My commercial building-bofa special assets group extortion!

[hany]

What is the name of your state (california)?
Hello,
I may have posted this in another forum by mistake, I believe this is the correct one. Sorry
.Anyone heard of BofA's "special assets group"? I own a commercial building that I purchased for 2.2M in 2007. I put over 450K down. I owned a business and occupied the building for over 14 months after I purchased it. For health reasons I had to sell my business. I notified my rep at BofA in writing via email. In fact I had him also open the bank account just to deposit the rent checks in! He never objected to us selling the business and leasing out the building. 2.5 years pass, my tenant is paying us on time (thank GOD) and out of the blue my rep emails me that my note has been assigned to special assets group. Apparantly since I no longer occupy and own the business blah blah blah that they have issues and may call the note. Knowing very well that there is no way for my wife and I to get financing elsewhere! The rep at SAG tells me that my old rep does not contest the emails (because he cant) and that is a problem for BofA...so why mess with us? We did notify them. And had they told us otherwise we never would have entered into a 10 year lease! Not to mention we would have used the money we had at the time to pay down the loan...instead we did what anyone would have and used it for other investments. Now we risk the tenant suing us, and not to mention this same tenant is the same person that bought our business. He still pays us on the note for the business...and I am sure if he is outed from the builiding it will affect how he can pay us on the note as well!. All this because my rep (a VP) at bofa did NOT do his job 3 years ago and reply by telling me I cant do it! And like I said he not only did NOT do that, he even opened up an account for us under the corp we formed to collect rent on! He even had his co workers come to our place and meet the new tenant and business owner to make sure they continue getting the Credit card merchant business...So there is no way to doubt they knew. Can anyone tell me if I have a lawsuit here if they call the note or try and extort more money from us. Yes he mentioned they may ask for more money even tough we put down over 20%! Several lawyers told me can sue based on the fact that BofA knew 3 years ago and can not come back now and distrupt things!
Thanks

 

[FlyingRon]

You should have gotten a consent to lease under the original mortgage, but I agree (and evidently BofA does as well) that their actions indicate they did approve of such.

Have the actually asked to change the terms or called the loan yet? It seems unclear why they would do so when the mortgage is current and they're assertions of the violation is on shaky footing? Just because things were transferred to a SAG for investigation doesn't mean they will proceed.

 

[Antigone*]

What is the name of your state (california)?
Hello,
I may have posted this in another forum by mistake, I believe this is the correct one. Sorry
.Anyone heard of BofA's "special assets group"? I own a commercial building that I purchased for 2.2M in 2007. I put over 450K down. I owned a business and occupied the building for over 14 months after I purchased it. For health reasons I had to sell my business. I notified my rep at BofA in writing via email. In fact I had him also open the bank account just to deposit the rent checks in! He never objected to us selling the business and leasing out the building. 2.5 years pass, my tenant is paying us on time (thank GOD) and out of the blue my rep emails me that my note has been assigned to special assets group. Apparantly since I no longer occupy and own the business blah blah blah that they have issues and may call the note. Knowing very well that there is no way for my wife and I to get financing elsewhere! The rep at SAG tells me that my old rep does not contest the emails (because he cant) and that is a problem for BofA...so why mess with us? We did notify them. And had they told us otherwise we never would have entered into a 10 year lease! Not to mention we would have used the money we had at the time to pay down the loan...instead we did what anyone would have and used it for other investments. Now we risk the tenant suing us, and not to mention this same tenant is the same person that bought our business. He still pays us on the note for the business...and I am sure if he is outed from the builiding it will affect how he can pay us on the note as well!. All this because my rep (a VP) at bofa did NOT do his job 3 years ago and reply by telling me I cant do it! And like I said he not only did NOT do that, he even opened up an account for us under the corp we formed to collect rent on! He even had his co workers come to our place and meet the new tenant and business owner to make sure they continue getting the Credit card merchant business...So there is no way to doubt they knew. Can anyone tell me if I have a lawsuit here if they call the note or try and extort more money from us. Yes he mentioned they may ask for more money even tough we put down over 20%! Several lawyers told me can sue based on the fact that BofA knew 3 years ago and can not come back now and distrupt things!
Thanks

You should have reviewed your loan documents prior to leasing out the building. It is not your banker's job to make sure you were violating any of the convenants in your loan.

It appears to me that their special assets group must be brought in whenever their are loan convenant violations. It is hard to know what the straegy should be without knowing the particulars of your loan and the note.

Certainly had you not taken the money paid to you and "invested" it elsewhere instead of paying down your note you'd be in a better position. I'm sure you could have prepaid some or all of your debt without a prepay.

Suing is not going to help, but if you want to throw money at an attorney who can help you sue "the big bad bank" have at it.

 

[hany]

With all due respect I disagree...they assign you a rep for a reason. This rep is also a VP by the way. And I did notify them of my intent to sell & lease...things do change in life and I did occupy for 14 months. His job was to do is job and say ..."well you do realize you cant do that"....and he did not...he even PERSONALLY opened an account for us to deposit the rent. So I believe your correct it was my job to read the terms...which I did thats why I contacted my assigned rep. Had he said NO I would not have done it, I would have paid the loan down or sold it or even re fi....at that time I had those options. But NOW based on the market I cant re fi or sell it...I also would not have engaged in a 10 year lease and rick the tenant suing me. He has paid me on time for 2.5 years and I have paid bofa on time for 3.5 years... I am not a lawer but clearly they are at fault, I did my job and asked for permisiion...it was NOT denied...but 2.5 years later , specially when the market is not there they NOW have an issue..I dont think its fair or even legal...
thanks

 

[FlyingRon]

This rep is also a VP by the way.

That's the way banks are. EVERYBODY is a VP. Your average branch will have half a dozen. It doesn't mean they are the #2 person in the company.

And I did notify them of my intent to sell & lease...things do change in life and I did occupy for 14 months. His job was to do is job and say ..."well you do realize you cant do that"....

What gives you the delusion that he has that responsibility?

and he did not...he even PERSONALLY opened an account for us to deposit the rent.

This and the other actions with respect to the tenant is more telling. This indicates an intentional acquiescence on their parts to the rental.

I am not a lawer but clearly they are at fault, I did my job and asked for permisiion...it was NOT denied...but 2.5 years later , specially when the market is not there they NOW have an issue..I dont think its fair or even legal...
thanks

Nothing that has happened so far is "illegal." Until they make some action to call the loan or otherwise act under the assumption you are in breach of the terms, there's nothing "unfair" or "illegal" to deal with.
Banks make your life difficult as a borrower all the time even when you play 100% by the rules. Unfortunately, being jerks isn't actionable.

 

[Antigone*]

It doesn't mean they are the #2 person in the company.

Hey what do you mean I'm not.​