After a woman was offered to take out a mortgage loan of six million at a bank without the bank demanding sufficient security, the woman now suits the bank. She is currently unable to pay interest and repayments on the loan and in the lawsuit she states that she considers that the bank acted wrongly as it did not secure her collateral for the loan before she signed the loan agreement. Read the full news here at Snowball.
Should be impossible to borrow six million without adequate collateral
The two most common types of loans in Sweden are mortgages and private loans. The main difference between these is that a real mortgage is required for a mortgage – a mortgage in the home itself – while for a private loan you can borrow money without collateral. Admittedly, for a private loan, the borrower must meet certain conditions, for example, that he or she must be at least 18 years of age, have an income above a certain level and that he or she should not have any payment notes (exceptions exist), but no physical security the borrower has no claim.
The other thing that distinguishes these two loan forms is the sum. It is not possible to borrow more than $ 400,000 in the form of a private loan, while there is really no upper limit for a mortgage loan (except that the loan-to-value ratio cannot of course exceed 100% of the value of the home).
In the present case, the woman took out a mortgage loan of $ 6 million with the home as collateral. The problem was that the bank’s collateral in the home through mortgage deeds did not correspond to the loan amount on long roads. In practice, the woman was thus granted a private loan of an amount that far exceeds the maximum limit ($ 400,000), at the same time as the interest rate was set according to the mortgage rate.
Higher interest rates became unsustainable
The interest rate on the mortgage was very modest 1.5% at the time of signing the loan agreement. With this interest rate, the woman’s interest costs per year initially amounted to $ 90,000. The interest rate then crept up to 3.75% and interest costs then rose to $ 225,000 per year. This situation became untenable for the woman, which is why she has chosen to sue the bank.
The woman believes that the bank’s actions have been “unprofessional” and that the bank would never have granted her the loan. In the lawsuit, she believes that the loan should not be considered valid at all. The bank has in turn sued the woman for missing payments.
Which bank it is not stated in the report in the newspaper Barometern, which was first released with the news, but it seems clear that it is a smaller bank in eastern Smaland.