A real estate developer who took out a bridging loan in 2019 recovered £ 8,200 in interest and improperly charged loan fees thanks to the Yorkshire secured loan audit.
The company, which checks business loans and mortgages for any mismanagement that could result in a refund to the borrower, was instructed by the client to conduct a specialized business finance audit.
Through the use of custom software and a review of the loan documents, several problems were identified with the way the lender was servicing the loan, revealing that the borrower was overcharged for fees and interest.
Michael May, founder of Secured loan audit He commented: “Being able to get this client the money he deserves, especially during such a difficult time for businesses, is the only reason I set up the Secured Loan Audit.
“There have been too many horror stories over the years of banks treating customers badly and much of the trust between lenders and borrowers was broken or at least eroded.
“When banks regulated themselves, some behaved in a way that served their own interests and not the interests of their clients.
“Even though most lenders are regulated by the Financial Conduct Authority (FCA), there are still areas of concern that clients may not recognize.
“In the commercial finance arena, lenders have fewer regulations, leaving the borrower with a less robust vehicle to challenge their lender. This particular case shows to what extent this is a problem. “
Michael May, a seasoned data analyst, set out on a mission to save business borrowers money and ensure fairness when he founded Secured Lending Auditing in 2020.
Their process involves helping commercial borrowers claim their due money by checking commercial loans and mortgages for areas of mismanagement by the lender that effectively represent a breach of contract.
Loans must be commercial in nature and “current” or paid off within the last 15 years.
In this case, the loan was obtained in 2019 and originally for a period of 10 months, but due to COVID-19 and the lockdown, the term was extended with an extension fee agreed before the extension agreement.
The borrower, who chose to remain anonymous, approached the Secured Loan Audit after the lender’s managing director failed to provide a clear explanation on the basis of the fees charged and the interest charged over the term of the loan.
The client had approached the lender numerous times for this explanation, as had the broker involved in processing the loan, but this request was also ignored.
Within 28 days of the Secured Loan Audit presenting the claim details to the lender, the offer to settle was received and the client received the funds the next day.
Michael added: “In this particular case, the documents had been reviewed in detail and the claim was presented to the lender with evidence of our calculations.
“Generally, lenders have a complaint policy that details their process for handling a ‘complaint’ and this lender stated 28 days to reach a resolution; the settlement offer was made within this time period.
“The lender claimed that some elements of the claim were unfounded, but I asked them to provide details of the clauses that they claimed would refute the claim.
“As the lender’s agreement was not strong, no evidence was provided and the settlement offer was made within days of this conversation.”
May added that while FCA-regulated lenders operated to the highest standards, the same was not necessarily true for those who weren’t regulated.
“Without this obligation, there is often a lack of investment in internal compliance, auditing and infrastructure, and mistakes can be made that go unnoticed, perhaps during the life of the loan or mortgage.” he said.
“I want to help borrowers and level the playing field, and if unregulated lenders know that we are here and conducting independent audits, this may encourage them to take a closer look at their products and ensure that they treat their customers fairly. customers”.