Mortgagee was helped by DFP to minimise losses on a subdivision

Mortgagee was helped by DFP to minimise losses on a subdivision

Mortgagee was helped by DFP to minimise losses on a Residential Subdivision Central Coast, NSW

Issues

  • Market deterioration voided inherent DA value
  • Client no longer able to service the $5m+ debt
  • Client proceeded to force sale
  • Attempts to sell at Mortgagee’s reserve were unsuccessful
  • Mortgagee’s attempts to call on personal guarantees resulted in counter claims, leading to protracted legal dispute

Development Finance Partner’s scope

  • Complete a ‘highest and best use’ assessment
  • Complete a detailed project feasibility
  • Assess and compare the market for sale of the site as-is versus completing the development
  • Negotiate with the Mortgagee on behalf of Client
  • Structure alternative funding if appropriate

Results

  • No development of any sort deemed feasible in the current market
  • True market value determined to be significantly less than the outstanding debt
  • 60% reduction in face value of the debt
    • Client taking Caveat to recover any future sale profits
    • Client discontinued formal proceedings against Mortgagee

Although Mortgagee crystalised a loss, they considered the outcome a commercially reasonable success.

Contact us to see how we can turn your plans into reality.

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