of the buyer to make sure there are no incumberances, not the seller or the Notary. As far as the Notary is concerned you may be buying the debt.
It doesn't take more than half hour to make the relevant checks, any new buyers should make this a priority. These checks should also be done as close to the Final signing as possible, on the day or 1 day before.
As I said in an earlier post, there is a Register Agency in every Local Court and they will have this information which will be printed out and stamped for a small fee or you can use the online service which is a little more expensive:http://www.registryagency.bg/

Don't cut corners in Bulgaria, the responsibility to make the relevant property checks and incumberance checks is on the 'Buyer'. Don't trust the seller/developer. A large percentage of new-builds were financed this way.

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Postby booboo » Fri Oct 14, 2011 8:53 am

buksy wrote:The bank should seek the developer to re pay his debts, as originally it was with him that they have negotiated the mortage. And the bank should repossess the apts that were not sold or other further possessions in the developers' name.

At least this is what normally happens in European countries, and if Im not mistaken Bulgaria is in the eu now. Laws should be the same in all eu countries.
.


But if the building(s) was not offered as security in the first place then the developer would not have got the mortgage. Unless I am very much mistaken that is the whole point of a mortgage. Did I read that it could be as long as 4 years ago that the developer stopped paying. If that is true I would hazard a guess that the lender has spent some time trying to obtain money from him.

That has now hit a dead end and as the properties are the security the lender has EVERY right to attempt repossession. The lender in this case has looked at the situation and seen that these are occupied/owned by a third party. They have made a generous offer to allow the new owners to foot the bill, instead of taking possession.

I would be keen to find out the lenders name, as I may contact them and make an offer to buy one of the apartments at obviously a knocked down price of between 20,000 and 28,000 euro the day they repossess (Bearing in mind that these were originally bought for much more than that). In fact I might have a few. If I think like that then plenty of others will, so it's likely be a matter of pay up the extra or face repossession.

The building is the guarantee, and better to repossess and knock it down to set an example to other developers that they cannot get away with such tactics, even though naive innocents are hurt in the process

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Postby buksy » Fri Oct 14, 2011 9:05 am

Then all of us have to Learn (from this n other similar experiences) and be careful and in fear for buying here, as you won't know what will break your dream/investment in 3-4 years time.

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Postby booboo » Fri Oct 14, 2011 9:20 am

buksy wrote:Then all of us have to Learn (from this n other similar experiences) and be careful and in fear for buying here, as you won't know what will break your dream/investment in 3-4 years time.


OR appoint your own solicitor, ask the specific question in writing AND do the cheap check at the last moment before signing. I think we are talking minutes rather than weeks or months of extra work. Simple and great peace of mind and you can still buy at great prices in one of the most wonderful in Europe.

(Though buying an apartment in the middle of a developed 'resort' you could be in any number of countries as it is not the real Bulgaria - but that is a totally different topic)

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Postby buksy » Fri Oct 14, 2011 9:38 am

And if for some reason you have not checked about pending debt?

Not everyone is an expert on this subject.
Back in 2007 things were moving fast, so maybe one did not have the time to think clear of every procedure and detail.

If people knew all this and other details back in 2007 they would not have bought there, and today they would not be facing such trouble and hassle.
And when i say hassle it can be of all type. It can be with solicitor or real estate or contracts/ papers or like this exp or u find your property have been sold by someone or other misinformation or misguidance.

But thanks for ur advice.

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Postby booboo » Fri Oct 14, 2011 9:53 am

buksy wrote:And if for some reason you have not checked about pending debt?

Not everyone is an expert on this subject.
Back in 2007 things were moving fast, so maybe one did not have the time to think clear of every procedure and detail.

If people knew all this and other details back in 2007 they would not have bought there, and today they would not be facing such trouble and hassle.
And when i say hassle it can be of all type. It can be with solicitor or real estate or contracts/ papers or like this exp or u find your property have been sold by someone or other misinformation or misguidance.

But thanks for ur advice.


Don't get me wrong my friend, I'm only responding to your idea that Bulgaria becomes a place not to buy! I'm not referring to 2007, however you are correct people would not have bought at that complex had they made the relevant checks, or they would have bought in an informed way and could have made a decision based on that, taking a gamble in the way gimlet suggested.

In all probability they would have simply bought a different apartment not having any weights attached at another complex/area within a similar location IN Bulgaria.

If this was common knowledge back in 2007 then this guy would have had to pay off chunks of the mortgage as he sold apartments, effectively releasing them one by one from the mortgage. How feasible that is when it is a block of apartments I don't know, but surely lenders know how to manage such risk. Simply put, otherwise the buyers would not buy, and the whole thing would go belly up, therefore closing this practice pretty much instantly. IMO

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Postby buksy » Fri Oct 14, 2011 11:05 am

Also,
ITS VERY INTRESTING TO KNOW WHICH BANK WAITS 3-4 YEARS TO TAKE FIRST ACTION IF A MORTAGE IS NOT BEING REPAID BY THE PERSON THAT TOOK THE LOAN ( IN THE FIRST PLACE).
Usually it only takes 2 no payments and the bank will start the process to check whats has to be done. And its good way.

Otherwise it will be total chaos and if hard working innocent people start feeling all this hassle, Bulgaria will soon have a bad reputation. Its a very nice place but all this really puts off people from buying especially at this difficult moment.

No one wants to see his efforts,time and money being wasted. After all thats why people trust rea and solicitors and expect from them the true info.

Thanks for ur time and answers


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