Releasing sections held as security after sub-division

[EGU 591]

Thanks in advance for any constructive advice.

I won't go into the history but one way and another we have survived the last 5 years, a year ago we just scraped through to refinance away from an 8.95% floating rate to a main stream bank so now we have a new lease on life.
To refinance, it took all the assets we had as security,as of early this year a sub-division of a block of land held as security was completed and as a result the value doubled, we contacted the bank to apply to have some of the sections released, after jumping through the hoops the bank has offered to lend us more $$$ but will not release any sections unless we can present proof of an offer to buy a section or a sale and purchase agreement.
Although the $$ would do a lot of good we would much rather have the sections released from the mortgage.

What are our options?

[Ivan McIntosh]

Probably your best option, if they refuse to play ball, is to refinance with someone else over fewer sections. The fact they would lend more says the security is more than adequate for the existing loan. Banks do hate releasing security "just in case". It's easier sometimes to refinance and not offer some of the sections to the new lender in the first place.

Is your bank saying they won't release except to settle a sale (and will then take the proceeds)? Or are they saying they won't release other sections unless there is the prospect of cash coming in the near-ish future as a result of the sale of sections with agreements on them?

[EGU 591]

Our problem is that the land in Question is Maori Land although its owned solely by my partner, not many institutions will loan on Maori Land [50% seems to be the going rate]so we were grateful to get that, since the revaluation the ratio has dropped to 25%.

The sections in Question can only be easily on sold family members or shareholders in the parent block so we were hoping to free up a couple of the sections to gift to her daughters which they could then use as security for their own mortgages. Their has been some interest from a small shareholder in the parent block who is looking to build locally