Mortgage Express appoint LPA Recievers Walker Singleton to scare tenants off!

[patrickq1]

was there an existing mortgage and had you made any contribution to it, i ask this because as even a houswife you are still entitled to your half of the property, so this is a fight worth taking on

patrickq1

[JonCris]

If this nonsense is implimented lenders will 1st be allowed to ensure a borrower has mental capacity:( & how is this achieved? by accessing your medical records of course:-x

 

Governments of all colours seem intent on denying us a right of privacy

[patrickq1]

may be nonsense jon but would save a lot of greif in the long run and lets not forget experian have already got access to a lot of data we are unaware of, such as their use of phorm and also their goverment contracts will open up the flood gates and info sold to the highest bidder so god help those who are ill cause insurance will be almost impossible,and also their is the hidden iformation group who deal with experian and banks and goverment this is the insurance fraud data bank which they all contribute to

diddled you have a case where the spouse is entitled to 50% of the home less deductions, who maintained the family home ? who looked after the finance of paying the domestic bills ? who cared for the kids ? all this counts and it is an arguement that needs to be fought as you have not signed your entitlement to half of the property regardless of the deed signed by your husband , the banks must have been aware of your excistance and had not sought your assurance that you would not have a claim to the property, was their a mortgage or was it outright ownership, and if mortgaged did you continue with the payments towards the mortgage, and if you still have children in education upto uni then they cannot make you sell nor make any such demands against you ..

patrickq1

[patrickq1]

you need to start a seperate thread diddled

[chillinlong]

Hi All,

 

Had a really long chat with the MX contact this week, they are really great at how they think. Complete fools and naive and no wonder our banks are going crazy and losing money left right and centre for us.

 

Apparently the government want to get their money in ASAP! they dont care if they make a loss of 50% on a property as long as they get it back! They try to show that they have a fair customer rule, but it is frankly B******t! They have been told to be as uncoperative and they talk a load of rubbish.

 

They are trying to sell some of my props, because they are making a small loss. WS dont have the balls to let me know as usual but what they do is rack up loads of bills and still cock it up and turn round and then say we dont know what to do apart from sell it. Even though it may only recieve 50% back.

 

My head is spinning here, I know loads of info but ICO or the FSA are not helping, what the hell they do. MX and WS have held info from me and they are making this delibertaly worse by not communicating to resolve like other lenders have done with me. MX dont want to give their properties back but at the same time they dont want to make this obvious. I would rather they take me to court for interfering and then I will produce all my evidence and request all their paperworks to prove it and it will make them look even worse. I hope they really do take me to court as I will relish getting a chance to have a go finally.

 

Anyways, back to the books and work on the action plan. Anybody else getting any luck with anything yet?

[patrickq1]

no they have this power of attorney, but that is suspect in its own, so they are chancing their arm and hoping silence will be the order of the day...

the FSA AND FOS know everything thats gone on here and will not act, possible to SAR the FSA AND FOS concerning the dates that piglan had been asking about, if you come on thread piglan let me know the dates again i will start digging some more ,

patrickq1

[patrickq1]

find out what properties they are trying to sell and if its through auction get onto the land authority and put forward an objection to the sale

when you find out what properties they are selling go down to the court house and take out an injunction against WS to cease and desist until you get all the information you have requested in your SAR to them and this way the judge can then order instructions against WS to bring forward all the requested Data...

now is the time you need to start your cpr31.15 to MX this will not be regarded as a fishing trip because they have already actioned against you and it is now a need to know, in your cpr it must include all data including letter and instructions that was possibly given to them by MR DARLING

i will search around you also need your MP to ask this question in Hansard and in the Commons especially if you can get a miffed labour MP or a LIBDEM who has had there nose knocked out of joint lol start making waves big waves

patrickq1

[chillinlong]

Looks like WS are now panicking and trying to serve an injunction on me to prevent me doing anything to it and have alrerady instructed their solicitor. The MX manager has really tried to stir the problems up and am now wondering whether they have something to hide.

[diddled]

Chilling, Ive sent you a CPR template letter

[patrickq1]

well now is your chance to get your requested information,chilli, look at the cpr 31.15 send them this along with the second sar,,

some good reading on here its a long one but very intresting

patrickq1

PART IX MORTGAGES

 

Reading:

 

Smith, Chapter 22.

 

A. Introduction - nature and types of mortgages and methods of creation

 

What is a mortgage and what are its functions? What types of mortgages can exist and how are they created?

 

Law of Property Act 1925, ss.86, 87

Land Registration Act 2002, s.27

Law of Property (Miscellaneous Provisions) Act 1989, s.2.

United Bank of Kuwait plc v Sahib [1997] Ch 107

 

B. Undue influence and misrepresentation

 

In recent times an acute problem has emerged as a result of many property owners mortgaging their family home as a security for a business loan. A typical form in which the problem presents itself is where a husband (or his company) borrows money on the security of the home and procures his wife's signature to the mortgage of that home. (She might be a sole or joint owner/mortgagor). The husband’s business then fails and the mortgagee seeks possession with a view to sale of the property. The wife then argues that she was a victim of misrepresentation or undue influence when she agreed to the mortgage and that she can set aside the mortgage as against the mortgagee. An alternative scenario is that the husband is the sole legal owner/mortgagor and his wife has agreed with the lender to postpone the priority of any equitable interest that she might have in the property. She then later argues that her consent was improperly obtained. In each of the above scenarios the mortgagee will not be able to look to the property, or as the case may be the wife’s share, to satisfy the mortgage debt.

 

For the sake of convenience the word “surety” will be used below to refer to the victim in each of these cases.

 

[Note that although the borrower is usually the husband this is not always the case: see Barclays Bank plc v Rivett (1997) 29 HLR 893].

 

What is undue influence? It is a vitiating factor whereby equity decides that a person’s consent to a transaction ought not fairly to be treated as that person’s will.

 

So how is its presence established?

 

It was stated in Barclays Bank v. O'Brien [1993] 4 All ER 417 HL that undue influence could arise in two types of cases. Class 1 was a case of actual overt acts of wrongdoing having been proved independent of the relationship between the parties. Class 2 covered cases of presumed undue influence; i.e. where there was no proof of any specific overt acts of persuasion but where undue influence would be presumed to have been exercised unless the person in the privileged position proves that undue influence was not exercised. This was divided into two categories. Class 2A was where the relationship was one of a number of relationships where the law imposes fiduciary duties on the more dominant party towards the other (because the latter is disposed to agree with the actions proposed by the former); e.g. solicitor/client; doctor/patient (BUT NOT HUSBAND AND WIFE). Class 2B covered other relationships where it could be proved that one person had actually placed trust and confidence in the other and the transaction was not on the face advantageous to the former. In both instances undue influence would be presumed to have occurred unless the dominant partner could prove that it had not.

 

The House of Lords, in Royal Bank of Scotland v Etridge (No 2) [2001] 4 All ER 449 has sought to clarify the position with regard to this classification. In Class 2A cases the law presumes irrebuttably that the particular relationship was one of trust and confidence and if there are benefits that are not to be expected undue influence will be presumed to have been established in the absence of evidence to the contrary.

 

By contrast it was considered in Etridge that Class 2B was not helpful. The true explanation in such cases is that if the complainant has placed trust and confidence in the other party in relation to the management of the complainant’s affairs and this is coupled with a transaction which calls for explanation – i.e. a transaction that is not to be reasonably accounted for in the circumstances – then that simply switches the evidential onus of proof to the other side. It does not establish an artificial presumption that undue influence must have occurred. The claimant still has the general burden of establishing undue influence albeit that this may be discharged on the balance of probabilities.

 

The problem however in the mortgage cases is that the surety is seeking to have the transaction set aside against the lender. Thus the lender had to be shown to be responsible. In Barclays Bank v. O'Brien (above) it was held that the surety would be able to set aside the mortgage against the lender if the mortgagee had actual or constructive “notice” of the surety’s rights. The lender would have constructive notice, thus making him directly responsible for any misrepresentation or undue influence by the borrower, unless he took reasonable steps to satisfy himself that the surety’s agreement had been properly obtained.

 

Post O-Brien there was a plethora of case law, some involving pre-O’Brien transactions and others post-O’Brien, as to when the lender would be put on “notice”. In reality however this analogy with property law concepts of “notice” is a misleading analysis. Prior to the mortgage there is no transaction to set aside as against the lender and therefore nothing of which he could have notice! This difficulty culminated in the whole issue being revisited by the House of Lords in Etridge (No 2) where it was held that it is not a question of the lender having notice of some pre-existing wrong committed by the dominant party on the weaker party. The true analysis is that for the contract between the lender and the surety to be valid the lender must take certain steps to seek to ensure that the surety was fully aware of the risks involved in the transaction and that s/he only entered into it after taking independent advice. In other words to ensure that the risk of undue influence/misrepresentation was obviated. When must these precautions be taken? The answer is whenever a wife offers to stand surety for her husband’s debts. Indeed the House of Lords held that this rule applies not just to spouses but to every case where the relationship between the surety and the debtor is non-commercial, or where a private individual offers his or her property as security for another’s debts. (See further Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144 and Steeples v Lea [1998] 1 FLR 138.)

 

But note that, exceptionally, when the loan is made to a couple jointly the lender is not put under such an obligation (CICB Mortgages plc v Pitt [1994] 1 AC 200) unless aware that the loan is made simply for the husband’s purposes as opposed to their joint purchase (as in Allied Irish Bank plc v. Byrne [1995] 2 FLR 325). The Pitt exception will not apply where the loan is made to a company where the wife is a director or shareholder of the company.

What steps should the bank take?

 

For pre-O’Brien transactions it was held in that case that the issue is one of whether the lender has taken reasonable steps to bring home to the surety the risks involved and has recommended that independent advice be sought. Where the lender had knowledge of further facts, which rendered the presence of undue influence probable the lender, should ideally have insisted on separate legal advice. But it us up to the surety as to whether to act on that advice.

 

It was suggested in O’Brien that to protect themselves after that decision mortgagees ideally should insist on a separate meeting with the surety at which that person is advised as to the nature and extent of the liability under the mortgage and urged to take independent legal advice. It was also said that, exceptionally, where the lender has knowledge of further facts, which render the presence of undue influence probable the lender should ideally insist on separate legal advice. (In practice lenders have not had private meetings with the wife but have instead continued to insist on independent legal advice and confirmation of this in writing in all cases. See e.g. Massey v Midland Bank plc [1995] 1 All ER 929 where the mortgagee was not bound by a man's misrepresentation to his cohabitant who then charged the house as a security for a loan to her lover's company. The bank had urged her (albeit not at a meeting with her alone) to take independent legal advice. She had then taken advice from the company's solicitor in the presence of her lover and the solicitor had then assured the bank that he had explained the charge to her.

 

This practice has been endorsed by the House of Lords in Etridge (No 2)) where the content of that advice was spelled out for solicitors.

 

Thus the Bank must (a) deal directly with the wife and only after having received an appropriate response from her and (b) provide her solicitor with sufficient financial information to allow the wife to receive a proper explanation. Does the solicitor need to act for the wife alone? No, provided that the solicitor is satisfied that this is in the wife’s best interests and also that this will not give rise to any conflicts of duty or interest. (See for example Scottish Equitable Life plc v Virdee [1999] 1 FLR 863 and Halifax Mortgage Services Ltd v Stepsky [1996] Ch 207) and Midland Bank v Serter [1995] 1 All ER 936). If a conflict of interest is likely he or she must cease to act for the wife.

 

Suppose the solicitor gave improper advice? Is the bank tainted? Not unless it knows of the circumstances or if it knows facts from which it ought to have realised that this was the case. If the bank suspects undue influence has been exercised it must inform the wife’s solicitor of the facts; otherwise it will be fixed with knowledge of any impropriety.

 

What confirmation is required from the solicitor?

 

For past transactions it will suffice for the solicitor acting for the wife to have given the lender confirmation to the effect that s/he had brought home to the wife the risks she was running as standing as surety. For the future more stringent requirements have been laid down. (See law report for details. The gist is that the solicitor must explain the transaction).

 

If the surety is able to set the transaction aside she will be able to do so in its entirety (see TSB plc v Camfield [1995] 1 WLR 430) unless she has received some advantage in which case she will have to account for that advantage (see Dunbar Bank plc v Nadeem [1998] 3 All ER 876 CA).

 

For comment on Etridge (No. 2): see further

R.Bigwood (2002) 65 MLR 435

M.Oldham [2002] CLJ 29

M.P.Thompson [2002] Conv. 174

P.Watts (2002) 118 LQR 337

 

C. Position and Rights of the Mortgagor - Protecting the Equity of Redemption:

 

1. "Once a mortgage, always a mortgage"

 

· Attempted exclusion of the right to redeem

 

Samuel v Jarrah [1904] AC 323 (a mortgagee's option to buy the mortgaged property is unenforceable but not if it is part of a separate transaction (see Reeve v Lisle

[1902] AC 461 and Jones v Morgan [2002] 1 EGLR 125. For what amounts to a separate transaction see also Lewis v Frank Love Ltd [1961] 1 WLR 261).

 

· Postponement of redemption

 

Knightsbridge Estates v Byrne [1939] Ch. 441 (fairly bargained agreement to postpone for 40 years not void). (But see Fairclough v Swan Brewery [1912] AC 565

where an attempt to prevent redemption of the mortgage of a lease until the lease had

nearly expired was not enforceable on the basis that it rendered the equity of redemption illusory. cf Santley v Wilde [1899] 2 Ch 474).

 

 

2. No "clogs or fetters" on the equity of redemption

 

Biggs v. Hoddinott [1898] 2 Ch 307 (5 year solus tie to mortgagee brewer held enforceable). But not enforceable after redemption (Noakes & Co. Ltd v. Rice [1902] AC 24 and Bradley v. Carritt [1903] AC 253).

 

But this does not strike down collateral advantages independent of the mortgage. (See

Kreglinger v. New Patagonia Meat and Cold Storage Co. [1914] AC 25 where a right

of pre-emption over the mortgaged property was upheld as enforceable after redemption). See also Re Petrol Filling Station, Vauxhall Bridge Road, London (1969) 20 P&CR 1.

 

3. Restraint of trade:

 

Esso Petroleum v. Harper's Garage [1965] AC 269 (restraint of trade doctrine applicable to mortgages. Solus tie for 21 years struck down but not one for 5 years. However it may be possible to sever an unlawful tie from the mortgage (Alex Lobb Garages v. Total Oil [1985] 1 All ER 303).

 

4. Interest rates:

 

Cityland and Property (Holdings) Ltd v Dabrah [1967] 2 All ER 489 (oppressive and unconscionable terms including those relating to interest rates can be struck down). Test is not one of reasonableness. (Multiservice Bookbinding Ltd v Marden [1978] 2 All ER 489, where a freely negotiated agreement between two business men was upheld even though the annual interest equivalent was 33% when repayment was linked with changes in the exchange rate between the pound and the Swiss Franc).

 

(See further Nationwide Building Soc. v Registry of Friendly Societies [1983] 1 WLR 1226).

 

· Extortionate credit bargains

 

ss. 137-140 Consumer Credit Act 1974 (power to reopen such bargains if payments are exorbitant or the terms otherwise grossly contravene ordinary principles of fair dealing).

 

Davies v. Directloans [1986] 2 All ER 783 (rate of 21.6% over 10 years upheld in the circumstances).

 

Ketley v. Scott [1981] ICR 241 (APR of 48% for a three month loan upheld).

 

D. Position and Rights of the Mortgagee

 

1. Investigation of title and interests behind trusts

 

Equitable interests of beneficiaries behind trusts for sale. This was covered earlier in the course. See, inter alia, King's North Trust v. Tizard (1986); Williams & Glyn's Bank v. Boland (1980); City of London B. Soc. v. Flegg (1987) [HL]; Bristol & West B. Soc. v Henning (1985); Paddington Building Soc v Mendelsohn (1985) Equity and Law Homes Ltd v. Prestidge (1992).

 

NB: Registered and unregistered land: Remember that a mortgagee who lends money to enable a property to be acquired will take free of any interest of a person who with knowledge of the mortgage goes into occupation before completion. That person will be deemed to have agreed to postpone the priority of his or her interest to that of the mortgagee. (Henning and Mendelsohn above). Furthermore, if there is such implied consent, a later mortgage that replaces the original loan (even if the occupier did not know about the later loan) will also defeat the occupier. If the loan is for a greater amount it will not defeat him/her in so far as the excess is concerned. (Prestidge above).

 

2. Mortgagee's rights and remedies

 

(a) Deposit of title deeds

 

s.85 (1) LPA 1925

s.65 LRA 1925

 

(b) Action on the mortgagor's personal covenant to repay

 

Alliance & Leicester plc v Slayford and Another [2001] 1 All ER 1

Bristol and West plc v Bartlett [2002] 4 All ER 544 CA

 

© Entry into possession

 

Four-Maids Ltd v. Dudley Marshall Properties [1957] Ch. 317 and Western Bank v. Schindler [1976] 2 All ER 393 (right arises immediately. But note that it is frequently postponed by the express or implied terms of the mortgage).

 

For need of good faith see Quennel v Maltby [1979] 1 WLR 318 and Albany Homes Ltd v Massey [1997] 2 All ER 609

 

For the inherent power of the court to postpone possession see Cheltenham & Gloucester plc v. Booker (1996) 73 P. & C.R. 412.

 

 

· Statutory discretion

 

s. 36 Administration of Justice Act 1970 (power to adjourn proceedings or suspend or postpone execution of a possession order where the property consists of or includes a dwelling-house if "it appears to the court that in the event of exercising the power the mortgagor is likely to be able within a reasonable period to pay any sums due under the mortgage or to remedy a default").

 

Halifax B. Soc. v. Clark [1973] Ch. 307 (this means the whole sum if the mortgage provides that default means the whole loan becomes immediately repayable).

 

As a result it was provided that s.36 should only apply to the arrears and not the amount that becomes payable on default (see s.8 Administration of Justice Act 1973).

 

Centrax Trustees Ltd v. Ross [1979] 2 All ER 952 (s.8 applicable to a mortgage for 6 months with no provision for repayment by instalments or endowment policy). And also to an endowment mortgage (Bank of Scotland v. Grimes [1985] QB 1179).

 

But a mortgage to secure a bank overdraft is outside the section (Habib Bank Ltd v. Tailor [1982] 1 WLR 1218).

 

In one unusual case the legislation was held to be applicable (although not exercised on the facts) even though there were (because the mortgage was defectively drafted) technically no arrears when the mortgagee sought possession (Western Bank v. Schindler (above)).

 

BUT the discretion is not available where the mortgagee takes possession without a court order: Ropaigealach v Barclays Bank plc [1999] 4 All ER 235 CA

 

Over what period will the court consider it reasonable for the arrears to be paid off? It has been held that it is permissible to postpone payment until the end of the mortgage (Cheltenham & Gloucester B.S. v. Norgan [1996] 1 All ER 449 CA). But it must be possible to pay the current payments and the arrears (First National Bank plc v. Syed [1991] 2 All ER 250).

 

Will the court postpone possession to enable the mortgagor to sell (see below as to court's power to order a sale by the mortgagor) on the basis that he would thereby be "likely to be able within a reasonable period to pay any sums due"?

 

The answer is yes if the facts support such a conclusion. (National and Provincial BS v. Lloyd [1996] 1 All ER 630 CA. See also Bristol & West BS v. Ellis (1996) 73 P. & C.R 158 CA).

 

Note also that the court has jurisdiction to order a sale under s.91 LPA in an action for foreclosure, redemption or sale. The mortgagor may make such an application. (For an unusual case where the house was worth less than the debt and the court ordered a sale (the mortgagee wanted to defer any sale) see Palk v. Mortgages Services Funding Plc. [1993] Ch 330. see also Polonski v Lloyds Bank Mortgages Ltd [1998] 1 F.L.R. 896.

 

But a sale will not normally be entrusted to the mortgagor where the sale would not discharge the mortgage debt (per Millett LJ in Cheltenham and Gloucester plc v. Krausz and Another [1997] 1 All ER 21 CA doubting the decision to the contrary in Barrett v. Halifax BS [1995] 28 HLR 634). It was actually held in the Krausz case that the county court judge did not have jurisdiction to suspend an order or warrant for possession to enable the mortgagor to seek an order for sale from the High Court under s.91 (see below). It was incumbent on the mortgagor to do that before a warrant took effect.

 

NB: Once the warrant is executed the court's powers under the AJA 1970 are exhausted (Cheltenham & Goucester BS v. Obi [1996] 28 HLR 22 CA).

 

See further, M. Haley, “Mortgage default: Possession, relief and Judicial Discretion” (1997) 17 Legal Studies 483 and

 

L.Whitehouse, The Home-Owner: Citizen or Consumer in Land law: Themes and Perspectives (ed. S.Bright and J.Dewar) p.183-205.

M.Dixon, Combating the mortgagee’s right to possession: new hope for the mortgagor in chains? (1998) 18 LS 279.

 

(d) Power of sale

 

(Note: distinction between power of sale arising and power of sale being exercisable).

 

ss. 101, 103-107 LPA 1925

 

Note that the purchaser is not concerned with whether the power of sale is exercisable.

 

Lord Waring v London and Manchester Assurance Co Ltd. [1935] Ch 310

 

When selling building societies must obtain the best price reasonably obtainable (s.13 Schedule 4, Building Societies Act 1986)

 

But what of other mortgagees?

 

· The mortgagee is not a trustee of his power of sale:

 

Kennedy v De Trafford [1897] AC 180

 

· the mortgagee has a duty based on principles of equity to act in good faith and to use his powers for proper purposes although the precise extent of that duty may vary according to the circumstances

 

Cuckmere Brick Co. v. Mutual Finance Ltd. [1971] 2 All ER 633

Standard Chartered Bank Ltd v. Walker [1982] 1 WLR 1410).

 

See also China and South Sea Bank Ltd v. Tan Sin Goon [1990] 1 AC 536).

 

For the view that liability to the mortgagor is based upon an equitable duty and not tort see Parker-Tweedale v. Dunbar Bank Plc [1990] 2 All ER 577; Downsview Nominees Ltd v First City Corporation Ltd [1993] AC 295; AIB Finance Ltd v Debtors [1998] 2 All ER 929, Yorkshire Bank plc v Hall [1999] 1 WLR 1713. See also Medforth v Blake [1999] 3 All ER 97 and Raja v Austin Gray [2003] 13 EG 117 CA.

 

The mortgagee cannot sell to himself but sale to a relative or friend or a company in which the mortgagee is interested can be valid (Tse Kwong Lam v. Wong Chit Sen [1983] 3 All ER 54).

 

 

(e) Foreclosure

 

ss.88 (2), 89(2) LPA 1925

s.34(3) LRA 1925

Twentieth Century Banking Corporation Ltd v. Wilkinson [1977] Ch 99.

 

(f) Appointment of a receiver

 

s.101 LPA 1925

Medforth v Blake (above)

[patrickq1]

i think you can safely say diddled you certainly have a arguable case,

patrickq1

Edited August 19, 2010 by patrickq1

[diddled]

Cheers Patrick

[chillinlong]

thanks PAtrick and Diddled, trying to understand how the above benefits.

 

Thanks again!

 

got loads of more info that they seem to be playing on like little kidz.

[patrickq1]

yes they seem to be treeting all this as a joke, the above section i entered was more of benefit to diddled and it shows she has a case to answer, so we can look at what been said to der can you diddled put up anything that they have said with regards to claim on property post it up but remove any barcodes and identities then we can read through there demands and be able to answer fully

this is the important part chilli .you have to apply for jurisdiction to suspend an order or warrant for possession to enable the mortgagor to seek an order for sale from the High Court under s.91 (see below). It was incumbent on the mortgagor to do that before a warrant took effect.

and to use the case known as Will the court postpone possession to enable the mortgagor to sell (see below as to court's power to order a sale by the mortgagor) on the basis that he would thereby be "likely to be able within a reasonable period to pay any sums due"?

 

The answer is yes if the facts support such a conclusion. (National and Provincial BS v. Lloyd [1996] 1 All ER 630 CA. See also Bristol & West BS v. Ellis (1996) 73 P. & C.R 158 CA).

 

Note also that the court has jurisdiction to order a sale under s.91 LPA in an action for foreclosure, redemption or sale. The mortgagor may make such an application. (For an unusual case where the house was worth less than the debt and the court ordered a sale (the mortgagee wanted to defer any sale) see Palk v. Mortgages Services Funding Plc. [1993] Ch 330. see also Polonski v

Lloyds

Bank Mortgages Ltd [1998] 1 F.L.R. 896.

[patrickq1]

you really dont even need to ask for the order to sell you can ask for time related order to clear the defaults over a six month or even twelve month period...

patrickq1

[diddled]

Patrick, I dont have a working scanner at the moment, but will see what I can dig out.

Im trying to help chilling at the moment with a CPR letter. Its not really my field and all the templates Ive seen seem to be ones that can be sent after proceedings have started. Can you help, or direct to an appropriate template please?

[patrickq1]

will see what i can do

[patrickq1]

Supplementary written evidence submitted by the Financial Services Authority

 

1. We are submitting this note as a follow-up to the oral evidence given by Jon Pain and Lesley Titcomb on 23 March.

2. In this note we provide answers to the specific questions the Committee asked on:

 

 

 

— A list of the reasons why the seven cases dealing with mortgage arrears and practices have been referred to the FSA's Enforcement division for investigation;

 

 

— The length of time (following the warning notice) for which the seven cases in Enforcement dealing with mortgage arrears and practices have been under investigation;

 

 

— The numbe of current GMAC customers that received compensation; and

 

 

— Tripartite discussions about the contract between GMAC and Bradford and Bingley.

RESPONSE

A list of the reasons why the seven cases dealing with mortgage arrears and practices have been referred to the FSA's Enforcement division for investigation

3. We expect firms to comply with our requirements when dealing with customers in mortgage arrears. This includes treating such customers fairly, handling customers' complaints promptly and fairly, and communicating with customers who are in mortgage arrears in a way which is clear, fair and not misleading. We take a hard line when firms do not meet our standards, and we have taken action against such firms as a result.

 

4. The cases have been referred to Enforcement for investigation because there are circumstances suggesting breaches of the FSA's Principles for Business (such as Principle 2—due skill, care and dilligence, Principle 3—systems and controls, Principle 6—fair treatment of customers, Principle 7—information to clients, and Principle 9—customers' relationships of trust) and relevant rules in the Mortgages Conduct of Business Sourcebook (especially those rules relating to charges to customers in mortgage arrears and treatment of customers being repossessed). Some of our investigations involve individual senior managers as well as the firm. The cases were referred between July and December 2009.

 

5. The Committee will have noted the settlement of one of these cases in the form of enforcement action taken against Kensington Mortgage Company Limited, publicised on 12 April 2010. Kensington has been fined £1.225 million and will provide redress to consumers who have been disadvantaged which is expected to cost them £1.066 million. We identified a number of serious failings which occurred between 1 January 2007 and 31 October 2008 in relation to its mortgage arrears handling processes and in its dealings with customers in arrears. These include:

 

 

 

— Failing to ensure mortgage servicing staff acting on its behalf had adequate understanding of treating mortgage arrears customers fairly; and

 

 

— Concentrating on the repayment of mortgage arrears over a short period of time rather than agreeing an arrangement to pay the arrears based on the customer's individual circumstances.

Applying three charges to customer's accounts that were unfair and/or excessive. These were:

 

 

 

— A fee for a returned direct debit which was charged regardless of how many times the direct debit had already been returned unpaid;

 

 

— An excessive fee for cancelled direct debits which did not reflect administrative costs; and

 

 

— An early repayment charge on mortgage balances which included arrears fees and charges within that balance.

6. The firm also failed to take reasonable care to organise and control its affairs responsibly and effectively, and to ensure adequate risk management systems. Its management information focused on the performance of the firm's mortgage book and the profitability of the business, rather than on treating customers fairly.

 

The length of time, following the warning notice, the seven cases have been under investigation

7. Once a warning notice is sent out, the firm or individual has 28 days to make oral or written representations and can apply for extra time if required. Six cases are currently being investigated by our Enforcement team, but have not yet reached warning notice stage.

 

8. The case that has reached warning notice stage has been settled, as noted above.

 

The number of current GMAC customers that received compensation

9. In October 2009, we fined GMAC £2.8 million for failing to treat their customers fairly. We also secured redress of up to £7.7 million (plus interest) for over 46,000 mortgage customers. 16,712 of the 46,000 customers involved in the redress programme remain live in the GMAC-RFC balance sheet and securitised accounts as at 31 March 2010. The loans made to 429 of the 46,000 customers involved in the redress programme were sold to Bradford & Bingley.

 

Tripartite discussions about the contract between GMAC and Bradford and Bingley

10. The Tripartite Authorities have regular discussions about financial institutions where, among other things, financial stability concerns exist. Records of tripartite discussions have been and remain confidential and this is a well established practice. The Financial Services Bill proposed partially amending this by mandating the publication of the minutes of standing meetings of the Council for Financial Stability (CFS) but acknowledged that "The confidentiality of market-sensitive discussions will, of course, be protected, and it is likely that this will mean that a significant proportion of the Council's minutes will not be suitable for publication." (Reforming Financial Markets HMT 2009.) Although clauses 1-4 of the Financial Services Bill (those relating to the CFS) were withdrawn on 8 April 2010, the acknowleged need for confidentiality around Tripartite discussions remains.

 

April 2010

[chillinlong]

Thanks again Patrick and Diddled, that is a really interesting post above about the enforcement of the FSA. This applies to all the cases I have that have been in arrears especially with MX.

[patrickq1]

that was my thinking hence the need for court action on your part, to serve an injunction on them ,but you will need some extraordinary evidence to show some wrongdoings, well you have this in part from the undue care and negligence with MX appointed receiver , if you also have it in writing that the receiver has said he is working for you and on your behalf then both MX and WS are personally liable for damages and must as part of any claim put you back in the position you would have been in from the start where no debts nor defaults were there ... so ask your freind if they can look at this , i also need any information off forum about the movement of directors , ie i know about the one move to templetons and that is a offence in its own right i have the rule for this kind of thing here and will await MUngos Mum to come back with some more info on this happening, i can appreciate MM she has been at it for over 2 years and its really frustrating for her not getting anywhere but its coming together from my prospective and i am putting the bits into order so should nt be too long fore all of it is ready ..need some info from meerkat and pigland especially of the wrondoings but again by pm and not on the thread ..

patrickq1

[tarquin999]

Allsop's are being absolutely unbelievable with my Chelsea Building Society properties. All properties were tenanted with reliable long-term tenants.

 

On Day One, Allsop's visited each of the tenants and told them they were going to put the property up for auction in a month's time. When I challenged Allsop's they said "no, that's wrong, we would never do that". 2 days later the photographer turned up at each property and told the tenants they were going to auction on Sep 14th.

 

I have now lost half my tenants, because they do not want to leave things to the last minute.

 

They won't even let me try to sell them via an estate agent. The properties *will* make a loss when they go to auction. I bought them as long-term speculative investments, not as something to sell a couple of years after I bought them.

 

I don't know whether there's a difference, but Allsop's are acting as a Fixed Charge Receiver rather than an LPA Receiver? Also, they're not paying rent to Chelsea... they're keeping it to "settle the account upon completion of receivership" (that's what the intro letter said, received on Day One - which obviously meant that on Day Zero they intended to sell the property without giving me a chance).

 

Someone needs to sort out this LPA business - it seems to be operated by people who want a simple life, and give no regard to the welfare of the landlord or the tenant. Everyone is going to lose out, whereas if they had accepted my payment plan proposal, everything would have been sorted COMPLETELY before end of 2010.

 

Even if they sell ONE of my properties for a loss at auction, the knock on effect of the shortfall is likely to cause me to lose my other 50+ properties when they claim for the shortfall. This has got to be criminal. I was only 2 months late, for goodness sake - and I did pledge, once I knew that a Receiver had been appointed, that I would happily enter into a payment recovery plan. Chelsea wouldn't have any of it.

 

I know it's my fault that payments were late (bad bookkeeping) - but I've had my kick up the a*se, and now want the opportunity to put tings right - but they won't let me. Very sad.

[patrickq1]

Fixed charge receiverships:a user’s guideFixed charge receiverships are often seen on the insolvency of an owner of real propertyor other valuable assets. They are unusual animals in several respects – quite unlikeother insolvency procedures. In this briefing we outline some of the issues for lenders,potential receivers and other interested parties.What are they?A fixed charge receiver may be appointed by a lender with a mortgage, charge or other securityover real property or other specified assets. The appointment is quick and fairly inexpensive. The receiver will generally have broad powers to realise assets and, in respect of real property,collect rent. Unlike many other insolvency appointments, a fixed charge receiver need not be alicensed insolvency practitioner and specialist surveyors are commonly appointed. Many will bemembers of and comply with the voluntary code of NARA (the Association of Property and FixedCharge Receivers).alternative terminologyConfusingly, fixed charge receivers are referred to byan array of different names. Many refer to them as"non‑administrative receivers", "ordinary receivers" or(often inaccurately) as "LPA" or "Law of Property Actreceivers". With the exception of LPA/Law of PropertyAct receivers (which, when the term is used correctly, is adifferent procedure) these terms are interchangeable.hoW are they appointed?The starting point should be a review of the loan facility andsecurity pursuant to which the appointment is made. If thefacility is repayable on demand (as would be the case with anoverdraft) the lender can start the process by serving a letterof demand on the borrower at any time. This will require immediate repayment of sums due but mustbe executed and served in accordance with the loan facilityand supporting security documents. If the debt is not paidfollowing demand, a receiver can be appointed by a simpleappointment document (again in accordance with the facilitydocuments). If the loan facility is repayable at the end of a fixed term (a"term facility") with early repayment following an event ofdefault, then the demand may only be made when default hasarisen or the term matured. The appointment is effective from the time of signature of anacceptance by or on behalf of the receiver. In many cases the lender will also be able to obtain aninvitation from the borrower to appoint a receiver.

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appointments – a feW potential complications• Timing: In the absence of terms to the contrary in the facility documents, an appointment is commonly made24 hours or less after demand. Care, however, needs to be taken where the demand is served outside of business hours as case law dictates that the borrower must have an opportunity to implement the “mechanics of payment”(effectively, to transfer funds from another bank account).• Floating charges: If the lender's security contains a floating charge over the whole or substantially the whole of the assets of the company, the floating charge element ofthe security must be excluded from the appointment. Failure to do so may render the appointment as one of anadministrative receiver which is now prohibited outside of certain limited exceptions. An administrative receiver must be a licensed insolvency practitioner. If assets subject to the floating charge are an important part of the realisation strategy (such as where value will be optimised by the saleof the business as a going concern) then an administrationmay be more appropriate (on which see further below).• Priorities: If there is more than one charge, mortgage orother security secured on the property over which thereceiver is to be appointed, then the terms of any deed of priorities or inter creditor agreement need to be considered and the procedure for appointment, consultation or consent complied with. Joint Appointments:• It is often considered preferable to have more than one individual appointed jointly so that receivership functions can be dealt with in the absence ofthe principal appointee. In that case both must accept the appointment and the security and appointment need careful review to check whether powers can be exercised individually. appointment advice If there is some defect in the appointment then the receiver(and his appointor) may be exposed to a claim for damages from the borrower or other interested parties. To protect against this, the receiver will generally take legal advice on the validity of his appointment. This will review the enforceability of the loan and security documents,compliance with the appointment procedure and othermatters which could affect the validity of the appointment. the receiver's poWersThese will generally be as set out in the security under whichthe receiver is appointed, although there are limited powers(for instance to collect rent) under the Law of PropertyAct 1925. They will, generally, include a power to sell andcollect rent. Advice should be taken in each case. Particularcare should be taken when the receiver wishes to carry onbusiness, pursue or compromise litigation, mortgage propertyor commit the borrower to new obligations.duties and liabilitiesThe receiver's principal legal duty is to the lender whoappointed him. He will, however, also owe duties to theborrower, any guarantor of the debt, any other securedlenders and other interested parties. The exact scope ofthose duties is complex and much turns on the facts of eachcase. In general, however, the receiver must act in good faith,take reasonable precautions and exercise due diligence in thesale process. employeesThe receiver will be personally liable for contracts ofemployment adopted (although is not to be taken to haveadopted a contract by reason of acts or omissions in thefourteen days after his appointment). If the business is soldas a going concern, these liabilities will be transferred tothe buyer. In all cases, however, where there are employees,careful thought as to strategy is needed at the outset.selling the assetsWhen sale terms are agreed, the receiver (or in some casesthe lender) will act to complete the sale of the property. The receiver will not generally be in a position to answerreplies to enquiries formally (although will often provideinformation he is aware of and the borrower may be helpful in filling the gaps). The receiver may even decline to give the usual full title guarantee covenant on certain assets. The agreement will generally exclude the receiver's personal liability. The buyer will need to be satisfied that the receiveris properly appointed through sight of a certified copy of his appointment and other documents.

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other formalities Notice of the appointment should be filed at Companies House within 7 days where the borrower is a company. Where appointed over assets of a company, the receiver must file accounts in accordance with the regulations atCompanies House and the borrower must refer to his appointment on invoices, orders for goods or business letters. Where the appointment encompasses floating chargeassets, the receiver must set aside the "prescribed part" ofrealisations under the floating charge for unsecured creditors. alternative routes forthe lenderSecured creditors have a number of choices when faced witha distressed borrower (see further our briefing Insolvency:Key Issues for Business People). Where the securitycontains a floating charge over business assets and thoseassets are important to optimise value (for instance throughan anticipated sale of the business as a going concern) theappointment of an administrator may be preferred. Administration may also be preferred for the following reasons:(a) An administration appointment (or even certain stepstowards it) will create a moratorium on forfeiture, distress/commercial rent arrears recovery, security enforcement andlitigation.(b) Administrators' powers are set out in statute and arenot dependent on the security documents being drafted toinclude all necessary powers. © A fixed-charge receiver, unlike an administrator does nothave the statutory powers to summons, investigate and demandinformation from directors and other relevant parties.Administrators, however, must be licensed insolvencypractitioners. Administration requires greater reporting tocreditors and is often more expensive than a fixed chargereceivership.In very simple cases, the lender may prefer to sell directly asmortgagee (although may be concerned about potential dutiesto third parties, particularly where the property is tenanted).In appropriate cases liquidation or voluntary arrangementsshould be considered.What if the borroWeris already in a formalinsolvency procedure? The appointment of an administrator (or certain stepstowards that) or the grant of a moratorium for thenegotiation of a small company voluntary arrangementor individual voluntary arrangement, will restrict theappointment of a receiver without the consent of the officeholder or the courts. Liquidation (or bankruptcy for individuals) will not generallyrestrict the appointment or conduct of the receivership. They will, however, terminate the receiver’s right to act asagent of the borrower and may, therefore, increase the riskof the receiver’s exposure to such personal liability if hebreaches his duties after the commencement of bankruptcy orliquidation.The appointment of a receiver does not prevent theappointment of an administrator or liquidator; or litigation,distress/commercial rent arrears recovery or forfeiture. It isnot uncommon to see a company in liquidation as well ashaving one or more receivers appointed over its assets.the end of the receivershipA fixed charge receiver may be removed or replaced by hisappointor at any time, and may resign. Once his appointorhas been paid in full, his authority to act as a receiver ceases. The receiver can be removed from office by court order or byan administrator. Cessation of the receiver’s appointment should be registeredat Companies House.Where the receiver has assets left after paying off hisappointor he may seek an indemnity out of assets forany liabilities suffered while in office from the insolvencypractitioner to whom he passes assets for any subsequentliquidator or other procedure.

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|the use of receivershipsFixed charge receiverships look set to remain as a popularprocedure for realising secured debts on real property. While relatively inexpensive and simple, they are not without theirdifficulties. Specialist advice is required to ensure all partieshave assessed the validity of the appointment and the scopeof the receiver’s powers and liabilities.This briefing offers general guidance on fixed charge receiverships. It reflects the law as at September 2008. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice

[patrickq1]

liquidated damages

look at your mortgage contract if this term is in it it then renders the contract unfair , and since they reclaimation of not one but severall properties because of a couple of default payments without mediation can render the companies liable for damages in my opinion,

patrickq1

[patrickq1]

The Possessions Register

 

 

Introduction

 

The CML set up the Possessions Register in 1991 in conjunction with the two major credit reference agencies, Experian and Equifax.

The Register was primarily set up and organised to prevent mortgage fraud.(this register was purportedly set up as a secret register we were not supposed to find out about) This is to prevent cases where a borrower applies for an additional mortgage but does not tell the lender after having already fallen into arrears on the primary mortgage.

What type of information does the Register hold?

 

The specific information held on the Register includes:

• Name of the lender.
  
• Mortgage account number.
  
• Name of the borrower.
  
• Date of possession.
  
• Type of possession (court order or voluntarily).
  
• Whether or not any outstanding debt on the mortgage has been paid.
  
• Address of the property taken into possession.
  
• The previous and current addresses of the borrower (if known).
  

The mortgage lender will provide this information directly to the credit reference agencies. These details are then held on the Register for exactly six years from the date the possession took place. Details are then automatically removed after this period of time.

 

How can I find out if I am on the Register?

 

The Register is operated by the two main British credit reference agencies, Experian and Equifax. You can find out if they hold any credit information on you by writing to them at the addresses below. They will charge a small fee of £2.00 to provide this information.

Experian

Equifax UK

Consumer Help Service

PO Box 8000

Nottingham

NG1 5GX

Credit File Advice Centre

PO Box 1140

Bradford

BD1 5US

[tarquin999]

liquidated damages

look at your mortgage contract if this term is in it it then renders the contract unfair , and since they reclaimation of not one but severall properties because of a couple of default payments without mediation can render the companies liable for damages in my opinion,

patrickq1

Thanks patrickq1. I will check my contract! Also, thanks for the explanation of Fixed Charge Receiver.

 

This entire thread is becoming a very interesting read. Someone like the CML or FSA needs to police this Receivership thing. Lenders and Receivers cannot be allowed to run amock using whatever scare tactics they like, and without any accountability. They truly seem to be accountable to nobody - which in this day and age seems most bizarre.