welshperson3 v blemain finance - 140A Unfair relationship -started court proceedings

[suffering]

Thanks for showing a interest wp3. we had a mortgage so originally applied for a secomd charge 50k loan via a broker predominantly to finish our family home the last of 3 houses to be built the other two were 99% finished and we had moved into one of them prior to the loan. i was told the loan would be very quick and straight forward as we had potentially around £500 equity. (as all three houses were on one title deed ) we were lead along for 6 weeks with a lot of stress and confusion wrong loan agreements. Constantly being told funds would be released. Then out of the blue two LMC directors aranged a home / site visit asking a lot of questions exposing our desperate vulnerable situation i had'nt a clue about professional loans. again the loan was agreed i was told i was ok to arrange tradesmen. a new 50k loan was redrawn up and we signed it at the sol's the next day

Three days later i received a call from LMC director saying he had changed his mind he then took over from the broker completly changing the course of action, withdrawing the loan offer, changed the loan to a first charge, taking out my high street mortgage provider, substantially increasing the loan, with 4 mths i was persueded to agree only to find the loan would release £30k So yet another increased loan agreemnt was drawn up (the 8th) by the time i signed my back was completely against the wall. this is not the full story but it gives a insite

 

The loan was classed as a business loan, unregulated, term was 12mths

[welshperson3]

Hi searching 70

 

 

In the post above the augment is basically about how high the interest rate was, and I don’t think any argument about how high Blamains interest rate is will get anyone anywhere.

 

 

If you look at Blemains loan agreements they are usually variable interest rates.

 

Now what I have found an issue with is the word variable, Blemains idea of variable interest, as stated in their agreements, says that the interest can go up above what your initial interest rate was, but it can never fall below what your interest rate was when you signed up to the agreement.

 

 

This is about an unfair term as I think anyone can imagine, this term can only benefit them,

 

 

Think of it like this,

 

 

Blemain borrow money from the bank at a variable interest rate to lend to you. The bank drops the interest rate blemain are borrowing money at, blemain don’t pass on the interest rate cut and effectively make a lot more profit.

 

 

 

If the bank that Blemain borrows money from to lend to you puts up the interest rate, then blemain puts up the interest rate you pay effectively keeping their profit margins.

 

 

 

The unfair terms in consumer contracts regulations were written for exactly these type of one sided terms in agreements.

 

Wp3

Edited January 28, 2013 by welshperson3

[welshperson3]

I know you say it was a commercial loan, and they say it was a commercial loan. But what I would be checking is the rules.

What makes this a commercial loan if as you say they paid off your first charge mortgage so effectively this is a first charge and at least %40 of the money was for your home then you may find that it is covered by MCOB rules.

wp3

[suffering]

This is somthing i have been trying to get th FOS to look into i don't agree that this should of been a un-regulated or a business loan but LMC made it fit into that category. The loan was because we extended our property adding a bedroom etc so it was suitable for us to live in, thus sending us over budget

I must admit i know very little about MCOB it has only recently come to my attention. At the time of the loan application we were using the facilities of two of the properties with our furniture spread between the two, hence using / occupying 70% (one house is larger) LMC have for some reason always tried to deny we were living there, even though they witnessed it, and the agreement has it on, as our address.The loan was predominantly for our own house the other two were decorated and carpeted and 99% finished

As i now understand it

A 'Regulated Mortgage Contract' is a loan on the security of a first legal mortgage on land in the United Kingdom of which at least 40% is used as or in connection with a dwelling by the borrower. This loan can be to an individual or a trustee. But the FOS stated that as we intended to sell two properties it was a business loan missing the point I have put this back to them and await their response.

Edited January 29, 2013 by suffering
additional information

[welshperson3]

Hi suffering

　

Sorry this is so long but I think it will help you,

If you can show that your loan is in fact a fully regulated first charge mortgage, them you can use MCOB rules, and then you will have a much bigger hammer to crack this nut,

　

http://fsahandbook.info/FSA/html/handbook/PERG/4/4

　

Top of Form 1

The definition of "regulated mortgage contract"

PERG 4.4.1 06/04/2007

Article 61(3)(a) of the Regulated Activities Order defines a regulated mortgage contract as a contract which, at the time it is entered into, satisfies the following conditions:

(1) the contract is one where a lender provides credit to an individual or trustees (the 'borrower');

(2) the contract provides for the obligation of the borrower to repay to be secured by a first legal mortgage on land (other than timeshare accommodation) in the United Kingdom; and

(3) at least 40% of that land is used, or is intended to be used, as or in connection with a dwelling by the borrower (or, where trustees are the borrower, by an individual who is a beneficiary of the trust) or by a related person.

 

PERG 4.4.2 G to PERG 4.4.9 G set out the FSA's understanding of some key concepts contained in article 61(3)(a). It should be noted that, where a contract meets the necessary requirements for both a regulated mortgage contract and a home purchase plan, it will be treated as a home purchase plan only and will not be a regulated mortgage contract. Guidance on the meaning of a home purchase plan is in PERG 14.4 (Guidance on home reversion and home purchase activities)1.

Provision of credit

PERG 4.4.1A 01/07/2005

(1) Article 61(3)© of the Regulated Activities Order states that credit includes a cash loan and any other form of financial accommodation. Although 'financial accommodation' has a potentially wide meaning, its scope is limited by the terms used in the definition of a regulated mortgage contract set out in PERG 4.4.1 G. Whatever form the financial accommodation may take, article 61(3)(a) envisages that it must involve an obligation to repay on the part of the individual who receives it.

(2) In the FSA's view, an obligation to repay implies the existence, or the potential for the existence, of a debt owed by the individual to whom the financial accommodation is provided (the 'borrower') to the person who provides it (the 'lender'). Consequently, for any facility under which any form of financial accommodation is being provided, the test is whether it allows for the possibility that the person providing the financial accommodation may be placed in a position where he becomes a creditor of the individual to whom he is providing it. An example of this would be the issue of a guarantee by a bank to a third party for an individual customer (such as a rent guarantee or a performance bond) where the guarantee is secured on a first legal charge over the customer's residential property. In the FSA's view, this would amount to a regulated mortgage contract as the customer would owe a debt to the bank in the event that the bank had to pay the third party under the guarantee.

Which borrowers?

PERG 4.4.2 01/07/2005

The condition set out in PERG 4.4.1 G (1) limits the range of borrowers to whom the protections of the mortgage regulation regime apply to individuals and trustees. If a company (which is not acting as a trustee) borrows money for the purpose of funding the company's business, and the loan is secured by a mortgage over the company's property, the mortgage contract is not a regulated mortgage contract. So a lender will not carry on a regulated activity by entering into that contract, nor will the lender carry on a regulated activity if it advises on, arranges or administers that contract. However, if the lender makes a loan for business purposes to an individual sole trader, or (in England and Wales) a partnership, and the loan is secured on the borrower's house or houses, the contract will be a regulated mortgage contract.

Date the contract is entered into

PERG 4.4.3 01/07/2005

In order to meet the definition of a regulated mortgage contract, a mortgage contract must meet the conditions set out in PERG 4.4.1 G (1) to PERG 4.4.1 G (3) at the time it was entered into. The effect is that contracts which meet those conditions at that time remain regulated mortgage contracts throughout their remaining term, even if there are periods of time when some or all of the conditions are not satisfied. Conversely, contracts that do not start out as regulated mortgage contracts cannot subsequently become so, even if they meet all the conditions set out in PERG 4.4.1 G (1) to PERG 4.4.1 G (3). A person that only administers mortgage contracts which did not meet those conditions at the time they were entered into will not, therefore, need permission to administer regulated mortgage contacts.

PERG 4.4.4 01/07/2005

There may, however, be instances where an existing contract, which was not a regulated mortgage contract at the time it was entered into, is replaced as a result of a variation (whether the variation is initiated by the customer or by the lender), and the new contract qualifies as a regulated mortgage contract. A person may therefore need to consider this possibility (which could affect contracts initially entered into before 31 October 2004 as well as subsequent loans) when deciding whether he needs permission to carry on any of the regulated mortgage activities.

Land in the United Kingdom

PERG 4.4.5 01/07/2005

The condition set out in PERG 4.4.1 G (2) means that a regulated mortgage contract must be secured on land in the United Kingdom. Contracts which involve taking security over moveable property therefore cannot be regulated mortgage contracts. So a contract secured on a caravan will not be a regulated mortgage contract, unless the contract also involves a mortgage over the land on which the caravan stands.

Occupancy requirement

PERG 4.4.6 01/07/2005

The condition set out in PERG 4.4.1 G (3) means that loans secured on property which is entirely used for business purposes (such as an office block) cannot fall within the definition. However, loans secured on 'mixed use' property could be covered, provided that the borrower (or trust beneficiary, where the borrowers are trustees) or a 'related person' uses at least 40% of the total of the land as or in connection with a dwelling. Loans secured on a six-floor property, half of which was occupied by the borrower and half let out for business purposes would therefore satisfy the definition. (Article 61(4)(b) makes it clear that 'land', in the context of a multi-storey building, means the aggregate of the floor area of each of the storeys.)

PERG 4.4.7 01/07/2005

The expression 'as or in connection with a dwelling' set out in PERG 4.4.1 G (3) means that loans to buy a small house with a large garden would in general be covered. However, if at the time of entering into the contract the intention was for the garden to be used for some other purpose - for example, if it was intended that a third party were to have use of the garden - the contract would not constitute a regulated mortgage contract. Furthermore, the FSA would not regard a loan to purchase farmland and a farmhouse as constituting a regulated mortgage contract (where the farmhouse and garden amount to less than 40% of the land area), since it does not appear that the land could properly be said to be used 'in connection with' the farmhouse. The presence of the farmhouse is unconnected with the use to which the farmland is put (in contrast to a residential property's garden, which would have no existence independent of the property).

PERG 4.4.8 01/07/2005

The requirement that at least 40% of the land area be used as or in connection with a dwelling means that 'buy to let' loans secured on the property to be let will usually be excluded. However, such loans will not be excluded if:

(1) the lessee is a 'related person' to the borrower. This will be the case even if the borrower subsequently takes possession of the property, as the conditions set out in PERG 4.4.1 G (1) to PERG 4.4.1 G (3) were not satisfied at the outset of the contract (see PERG 4.4.3 G); or

(2) at the time the contract is entered into, the borrower has a real intention to use the land as, or in connection with, a dwelling (for example a member of the British Forces Posted Overseas who buys a property in the United Kingdom intending to live there on his return but which he lets out in the meantime).

PERG 4.4.9 05/12/2005

'Related person' is defined in article 61(4)© of the Regulated Activities Order as meaning the borrower's spouse, civil partner, 2parents, grandparents, siblings, children and grandchildren. An unmarried partner of the borrower whose relationship with the borrower has the characteristics of the relationship between a husband and wife is also included; this can include a person of the same sex as the borrower. Stepchildren, however, would seem to be excluded.

Purpose of the loan is irrelevant

PERG 4.4.10 01/07/2005

The definition of regulated mortgage contract contains no reference to the purpose for which the loan is being made. So, in addition to loans made to individuals to purchase residential property, the definition is wide enough to cover other loans secured on land, such as loans to consolidate debts, or to enable the borrower to purchase other goods and services.

Type of lending

PERG 4.4.11 01/04/2012

The definition of regulated mortgage contract also covers a variety of types of product. Apart from the normal mortgage loan for the purchase of property, the definition also includes other types of secured loan, such as secured overdraft facility, a secured bridging loan,33 a secured credit card facility4 and 4regulated lifetime mortgage contracts4 under which the borrower (usually an older person) takes out a loan where repayment of the capital (and in some cases the interest) is not required until the property is sold, usually on the death of the borrower.

PERG 4.4.12 01/04/2012

A number of products, however, are excluded from the definition, such as:

(1) loans secured by a second or subsequent charge (as the lender does not have a first charge); and4

(2) loans secured on commercial premises (as the borrower will not be using the land as or in connection with a dwelling)4.4

(3) 4[deleted]4

Regulated mortgage contracts and contract variations

PERG 4.4.13 01/07/2005

The effect of the Regulated Activities Order is that mortgage contracts which are varied can fall into one of the following categories:

(1) a contract that was entered into before 31 October 2004, and that is subsequently varied on or after that date so that is satisfies the conditions set out in PERG 4.4.1 G (1) to PERG 4.4.1 G (3), will not be a regulated mortgage contract (because it was not a regulated mortgage contract at the time it was entered into);

(2) a contract that was originally entered into before 31 October 2004, but is subsequently changed on or after that date such that a new contract is entered into, will be a regulated mortgage contract (provided, of course, that it meets the definition in the Regulated Activities Order); and

(3) a regulated mortgage contract that was originally entered into on or after 31 October 2004, and which is subsequently varied by, for example, making a further advance, will remain a regulated mortgage contract.

PERG 4.4.14 01/07/2005

It is possible for more than one mortgage contract to be secured by the same (first) charge. The first contract might be entered into before 31 October 2004 (and therefore not be a regulated mortgage contract) and a second contract entered into on or after 31 October 2004 (and be a regulated mortgage contract).

　

　

　

　

　

　

　

　

　

　

　

　

　

　

[hazepaul]

WP3 thank you for all your help and advice you have already pointed me in the right direction without you knowing it.

 

I have now got a Consumer Law Solictor looking at all our paper work.

 

We have CCA Loan from 2005.

 

Had problems with Monarch, and almost every issue you guys have been speaking about.

 

Due to go to Court on the 6th feb for reposession Blemain have asked for it to be suspened with a chance to restore.

 

We have paid in full any arrears plus this months payment by the 22nd January.

They told me last friday they had canceled the hearing now Wednesday the letter came to say they had asked for it to be suspended.

Cannt trust anything they say

 

.Waiting to see what solictors say hoping they can help at last to put the Bad Guys Down.

 

I have MS and they have made our lives hell over the past 7 year;

Just had paper work off them

ie Statement of Payments- Statments of Debits to Account ( they do not match documents i have already this is really strange none of the dates match )

 

then We asked for Interest added to the account and

 

they sent us a letter to send the Tax office with the sum of £21,000.00 about on which added up are the payments made over the past 7 years.

 

Our Loan still stand at £31,000.00.

 

so Like you said earlier looks like we will never pay it off .

[determindator]

Hi WP3, don't know if you have used the UTCCR's yet which as far as i'm guided covers all consumer contracts http://www.e-lawresources.co.uk/Unfair-Terms---Regulation-by-statute.php. Section S11 refers to the burden is on the party seeking to enforce the term to show that it was fair and reasonable. Needs to be read in full to locate the relevant points which can be used.

[welshperson3]

Hi HazePaul

　

Its nice to know you have solicitors helping you, as you say the amount they claim you owe them is £31k, then if you add interest to this for the reminder of the loan, and divide by the amount you are paying monthly you will find that it is not going to get paid by the end of the agreement, even if they stop adding their unfair charges now.

　

There is going to come a point in this agreement where you are going to have to make a decision, and they are.

　

1 pay Blemain off all that they are claiming

2 extend the length of this agreement (this is what blenain want, and you possibly end up paying three times the amount stated on your agreement)

3 Complain to the financial ombudsman services (sometimes works sometimes not)

4 you take them or they take you, but end up in court.

　

5 Blemain remove all charges and you pay what you thought you were signing up to. ( just whish full thinking on my part, we all know blemain don’t do this)

　

　

If the solicitors you have are any good then hang on to them and try to push them into dealing with this now.

 

Dealing with BLEMAIN is like having a tooth out, you may put it off but eventually you have to do something about it.

　

I have lots of documents and information on this company, if you need any just ask.

　

wp3

Edited January 31, 2013 by welshperson3

[welshperson3]

Hi D

Yes the UTCCR's cover agreements whether regulated or not, so dose s140 CCA unfair relation ship, both put the burden of prove on the person trying to impose an unfair term, or some other form of unfairness to show that it is fair.

wp3

[hazepaul]

Hi HazePaul

　

Its nice to know you have solicitors helping you, as you say the amount they claim you owe them is £31k, then if you add interest to this for the reminder of the loan, and divide by the amount you are paying monthly you will find that it is not going to get paid by the end of the agreement, even if they stop adding their unfair charges now.

　

There is going to come a point in this agreement where you are going to have to make a decision, and they are.

　

1 pay Blemain off all that they are claiming

2 extend the length of this agreement (this is what blenain want, and you possibly end up paying three times the amount stated on your agreement)

3 Complain to the financial ombudsman services (sometimes works sometimes not)

4 you take them or they take you, but end up in court.

　

5 Blemain remove all charges and you pay what you thought you were signing up to. ( just whish full thinking on my part, we all know blemain don’t do this)

　

　

If the solicitors you have are any good then hang on to them and try to push them into dealing with this now.

 

Dealing with BLEMAIN is like having a tooth out, you may put it off but eventually you have to do something about it.

　

I have lots of documents and information on this company, if you need any just ask.

　

wp3

Thank You WP3 for replying early days been trying since 2008 been to FOS before with another company but they were out for their own ends Ive just found out. FOS said because they werent part of the FOS until 2007 they couldnt help I would have to take this matter to court myself. Problem is the cost involved and ofcourse Blemain nows this only to well with most of people in the same situation. But fingers crossed this time I am hopeful Ive found the good guys they have won some high profile cases so far and they know of Blemain well. Ive just remembered something about somthing I read on one of the forums not sure which one though, from a former employee of Blemain in around 2007 2008 something went on about the interest they were chargeing and this person stated that Blemain paid over time to add the interest onto the accounts of the customers before a certain deadline will have a scout around and see if I can find it. Also I was lucky I kept all my Orginal paper work and some which I should not have had at all came through to me marked not for Public Domain from the broker by mistake I think .

[hazepaul]

This is a copy of what I read on the other forum regarding charges and Blemain :

 

((exblemainstaff

08-10-2010, 10:54 PM

 

Hi

 

this is unusual im ex staff, in 2007/2008 blemain carried a massive task, they realised alot of accounts had not got the charges on the accounts. due to the change in FSA guidelines clients had to sent annual statements if the charges were not highlighted on statements then they could never be re-applied, i would suggest you take this to court, these have been applied accross all companies, blemain, cheshire, lancashire. they paid the staff double time to complete these over 6months. in exces of £5,000,000 was applied to accounts.))

 

Im not sure but round this time I seem to remember I started to get regular monthly Statements with interest added especially as I look back on 2008 one Ive got nothing before that though could that be why they are not willing to send all information out on the SAR. I have not done one yet myself the company that did my PPI I think did one but neversaw any paper work myself but from what solicitor has said so far even that has not been done right because on our loan it should have been put back to a State where we had not got the PPI so we would have no loss. But the Company that was working for us did not fight that part of the claim so Blemain are still charging us for the PPI durantion of the loan plus the interest

[welshperson3]

At the moment

 

We are not quite seeing eye to eye over what is best for me financialy and what is best for them.

 

Cant say no more yet.

 

wp3

Edited January 31, 2013 by welshperson3

[hazepaul]

I have taken a week to read all your Threads and at one point I cried to hear what heartache you and your family have and are going through but you have helped me so much with what info you have put on hear more than you realise even down to finding a solicitor because Ive tried all over the country to find one to take the case on and it ends up right at my backdoor by knowing it was a Consumer law Solictor We needed. How your case going when are you in court now? All the very best to all your family as well Hun x

[Figaro123]

I know how difficult it is to take on Blemain, I am in the middle of a court case with them and optimistic. I will keep you informed. WP3 you are an inspiration

[determindator]

Thank goodness Sub-prime mortgages being recognised in the news http://www.thesun.co.uk/sol/homepage/news/money/4773166/Ratbanks-Banks-face-10billion-bill-for-ripping-off-firms-in-loans-con.html if you haven't seen today.

[welshperson3]

Some information that may be helpful there are different documents over the years the older ones used to mention commission to the brokers, the newer ones call it “ Excellent remunerations “

　

Google this

　

Blemain underwriting and processing guide

 

wp3

[welshperson3]

Blemain underwriting and processing guide

 

 

BUILDING FIRE AND STORM DAMAGE INSURANCE In all first or second charges, we need to note our interest on the customer’s buildings insurance policy.

 On a first charge with Blemain Finance or Cheshire Mortgage Corporation, where customers have arranged their own insurance, we must have details of the insurance company, the current insurance cover and confirmation in writing that the relevant Blemain Group company has an interest in the property on a Noted on Insurance Form. This should be included before completion.

 For all second charge Blemain Finance applications we will contact the customer post completion to obtain this information and note our interest. Should the customer not provide insurance cover with our interest noted we reserve the right to insure ourselves and pass this cost on to the customer’s account.

 For all commercial applications with Lancashire Mortgage Corporation we require a copy of the building fire and storm damage insurance in all instances prior to funding.

　

Ask yourself why the above only requires first charge loans to have insurance before the loan is granted.

　

As we all know they will do anything to add costs to the loan, and whatever you do blemain will find you haven’t done enough, or deny receving documents you send.

wp3

[suffering]

hi wp3 i have studied what constitutes a regulated loan and my stumbling block is this. the loan was to finish our house (1 of 3 the other 2 were 99% finished.)and to finish a triple garage 1 per dwelling All three were on the same title deed. so i could not just put one house as security it had to be all three so at the time the loan was entered into i was occupying two propertie. and i thought that was it. however because we did not intend to remain occupying 2 houses it means that 2 must of been to either sell orto let . = unregulated

[welshperson3]

hi wp3 i have studied what constitutes a regulated loan and my stumbling block is this. the loan was to finish our house (1 of 3 the other 2 were 99% finished.)and to finish a triple garage 1 per dwelling All three were on the same title deed. so i could not just put one house as security it had to be all three so at the time the loan was entered into i was occupying two propertie. and i thought that was it. however because we did not intend to remain occupying 2 houses it means that 2 must of been to either sell orto let . = unregulated

 

 

 

 

I will explain in detail tonight as I have to go out now but the above is wrong, as a mortgage is either regulated or unregulated on the facts at the time you signed the agreement. What you plan for the future can always change, so the law is when you signed the agreement what are the facts.

 

Remember this, the day the agreement went live is when it became regulated or unregulated. Future plans mean nothing as these can change.

 

wp3

 

 

PERG 4.4.1 06/04/2007

Article 61(3)(a) of the Regulated Activities Order defines a regulated mortgage contract as a contract which, at the time it is entered into, satisfies the following conditions:

(1) the contract is one where a lender provides credit to an individual or trustees (the 'borrower');

(2) the contract provides for the obligation of the borrower to repay to be secured by a first legal mortgage on land (other than timeshare accommodation) in the United Kingdom; and

(3) at least 40% of that land is used, or is intended to be used, as or in connection with a dwelling by the borrower (or, where trustees are the borrower, by an individual who is a beneficiary of the trust) or by a related person.

[Ford]

Thank goodness Sub-prime mortgages being recognised in the news http://www.thesun.co.uk/sol/homepage/news/money/4773166/Ratbanks-Banks-face-10billion-bill-for-ripping-off-firms-in-loans-con.html if you haven't seen today.

 

yeah, saw that in the news. the banks are one big missell, incredible. some of them have also recently paid out billions in fines re accusations of money laundering etc eg http://www.which.co.uk/news/2012/12/libor-fixing-money-laundering-and-more-2012s-biggest-bank-fines-306865/ , http://www.bbc.co.uk/news/business-20673466. but, they still seem get away with things at the expense of the individual consumers. as seen in some recent unfair relationship cases eg http://www.oft.gov.uk/about-the-oft/legal-powers/legal/cca/CCA2006/unfair/unfair-rel-full/

Edited February 2, 2013 by Ford

[suffering]

Hi this was the response from the fos adjudicator . Quote:

Having reviewed your comments, I do appreciate why you feel that at the time you were occupying over 40% of the properties. However, one of the reasons that your agreement is unregulated is due to the purpose of the loan.

 

As 2 of the 3 properties were due to be sold and were not meant for your own occupation, I do feel that the loan was predominately for business purposes.

 

I have noted that you feel that the loan was ‘deliberately disguised’ by Lancashire, however I can see that this exemption was detailed in the loan agreement that you signed on xx xxxxx 2010 – I have attached a copy of the agreement for your records.

 

Because of this, I do not believe we can consider your complaint further. I appreciate that this is likely to come as a disappointment to you. I know that this is not the outcome you were hoping for. But I hope that my explanation has been helpful in setting out clearly why I have taken this view.

 

my reply was; Quote;

 

Dear xxxxxx further to my response on 25th Jan

we occupied two houses at the time the loan was taken out no.1 & no.3

The loan was predominantly to finish our own home

 

A 'Regulated Mortgage Contract' is a loan on the security of a first legal mortgage on land in the United Kingdom of which at least 40% is used as or in connection with a dwelling by the borrower. This loan can be to an individual or a trustee.

 

The response back from fos was;

Thank you for your e-mail.

I do not feel that there is anything further I can add to my opinion detailed in my letter dated 17 January 2013.

Whilst I can appreciate that you may have been occupying 2 of the 3 properties, this does not change the original purpose of the loan which gave rise to the agreement.

 

wp3 just for the record we have only sold one property, one that we was living in at the time the loan was taken out

 

 

[suffering]

I sent this yesterday to the fos i will let you know the response

Dear xxxxx I feel you have missed the point completely. At the precise point in time the loan was entered into we was occupying well over 40% what happened after that point in time is irrelevant my options were completely wide open and one of those options was to sell a property to my brother had he been in a position to proceed your argument would be completely flawed but in truth it is irrelevant because at the time we entered into the contract this loan fully fitted into the FSA guidelines and this is why LMC has been lying / denying we were in fact living at the address clearly stated on the contract / agreement and the loan was undoubtedly predominantly for the house we now live in. Further more LMC have now escalated their position and issued possession proceedings happy in the fact you have fallen for there lies. You and i now know that this group of companies have been heavily fined for its malpractice's recently by the FSA and unscrupulous behaviour has lost in courts for malpractice's and is under further investigation. If you cannot handle this case any further could you please explain the procedure for a second opinion, or to appeal

[welshperson3]

HI Suffering

I got a bit mixed up with this and I have read back thro and I think I know were I am now.

You say you occupied 2 properties, but your intention was to sell 2 of the 3.

　

So what the question is now is the size of the total plot of land that the three houses were built on and how it was divvied up,

Quite easy to prove you have or had 40% for personal use

　

If the land was divided evenly between the three houses then this loan is unregulated.

If you had the more land on the house you intended to keep 40% them loan is regulated

LAND AREA

33% / 33% /33% = UNREGULATED

40% /30% / 30% = REGULATED (you intended to keep the biggest)

You may have to prove you had 40% of the land 39% is no good so make sure

As for what the FOS say, then I would point them to the rules and regulations and then ask them to reconsider.

FOS Quote

“”However, one of the reasons that your agreement is unregulated is due to the purpose of the loan.

 

As 2 of the 3 properties were due to be sold and were not meant for your own

occupation, I do feel that the loan was predominately for business purposes“.

　

They are wrong on the above quote for the reasons posted below.

　

　

PERG 4.4.10 Purpose of the loan is irrelevant

　

The definition of regulated mortgage contract contains no reference to the purpose for which the loan is being made. So, in addition to loans made to individuals to purchase residential property, the definition is wide enough to cover other loans secured on land, such as loans to consolidate debts, or to enable the borrower to purchase other goods and services

　

　

Statutory Instruments

2001 No. 544

FINANCIAL SERVICES AND MARKETS

The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001Regulated mortgage contracts

61.—(1) Entering into a regulated mortgage contract as lender is a specified kind of activity.

(2) Administering a regulated mortgage contract is also a specified kind of activity, where the contract was entered into after the coming into force of this article.

(3) In this Chapter—

(a)a “regulated mortgage contract” means a contract under which—

(i)a person (“the lender”) provides credit to an individual or to trustees (“the borrower”); and

(ii)the obligation of the borrower to repay is secured by a first legal mortgage on land (other than timeshare accommodation) in the United Kingdom, at least 40% of which is used, or is intended to be used, as or in connection with a dwelling by the borrower or (in the case of credit provided to trustees) by an individual who is a beneficiary of the trust, or by a related person;

(b)“administering” a regulated mortgage contract means either or both of—

(i)notifying the borrower of changes in interest rates or payments due under the contract, or of other matters of which the contract requires him to be notified; and

(ii)taking any necessary steps for the purposes of collecting or recovering payments due under the contract from the borrower;

but a person is not to be treated as administering a regulated mortgage contract merely because he has, or exercises, a right to take action for the purposes of enforcing the contract (or to require that such action is or is not taken);

©“credit” includes a cash loan, and any other form of financial accommodation.

(4) For the purposes of paragraph (3)(a)(ii)—

(a)a “first legal mortgage” means a legal mortgage ranking in priority ahead of all other mortgages (if any) affecting the land in question, where “mortgage” includes charge and (in Scotland) a heritable security;

(b)the area of any land which comprises a building or other structure containing two or more storeys is to be taken to be the aggregate of the floor areas of each of those storeys;

©“related person”, in relation to the borrower or (in the case of credit provided to trustees) a beneficiary of the trust, means—

(i)that person’s spouse;

(ii)a person (whether or not of the opposite sex) whose relationship with that person has the characteristics of the relationship between husband and wife; or

(iii)that person’s parent, brother, sister, child, grandparent or grandchild; and

(d)“timeshare accommodation” has the meaning given by section 1 of the Timeshare Act 1992 (1).

　

HOPE THIS HELPS

　

WP3

 

 

PERG 4.4.8

　

The requirement that at least 40% of the land area be used as or in connection with a dwelling means that 'buy to let' loans secured on the property to be let will usually be excluded. However, such loans will not be excluded if:

(1) the lessee is a 'related person' to the borrower. This will be the case even if the borrower subsequently takes possession of the property, as the conditions set out in PERG 4.4.1 G (1) to PERG 4.4.1 G (3) were not satisfied at the outset of the contract (see PERG 4.4.3 G); or

(2) at the time the contract is entered into, the borrower has a real intention to use the land as, or in connection with, a dwelling (for example a member of the British Forces Posted Overseas who buys a property in the United Kingdom intending to live there on his return but which he lets out in the meantime).

 

WP3

 

 

Suffering you say above that LMC have issued court proceedings, have you received a date from the court yet?

You can get the judge to make a declaration on your agreement, whether it is regulated or not .

　

wp3

 

I just noticed this from one of the posts above

(b)the area of any land which comprises a building or other structure containing two or more storeys is to be taken to be the aggregate of the floor areas of each of those storeys;

　

It may not be the amount of land each house has that is important, but the actual size of the house is what the 40% relates to.

This will need checking

　

What exactly is 40% relating to house size or land area ?

　

wp3

[suffering]

I think i will now await the response to my email my argument being there was nothing written into the loan agreement saying i must sell the houses and i must not sell to a relative

its interesting to hear a judge can make a declaration i will look into this

[Halifax71]

Sorry, not read the whole thread so this may already be covered.

 

The court have a positive obligation to consider the terms of an agreement are fair before enforcing an agreement. See ECJ Pannon

 

http://www.google.co.uk/url?sa=t&rct=j&q=ecj%20pannon&source=web&cd=4&cad=rja&ved=0CEUQFjAD&url=http%3A%2F%2Fcuria.europa.eu%2Fjcms%2Fjcms%2FP_49616%2F&ei=nbEOUfWKGILJ0AXY3IDgCA&usg=AFQjCNEqoQflEi3SDXzm_1xRKnhyFvllDA&sig2=perMp9b2CpEQnlJq9_dKBg&bvm=bv.41867550,d.d2k

 

Make sure the judge does this before taking your home. And obviously go armed with a list as long as your arm as to how it is not fair.