Mortgage Securitisation Discussion Thread

[applecart]

Once the Originator has exercised his statutory express power of sale – we failed to factor in its effect on the underlying loan and security and consider the Provisions within the Law as to contracts..

 

s.42 (4) LPA 1925 – If the subject matter of any contract for the sale or exchange of land

 

(i) is a mortgage term and the vendor has power to convey the fee simple in the land, or, in the case of a mortgage of a term of years absolute, the leasehold reversion affected by the mortgage, the contract shall be deemed to extend to the fee simple in the land or such leasehold reversion.

 

(ii) is an equitable interest capable of subsisting as a legal estate, and the vendor has power to vest such legal estate in himself or the purchaser or to require the same to be so vested, the contract shall be deemed to extend to such legal estate

 

(8) A vendor shall not have any power to rescind a contract by reason only of the enforcement of any right under this section

 

(9) This section only applies in favour of a purchaser for money or money’s worth

 

Apple

[applecart]

We failed to consider and factor in that after after a transfer or sale, the Borrower has a right to be informed – either by virtue of s.136 LPA 1925 or by a notice being entered into the register to show the interests of other parties – where this is not so… then:

 

s.43 - LPA 1925 Rights Protected By Registration

 

(1) where a purchaser of a legal estate is entitled to acquire the same discharged from an equitable interest which is protected by registration as a pending action, annuity, writ, order, deed of arrangement or land charge, and which will not be over-reached by the conveyance t him, he may not withstanding any stipulation to the contrary require -

 

(a) that the registration shall be cancelled, or

(b) that the person entitled to the equitable interest shall concur in the conveyance;

 

and in either case free of expense to the purchaser

 

(2) Where the registration cannot be cancelled or the person entitled to the equitable interest refuses to concur in the conveyance, this section does not affect the right of any person to rescind the contract.

 

 

Apple

[applecart]

Hi Dave

 

You provided and I accept that the charge between Originator and Borrwer was created by virtue of s.87 LPA 1925.

 

But, we failed to consider this:

 

The Originator by way of MSA and other supporting documents, soon after the creation of the loan to borrowers under s.87 LPA 1925 SELLS and transfers all or part of his rights and powers to the loan and/or the collateral security to an SPV for 'money's worth.

 

We then failed to consider and factor in:

 

The Trust is created and for all intent and purpose – A.N.OTHERS Trust is a Bond or Debenture Trust.

 

The Originator is a Bare Trust with Agency Type Agreement and retains his name on the Title for the benefit of the real owner (the SPV) and other beneficiaries.

 

We then failed to consider and factor in:

 

The trust is one that is formed to meet the strict regulation of the Irish and/or London Stock Exchange.

 

The SPV is not required to register his ownership of title at HMLR, - regulation provides that he need only register a charge at Companies House.,

 

We went on to fail and consider to factor in:

 

The SPV’s charge at Companies House is his proof of Legal ownership with ‘title to sue’ (over-riding interest)

 

We then failed to consider and factor in:

 

The form of a Bond or Debenture Trust is an important element – it provides all the elements necessary to provide a conduit-pipe for interest and principal payments from the Originating mortgage company to the variety of individual investors – whilst at the same time providing a ‘watchdog’ for the investors interests whose name is on the title (the originator – reliant on s.58 retains ‘title to sue’ at HMLR).

 

We then failed to consider and factor in if s.33 LPA 1925 applies in the circumstances:

33. Application of Pt. I. to personal representatives.

 

The provisions of this Part of this Act relating to [F1trustees of land] apply to personal representatives holding [F1land in trust], but without prejudice to their rights and powers for purposes of administration.

 

We then failed to consider and factor in:

 

That s. 34 (2) LPA 1925 allows a maximum of 4 joint tenants in land. The formation of a Bond or Debenture Trust is a means of avoiding this restriction.

 

“(2) Where, after the commencement of this Act, land is expressed to be conveyed to any persons in undivided shares and those persons are of full age, the conveyance shall (notwithstanding anything to the contrary in this Act) operate as if the land had been expressed to be conveyed to the grantees, or, if there are more than four grantees, to the four first named in the conveyance, as joint tenants [F1in trust for the persons interested in the land]:

 

Provided that, where the conveyance is made by way of mortgage the land shall vest in the grantees or such four of them as aforesaid for a term of years absolute (as provided by this Act) as joint tenants subject to cesser on redemption in like manner as if the mortgage money had belonged to them on a joint account, but without prejudice to the beneficial interests in the mortgage money and interest.”

 

We then failed to consider and factor in LPA 1925 s 34 (3) & (4):

 

“ (3) A devise bequest or testamentary appointment, coming into operation after the commencement of this Act, of land to two or more persons in undivided shares shall operate as a devise bequest or appointment of the land to F2. . . the personal representatives of the testator, and . . .(but without prejudice to the rights and powers of the personal representatives for purposes of administration) [F3in trust for the persons interested in the land].

 

[F4(3A) In subsections (2) and (3) of this section references to the persons interested in the land include persons interested as trustees or personal representatives (as well as persons beneficially interested).]”

 

Apple

[applecart]

"141 An equitable mortgagee has no legal estate and no legal right to the mortgage land. As such he has no inherent right to possession, although that can be varied by the deeds or by permission of the mortgagor or the appointed receiver or by court order; see generally Fisher & Lightwood paragraph 19.6

 

142 Equally as Fisher & Lightwood shows again in relation to the mortgage debt, an equitable assignee of the covenent to sue needs to give notice under section 136, otherwise he needs to sue in the name of the original mortgagee or join him; see paragraph 17.3

 

He Concluded -

 

145 For all of those reason, it seems to me to be quite clear that the enforcement of the charge remains in the Claimant as registered proprietor by virtue of it remaining as registered proprietor and by virtue of the provisions of the AA itself which intended the same to happen.

 

146 Accordingly, even if the AA confers an equitable interest on CMS3, or constitutes it an equitable chargee it does not matter. They intended, and the LRA provisions confirm, that the Claimant remains the registered proprietor for all purposes.

 

147 Accordingly, there is nothing in the Defendants claim based on Title to Sue. I now go to deal with the next head Misrepresentation/Collateral Contract."

 

As if to prevent any future misunderstanding he said.....(Your emphasis}

 

"138 Now this all makes sense. It means that the Defendants need only deal with the registered chargee and no one else. Anything else would be a nonsense."

 

In giving consideration to s.88 LPA 1925 (as just 1 factor for consideration) - this provision provides that once the Lender has sold his interest a 'domino' effect occurs - The LAW clearly states that - when an Originator exercises his express power of sale under s.101 LPA 192 - the effect of s.88 LPA 1925 is supposed to be recognised by law to 'merge' and 'extinguish' the original agreement between the Originator and the Borrower AND provides that the 'title to sue' is vested in the SPV (purchaser)

 

Apple

[applecart]

Hello Apple

 

Where did you find the above information ?

 

The trustee is the owner of the property at law

The Beneficiary is the owner of the property in equity

 

Dave

 

Hi Dave

 

from: Professor Paul Matthews - read about him here: http://www.withersworldwide.com/people/paul-matthews

 

and here is a link to the information he provides on bare trusts:

 

http://www.kcl.ac.uk/depsta/law/students/grad/llm/study/trust_law/resources/llm_int_comp_trust_bare_trust_0506.pdf

 

Apple

[applecart]

Hello Apple

 

I will be honest with you, following your refusal to attach the A.N.OTHER Mortgage Sale Agreement on the basis that you felt that it would be unfair for the lender, it was my intention to no longer take an active part in this discussion. There seemed very little benefit in discussing the meaning of a document I had not read and you refused for very dubious questionable reasons not to post on this thread.

 

That has left a somewhat bad taste in mouth.

 

I have given (it was my choice) a considerable amount of my spare time in an attempt to further this discussion on what I consider to be a very interesting but extremely straight forward topic.

 

Your posts today have only served to help me make up my mind to now, after I have responded to some of the points you have made today, to no longer participate in a discussion that appears to now involve the splatter gun quotation of irrelevant information and legislation to the extent that I have read your posts today and I am just left wondering 'what ?'

 

You throw irrelevant sections of legislation around like confetti at a wedding.

 

No offence is in anyway intended by the above.

 

I will now respond to some of the points you have raised and then withdraw from what has been turned into a pointless discussion.

 

Regards

 

Dave

 

It all leaves a bad taste in my mouth too - Let it be said, your time is appreciated - the post has attracted a number of 'views' in the short time that it was raised by IMS - which I take for granted means that this is a topic that is of interest to many Borrowers and others...

 

I am personally grateful that you have responded - and I am hopeful that we can reach 'common ground' in the interest of those Borrowers who's interest in this topic has attracted nearly 40,000 views on a thread similar to this..... not to mention the previous thread on this topic that has since been 'closed'.

 

It has to be said............. it is not an easy task to come up with the likely objections that a Borrower may rely (justly or unjustly) to defend possession of their homes.

 

There is a class action in the USA by borrowers against lenders, there is the banking scandal here, and recently I heard that HSBC - one of our most respected banks is being investigated for money laundering ........ It is not my place to judge.....

 

The reports do not serve the financial industry well - the trust is gone or going, it appears that every little thing that a lender does is under scrutiny...

 

so, like I say... between us, we can go some way to provide and overcome any fears that Borrowers may have with regard to their mortgage loans in the knowledge that we have given due regard to any likely concerns.

 

So, Thank you for your time and agreeing to once more consider the additional factors in good faith.

 

Apple

[applecart]

Hi Dave

 

I also apologise for the 'confetti' scattergun approach of my posts - it is not intentional - Land law is complex.

 

I have presented the likely 'WHY NOT's and you have provided (admirably I might say) the 'WHY IT IS SO'

 

That's a fair balance or as 'fair' as it is likely to be - don't you think?

 

Apple

[applecart]

Just quickly Dave,

 

you mentioned that s.101 LPA 1925 relates to the express/statutory right to sell the property....... can you advise quickly the effect of s.114 LPA 1925 if any?

 

Thanks

 

Apple

[applecart]

In Four Maids v Dudley Marshall [1957] 1 ch 317 Harman stated:

 

"... They all assumed that it involved som kind of default on the part of the mortgagor. The mortgagor may go into possession before the ink is dry on the mortgage unless there is something in the contract, express or by implication, whereby he has contracted himself out of that right. He has the right because he has a legal term of years in the property or its statutory equivalent. If there is an attornment clause he must give notice. If there is a provision that, so long as certain payments are made, he will not go into possession, then he has contracted himself out of this rights.

 

Apart from that possession is a matter of course.... it has become a very fashionable form of relief because, owing to the conditions now prevailing, it is desired to realise a security by sale, vacant possession is almost essential where, therefore, the mortgagor is in occupation, a summons for possession is taken out and no other relief is sought, and where the mortgagee is in a position to exercise his power of sale, that is all the help he requires from the court.......

 

...and I see no equitable grounds for thinking that such a right would bear unfairly on the mortgagor if, as in this case, possession cannot be used as a mere stepping stone to a sale with vacant possession unless and until some event occurred which makes the power of sale available to the mortgagee. Until such event occurs, the right to possession can only be exercised to protect the security, not as a means of enforcing it. As soon as his power of sale becomes available to him, the mortgagee should certainly be free to exercise his right to possession unless he has most clearly bound himself not to do so.

 

In the present case the availability of the power of sale does not depend on som default under the mortgage. It could arise upon any one of a number of contingencies outside the mortgagors control which could happen at any time before the contractual date for redemption..."

 

Apple

[applecart]

On the Authority in 'Four maids' and the relevant legislation in the LPA 1925 - I interpret that a legal mortgage gives the mortgagee a legal estate in possession - he is entitled subject to any agreement to the contrary to take possession of the mortgaged property as soon as the mortgage is created- even if the mortgagor is not guilty of default.

 

The mortgagee may go into possession before the ink is dry on the mortgage.

 

Legal Chargees have the same right by virtue of s.87 (1) LPA 1925.

 

To further the point made - s.88 LPA 1925, refers to a time when a Lender has gone into peaceful possession and exercised his right to sell - to provide the effect of this section of the law.

 

Apple

[applecart]

It should not be overlooked, in Dave's post he confirms the interpretation with regard to the Borrowers rights to title and the Lender's right to title - they are 2 separate estates and 2 separate fee simples (freeholds)

 

This is important - because if the lender sells his estate (ie his estate and his fee simple)...... logically, it should leave the Borrowers title intact with a right to retain possession of the property itself.

 

s. 95 LPA 1925

 

Obligation to transfer instead of re-conveying, and as to right to take possession.

 

(1) Where a mortgagor is entitled to redeem, then subject to compliance with the terms on compliance with which he would be entitled to require a reconveyance or surrender, he shall be entitled to require the mortgagee, instead of re-conveying or surrendering, to assign the mortgage debt and convey the mortgaged property to any third person, as the mortgagor directs; and the mortgagee shall be bound to assign and convey accordingly.

 

(2) The rights conferred by this section belong to and are capable of being enforced by each incumbrancer, or by the mortgagor, notwithstanding any intermediate incumbrance; but a requisition of an incumbrancer prevails over a requisition of the mortgagor, and, as between incumbrancers, a requisition of a prior incumbrancer prevails over a requisition of a subsequent incumbrancer.

 

(3) The foregoing provisions of this section do not apply in the case of a mortgagee being or having been in possession.

 

You will remember that it is s.95 (4) LPA 1925 that is the lenders inherent right to exercise a right to possession without court intervention - s. 95 (3) is important - it advises that if the lender has exercised its right under s. 95(4) then these rights of mortgagors in s.(1) and (2) are lost

 

So, if all a lender did, was originate the mortgage, make it's money via the investment markets - then forego the property - Borrowers would remain 'clouded' - but when important legislative rights are being 'clouded' over to the extent that homes are being taken as well..... is it any wonder that Borrowers want to know 'WHY'?

 

 

Apple

[applecart]

I must be onto something....... : 0

 

Dave, I presume..... having provided for the debate..... the distinction that there ARE 2 distinct separate estates created - 1 of which belongs to and is owned by the lender and the other - which is owned and belongs to the borrower - has removed his posts.

 

Non the less, what he did provide was the authority in Pender v Paragon - the distinction provided by Dave gives light to the 'smoke' and 'mirrors' alleged by 'Carmen Butler' to have been used by Lenders as to their substantiating alleged 'right' to possession by virtue of holding a 'Title to Sue'..... Does 'holding' a 'Title to sue' mean the same as having a 'right to possession'?

 

Apple

[wfspayback]

'Does 'holding' a 'Title to sue' mean the same as having a 'right to possession'

 

Part 55 - Possession Claims,

 

(55.2) relates to a possession claim brought by a mortgagee. In a mortgage by legal charge, being the usual form of mortgage since 1925 and the only form of mortgage permitted under the Land Registration Act 2002, the mortgagee is the party registered as the owner of that legal charge.

 

The title to sue you refer, is the right to sue for possession of the mortgagee. After all, the proceedings are possession proceedings.

[applecart]

'Does 'holding' a 'Title to sue' mean the same as having a 'right to possession'

 

Part 55 - Possession Claims,

 

(55.2) relates to a possession claim brought by a mortgagee. In a mortgage by legal charge, being the usual form of mortgage since 1925 and the only form of mortgage permitted under the Land Registration Act 2002, the mortgagee is the party registered as the owner of that legal charge.

 

The title to sue you refer, is the right to sue for possession of the mortgagee. After all, the proceedings are possession proceedings.

 

 

It is common knowledge that LRA 2002 s.58 (1).. is 'conclusive' and grants a right to possession.

 

Against this, I posted a Power of Attroney of A.N.OTHER to confirm that 'for good, and valuable consideration...' - so as to provide interested parties with detail as to the difference between Paragon's transaction document leading the court to conclude that the sale was yet to be completed and A.N.OTHER's that confers that a sale has actually taken place.

 

Against this, I posted information as to trusts, nominees, and bare trusts etc etc....

 

Whilst the difference may appear 'subtle'............... as 'subtle' as it may appear.....after a sale is evidenced..... the rights to possession can and do change.

 

Apple

[applecart]

Examine the extract from 'Harman' again..........

 

In Four Maids v Dudley Marshall [1957] 1 ch 317 Harman stated:

 

"... They all assumed that it involved some kind of default on the part of the mortgagor. The mortgagor may go into possession before the ink is dry on the mortgage unless there is something in the contract, express or by implication, whereby he has contracted himself out of that right. He has the right because he has a legal term of years in the property or its statutory equivalent. If there is an attornment clause he must give notice. If there is a provision that, so long as certain payments are made, he will not go into possession, then he has contracted himself out of this rights.

 

Apart from that possession is a matter of course.... it has become a very fashionable form of relief because, owing to the conditions now prevailing, it is desired to realise a security by sale, vacant possession is almost essential where, therefore, the mortgagor is in occupation, a summons for possession is taken out and no other relief is sought, and where the mortgagee is in a position to exercise his power of sale, that is all the help he requires from the court.......

 

...and I see no equitable grounds for thinking that such a right would bear unfairly on the mortgagor if, as in this case, possession cannot be used as a mere stepping stone to a sale with vacant possession unless and until some event occurred which makes the power of sale available to the mortgagee. Until such event occurs, the right to possession can only be exercised to protect the security, not as a means of enforcing it. As soon as his power of sale becomes available to him, the mortgagee should certainly be free to exercise his right to possession unless he has most clearly bound himself not to do so.

 

In the present case the availability of the power of sale does not depend on som default under the mortgage. It could arise upon any one of a number of contingencies outside the mortgagors control which could happen at any time before the contractual date for redemption..."

 

It would appear that after a sale, a lender seeks possession of the property itself as a means of 'securing' the security, but has no right to enforce it...

 

Another 'subtle' difference that can effect the 'title to sue' and the 'right to possession' ............... that appears un-noticed thus far.....

 

Apple

[wfspayback]

Securitisation is very straight forward and extremely simple to understand. It is only made to appear to be mysterious or confusing by those that want it to be so.

 

To put it in plain English, the borrower gives the lender a mortgage by way of legal charge.

 

The mortgage is given by the borrower to the lender in the form of a legal charge.

 

This is why the borrower is the mortgagor (the giver of the legal charge) and the lender is the mortgagee (the receiver of the legal charge).

 

The mortgage is also a proprietary interest in the mortgaged property because the mortgagee acquires rights to take possession in the mortgaged property in the event of some breach of the loan contract and/or to sell that property.

 

In relation to mortgages of land governed by s.85 of the LPA 1925, the mortgagee acquires both rights of possession at common law and rights of sale under statute.

 

The mortgagee can only be changed as a result of registration. Again in plain English the lender is the mortgagee and will remain the mortgagee until the time the any sale is completed by registration and another party, be it another lender or an SPV becomes the registered owner of the mortgage by way of legal charge.

 

It is really that simple. There is no need for any interpretation, translation or personal opinions. However, I am sure that will not deter more being expressed ;-)

 

It is what it is.

[applecart]

Yep, Dave more or less said the same thing...and there are a wealth of Lender activists who visit the forums to promote the same ideology....

 

However..... this 'discussion thread' is also as it is .... : )

 

SCRUTINY is also as it is,

 

There are of course those that see no issue with their lender..... and happily sit back and accept that the Lender can sell on the mortgage debt ..... as they sit back and blindly allow their homes to become the property of a Trust for the benefit of investors who feed off their hard earned cash each month... that's all well and good : )

 

I'm not sure that the scenario above is what consumers in the main bargained for... Not when they are finding, that the ultimate goal of the Lender is to foreclose on the Trust property for it's own personal gain and they are left with nothing........but, as you say... it is as it is : )

 

Oh, and your right..... the discussion and the information to assist borrowers decide for themselves as to what the true position is.... will continue : )

 

Apple

[wfspayback]

Looks like you have this thread confused with the last post wins thread in the Bear Garden

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?268780-Last-Post-Wins-Version-2&p=3932072#post3932072

 

Last post does not win here. ;-)

 

Common law and Case law could not be anymore clearer on this matter.

[applecart]

LOL..... that's funny... I like it.... see... look what you've gone and done now..... you made me smile.... maybe I needed to lighten up a bit............. : )

 

But, No.. we are not looking at 'the last post wins' here... so, back to the seriousness of the matter......This is NOT the Bear Garden, This is a discussion thread on Mortgages being securitised.

 

There is no dis-respect to the authority in Pender or the case law that derived from it or indeed the common law that applied IN THAT CASE........

 

I have moved on from Pender.... We are looking at A.N.OTHER....who has executed a 'power of attorney' that is distinctly different...

 

Apple

[applecart]

In a previous post.. I begged the question thus: does 'Title to sue' mean the same as having a 'right to possession'?

 

My interpretation is that it doesn't - and this is my interpretation only.......it is not founded......but...

 

Borrowers and commentators continually confuse 'assignments' and 'sales' and the legislation that applies to each different type of transaction.

 

If you 'assign' your rights without notice to the Borrower, then, I interpret that you retain Legal title - s.136 LPA 1925 tells Borrowers,that without notice then it is an equitable transaction only.

 

If you 'sell' your rights without notice to the Borrower - you sell both legal and equitable title - s.88 LPA 1925 tells Borrowers that without notice, the fee simple (freehold) and the debt merge to extinguish the mortgage with a duty to divest title.

 

A.N.OTHER's Power of Attorney shows that 'for valuable consideration....' - coupled with the MSA - this denotes that a sale occurred...

 

It follows in terms of interpretation only ..... that ...... if you have sold the legal right...... the legal right being the one that grants the right to possession...... you have also sold the right to possession...with an outstanding duty to divest yourself of the title.

 

As we know, title is retained.....so, looking at A.N.OTHER's POA...it says at '2' - to exercise all the powers exercisable by the Seller by reason of its remaining for the time being the registered owner or hertable creditor at the Land Registry'i....

 

My interpretation of this section of the POA is that it is agreed between A.N.OTHER and the Seller that it does not matter to the buyer that the seller keeps its name on the title, the buyer has 'all the powers exercisable by the seller'

 

 

Again, this may not be the be all to end it all, property law is complex...and of course, these are merely my interpretations... But, again, this interpretation may go some way to provide Borrowers with a more equal footing when it comes to protecting their homes from possession

 

Apple

[applecart]

Let's not overlook how it is the Lender right to sell the mortgage debt comes about in the first place....

 

LPA 1925 s.101(6) 'The power of sale conferred by this section includes such power of selling the estate in fee simple or any leasehold reversion as is conferred by the provisions of this Act relating to the realisation of mortgages.'

 

Nor, the lenders right to enter into possession conferred by virtue of LPA 1925 s.95 (4) 'Nothing in this Act affects prejudicially the right of a mortgagee of land whether or not his charge is secured by a legal term of years absolute to take possession of the land, but the taking of possession by the mortgagee does not convert any legal estate of the mortgagor into an equitable interest.'

 

Nor 'Harman' in Fourmaids v Dudley...

 

This points me to interpret that there is common law and case law that may provide an enhanced equal footing between Lenders and Borrowers when a sale of the mortgage can be evidenced - Clearly, without evidence of a sale, I interpret that non of what I post will make any difference to Borrowers - Borrowers must first 'evidence a "sale"'.

 

 

Apple

[applecart]

How Do you Evidence A Sale?

 

I work from the angle that before your look to evidence a 'sale', you need to understand something about why it is that lenders jump through all the hoops that they do to get your mortgage in the first place - why they were happy to do 100% mortgages, no deposit deals, no proof of income, self cert mortgages etc etc etc.... This was to lure you in, to encourage you to buy a house, dratt... take two or more - it was not a problem.... why? because it would seem the objective was never about the Borrower - it was about the amount of money they stood to make on the money markets.....

 

Money markets are strictly regulated - to trade asset backed securities, you need to prove that you own the rights to the property/asset that you are trading - this is the security that investors rely on and will want to make sure is in place before they invest (I'm simplifying it here).. they want to know that if the trader goes bankrupt that their investment is protected (i.e bankruptcy remote etc etc - again I am simplifying here)

 

The Prospectus is a regulatory instrument

The Mortgage Sale Agreement is a regulatory instrument

The Power of Attorney is a regulatory instrument

 

In fact all and every document quoted in the Prospectus is party to Regulation and must be made available for public inspection whilst the trade/notes are available for investment....( I may have over simplified here)

 

Non the less, the point is, if you secure any of the above documents, you can be assured that they are reliable - and if you can get your hands on a document called 'Admission Notice' available for download from the Stock Exchange website (try the Irish Stock Exchange www) this will confirm the date that the assets backed securities started trading... and confirm and back up the finding that a sale has occured...

 

An Admission Notice looks like this:

 

Company Name: Irish Stock Exchange

Headline: Main Market Notice

 

REPORT OF THE BOARD OF THE IRISH STOCK EXCHANGE

 

ADMISSION NOTICE

 

Irish Stock Exchange

28 Anglesea Street

Dublin 2

 

Date xxxx

 

The board of the Irish Stock Exchange approves the admission of the undermentioned securities to listing on the Official List and trading on the Main Market of the Exchange

 

 

A N OTHER

 

USD xxxxxxxx Date xxxxxxx linked notes due XXXX Trance 5

 

It will then go on to list A N OTHERS Notes that have been admitted to market

 

Apple

[Pegasus Galaxy]

I have posted the following elsewhere in response to similar claims

 

There is no real merit in the often repeated and misunderstood argument that in some way securitisation of a mortgage debt impacts upon the possession right of the original lender.

 

There are two elements to what you would appear to refer to as a mortgage:

 

Firstly, there is the loan, given to you the borrower by the lender. This loan creates a debt with the lender. In common law the lender is allowed to sell this debt to a third party, unless there is an express term within the agreement that prevents such a sale. This sale would take place as an equitable assignment, meaning that the legal title to the debt remains with the lender and the beneficial interest, which is the repayment of the debt is passed to the third party, in this case a Special Purpose Vehicle (SPV).

 

Statute – s.136 of the Law of Property Act confirms that an assignment can be legal (absolute). However, to be a legal assignment, the borrower must receive notice of that assignment and the legal assignment is only effective at law from the date upon which the borrower received such a notice.

 

The effect of an equitable assignment is that any legal enforcement of that debt must be done so in the name of the original lender. If the SPV wanted to enforce the debt, it could only do so by joining the original lender in proceedings. However, once a borrower receives notice of the assignment – the assignment is a legal assignment and as the assignee the SPV can start proceedings in its name.

 

To be clear, the above only relates to the actual debt. You should also bear in mind that possession proceedings is not classed as the enforcement of the mortgage debt, rather it is in regard to the possession right of the lender as a result of a ‘mortgage by way of legal charge’.

 

Secondly, it is a common misconception that a borrower applies for a mortgage and that a lender gives a mortgage to a borrower. In fact the lender gives the borrower a loan and in return, it is the borrower that gives the lender a mortgage. This is a very important point and goes to the root of your argument. For the avoidance of doubt the borrower is the mortgagor and the lender is the mortgagee.

 

Remember, possession is enforcement of the ‘mortgage by way of legal charge’ given to the lender by the borrower and is not enforcement of the mortgage debt itself. This significant point was confirmed in Paragon Finance Plc v Pender & Anor [2005] EWCA Civ 760 (27 June 2005). Lord Justice Jonathan Parker at 116 said-

 

“As to Mr Page's reliance on section 136 of the Law of Property Act 1925, that too is in my judgment misplaced. He fails to distinguish between the right to sue at law for the mortgage debt and the proprietary interest created as security for its repayment. Section 136 applies only to the former.”

 

Returning to the right of possession of the lender – When you applied for the loan to buy your home, as security you gave a legal charge to your Lender. This legal charge encompasses a number of rights granted to the lender by you the borrower, in exchange for money. These rights can be found and are detailed in part III of the Law of Property Act 1925.

 

Once granted by the borrower to the lender, the charge itself becomes an item of property that is owned by the lender. The lender is free to sell (dispose) of the legal charge as it sees fit. In the case of securitisation the charge is sold in equity to a Special Purpose Vehicle (SPV). As the sale takes place in equity and not at law, the legal title to the charge is retained by the lender and any possession proceedings would have to take place in the name of your lender. For the sale to be effectual at law rather than in equity, the disposition of the charge must be completed by registration. This is confirmed by s.27 of the Land Registration Act 2002.

 

In this Country we have the Land Registry. In addition to keeping records of the owners of property (land/buildings), it also maintains records of the charges registered against each property and who owns each charge. The register itself is conclusive evidence of the legal title of both property and of the legal title of the legal charges.

 

The registered owner of the legal charge – being the named owner of the charges register has the right to possession of your property. This is a right you granted to the lender when you applied for a loan and gave a ‘mortgage by way of legal charge’ to your lender.

 

In the case of securitisation, until the sale to the SPV is completed by registration, so that it take effect at law rather than in equity, the Lender will correctly be recorded as the legal owner of the legal charge. Therefore, any and all possession proceedings must by law be in the name of the lender. If the Special Purpose Vehicle wanted to exercise the right of possession, it must do so in either the name of the lender or jointly with the lender. It has no legal right to exercise the right of possession in its own name.

 

Once the sale (disposition of the charge) has been completed by registration, it takes effect at law and the Special Purpose Vehicle will become the registered owner of the legal charge and it is then and only then able to exercise the right of possession in its own name.

 

I understand and appreciate that the arguments in regard to the effect of securitisation can be attractive to anyone in financial difficulties. However, they are based upon a complete lack of understanding of the legalities involved. By way of an example, any reliance of events in the USA is misplaced. In the states the borrower signs a ‘note’, this note is then passed between companies each time the mortgage is sold. It is only the financial institution that holds that note and can demonstrate ownership that can seek possession. In the UK, we have the Land Registry and the Charges Register which acts as conclusive proof of ownership of the legal charge.

 

There have been a number of cases at virtually all levels within our judiciary in regard to the arguments of mortgage securitisation and its effect upon the possession rights of lenders. On each and every occasion it is confirmed that the lender as the registered owner of the legal charge, retains the right of possession, granted by the borrower to the lender.

 

To enforce the mortgage debt and seek a monetary judgement, until a notice of assignment has been given to the borrower – any proceedings must be in the name of the lender.

 

To enforce the legal charge and seek a possession order, until the sale has been completed by registration – any proceedings must be in the name of the lender.

[applecart]

I have posted the following elsewhere in response to similar claims

 

There is no real merit in the often repeated and misunderstood argument that in some way securitisation of a mortgage debt impacts upon the possession right of the original lender.

 

There are two elements to what you would appear to refer to as a mortgage:

 

Firstly, there is the loan, given to you the borrower by the lender. This loan creates a debt with the lender. In common law the lender is allowed to sell this debt to a third party, unless there is an express term within the agreement that prevents such a sale. This sale would take place as an equitable assignment, meaning that the legal title to the debt remains with the lender and the beneficial interest, which is the repayment of the debt is passed to the third party, in this case a Special Purpose Vehicle (SPV).

 

Statute – s.136 of the Law of Property Act confirms that an assignment can be legal (absolute). However, to be a legal assignment, the borrower must receive notice of that assignment and the legal assignment is only effective at law from the date upon which the borrower received such a notice.

 

The effect of an equitable assignment is that any legal enforcement of that debt must be done so in the name of the original lender. If the SPV wanted to enforce the debt, it could only do so by joining the original lender in proceedings. However, once a borrower receives notice of the assignment – the assignment is a legal assignment and as the assignee the SPV can start proceedings in its name.

 

To be clear, the above only relates to the actual debt. You should also bear in mind that possession proceedings is not classed as the enforcement of the mortgage debt, rather it is in regard to the possession right of the lender as a result of a ‘mortgage by way of legal charge’.

 

Secondly, it is a common misconception that a borrower applies for a mortgage and that a lender gives a mortgage to a borrower. In fact the lender gives the borrower a loan and in return, it is the borrower that gives the lender a mortgage. This is a very important point and goes to the root of your argument. For the avoidance of doubt the borrower is the mortgagor and the lender is the mortgagee.

 

Remember, possession is enforcement of the ‘mortgage by way of legal charge’ given to the lender by the borrower and is not enforcement of the mortgage debt itself. This significant point was confirmed in Paragon Finance Plc v Pender & Anor [2005] EWCA Civ 760 (27 June 2005). Lord Justice Jonathan Parker at 116 said-

 

“As to Mr Page's reliance on section 136 of the Law of Property Act 1925, that too is in my judgment misplaced. He fails to distinguish between the right to sue at law for the mortgage debt and the proprietary interest created as security for its repayment. Section 136 applies only to the former.”

 

Returning to the right of possession of the lender – When you applied for the loan to buy your home, as security you gave a legal charge to your Lender. This legal charge encompasses a number of rights granted to the lender by you the borrower, in exchange for money. These rights can be found and are detailed in part III of the Law of Property Act 1925.

 

Once granted by the borrower to the lender, the charge itself becomes an item of property that is owned by the lender. The lender is free to sell (dispose) of the legal charge as it sees fit. In the case of securitisation the charge is sold in equity to a Special Purpose Vehicle (SPV). As the sale takes place in equity and not at law, the legal title to the charge is retained by the lender and any possession proceedings would have to take place in the name of your lender. For the sale to be effectual at law rather than in equity, the disposition of the charge must be completed by registration. This is confirmed by s.27 of the Land Registration Act 2002.

 

In this Country we have the Land Registry. In addition to keeping records of the owners of property (land/buildings), it also maintains records of the charges registered against each property and who owns each charge. The register itself is conclusive evidence of the legal title of both property and of the legal title of the legal charges.

 

The registered owner of the legal charge – being the named owner of the charges register has the right to possession of your property. This is a right you granted to the lender when you applied for a loan and gave a ‘mortgage by way of legal charge’ to your lender.

 

In the case of securitisation, until the sale to the SPV is completed by registration, so that it take effect at law rather than in equity, the Lender will correctly be recorded as the legal owner of the legal charge. Therefore, any and all possession proceedings must by law be in the name of the lender. If the Special Purpose Vehicle wanted to exercise the right of possession, it must do so in either the name of the lender or jointly with the lender. It has no legal right to exercise the right of possession in its own name.

 

Once the sale (disposition of the charge) has been completed by registration, it takes effect at law and the Special Purpose Vehicle will become the registered owner of the legal charge and it is then and only then able to exercise the right of possession in its own name.

 

I understand and appreciate that the arguments in regard to the effect of securitisation can be attractive to anyone in financial difficulties. However, they are based upon a complete lack of understanding of the legalities involved. By way of an example, any reliance of events in the USA is misplaced. In the states the borrower signs a ‘note’, this note is then passed between companies each time the mortgage is sold. It is only the financial institution that holds that note and can demonstrate ownership that can seek possession. In the UK, we have the Land Registry and the Charges Register which acts as conclusive proof of ownership of the legal charge.

 

There have been a number of cases at virtually all levels within our judiciary in regard to the arguments of mortgage securitisation and its effect upon the possession rights of lenders. On each and every occasion it is confirmed that the lender as the registered owner of the legal charge, retains the right of possession, granted by the borrower to the lender.

 

To enforce the mortgage debt and seek a monetary judgement, until a notice of assignment has been given to the borrower – any proceedings must be in the name of the lender.

 

To enforce the legal charge and seek a possession order, until the sale has been completed by registration – any proceedings must be in the name of the lender.

 

Hi Ya

 

Your contribution is appreciated.

 

Apple

[applecart]

I think at this juncture it is prudent to provide a distinction between a 'assignment' of a debt and a 'sale' of a debt:

 

This link from the HMRC helps....... : http://www.hmrc.gov.uk/manuals/vatfinmanual/vatfin3215.htm

 

I've copied and pasted some of what it says below:

 

"Sale of a debt

 

The sale of a debt is a financial transaction, whereby the purchaser acquires ownership of debts from a creditor, at a nominal sum to the face value of the debts. The purchaser assumes all the rights and obligations of the original creditor and all legal and beneficial or equitable interest passes to the buyer to whom full title and risk is transferred.

 

The purchaser of a debt portfolio may either use an in-house operation to effect recovery or contract with one or more debt recovery agencies for use of their collections services as described in VATFIN3255. Depending on the contractual agreement with the original creditor, the purchaser may sell on all or part of the debts acquired.

 

The purchaser of a debt portfolio has no right of recourse to the seller for un recovered debts except where debts are deemed to be irrecoverable prior to the date of purchase e.g. deceased customers. In some cases the sale contract may allow the purchaser to return these accounts and gain a return of the relevant purchase amount.

 

Unless there is a chargeback agreement for unsupported balances, the purchaser does not return uncollected debts to the original creditor - the purchaser will write off the debts and take the loss.

 

Debt purchase companies may also offer contingency debt collection services as described in VATFIN3255.

 

In the sale of a debt, all legal and beneficial or equitable interest passes to the buyer to whom full title and risk is transferred.

 

We are currently waiting the judgment of the Court in a German ECJ reference concerning GFKL Financial Services AG (C-93/10) which questions whether the sale (purchase) of defaulted debts constitutes a service for consideration and an economic activity on the part of the purchaser of the debts even if the purchase price is not based on the face value of the debts. If it is an economic activity would it be exempt from VAT? If it is exempt from VAT, is the recovery of the debts exempt from VAT, as part of a single service or as an ancillary service, or taxable as a separate service? This guidance will be updated as necessary to reflect the outcome of this referral.

 

Assignment of a debt

 

For purposes of this guidance we distinguish the assignment of a debt from a sale of a debt, in that with an assignment only the equitable interest is passed to the assignee and the assignor retains the legal interest in the debt and any liability to obligations arising from the original contract. Often it will not be possible for the assignee to sell that which has been assigned.

 

The use of the term ‘assignment’ can cause misunderstanding and it is essential to be quite clear as to what is actually happening in any particular set of circumstances. If doubts arise, the VAT Deductions & Financial Services Team should be consulted."

 

It's best to read the full info from the link to draw ones own conclusions.

 

Apple