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
- 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
- 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.
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