Possession order from Preferred Mortgages/Acenden

[p.j]

would like to say hi to everyone and sorry to but in on the thread which i have been following with great interest.i have got a possession order for next month from preferred mortgages for missing payments which i will pay before it gets to court.

I did a sars to find out about everything on my account with these people,got everything back regarding this so i can dispute there rip off charges.what i don't understand is on the sars they say they are not obliged to tell me who the lender is and also they are not obliged to tell me about the title deeds also what i don't understand is preferred are doing the possession order i get letters from acenden too my payments show on my statements to them as spml on my deeds preferred have got there name on there as a charge yet in the sars they are named as the servicer.so who is my lender?preferred as i see it have no right to possession?

[TimetogoRAM]

would like to say hi to everyone and sorry to but in on the thread which i have been following with great interest.i have got a possession order for next month from preferred mortgages for missing payments which i will pay before it gets to court.

I did a sars to find out about everything on my account with these people,got everything back regarding this so i can dispute there rip off charges.what i don't understand is on the sars they say they are not obliged to tell me who the lender is and also they are not obliged to tell me about the title deeds also what i don't understand is preferred are doing the possession order i get letters from acenden too my payments show on my statements to them as spml on my deeds preferred have got there name on there as a charge yet in the sars they are named as the servicer.so who is my lender?preferred as i see it have no right to possession?

 

 

Hi mate, A SAR is a request for ALL the info the lender has on you. They have an obligation to divulge this information to you and you need to make a complaint to the independent complaints commissioner (ISO). Google ISO to find out how to complain.

 

As for Preferred Mortgages aren't they a New Zealand mortgage provider that went bust in 2007? Did Acenden mortgage services take over your mortgage? You should have received a letter on who took over your mortgage debt and who now has a charge over your property ie the title on your deed.

 

Have you had a copy of your deed? If not apply to HMLR (land registry) for £11. Check the deeds validity. Is it signed/sealed by your lender? When did you enter into your mortgage? This thread may assist you further in your fight against repossession.

[p.j]

this is what i dont understand acenden are the ones who have took over from capstone acended always send letter about arrears or account stuff but preferred are doing the possession order.

 

this is what it says : details of any agreements between lender/broker/packager written or underwritten,in relation to commisions or any other payments this is not data relating to the account older and as such preferred mortgages limited does not consider its self under an obligationto provide pusuant of the data ?

 

also says same in relation to loan ?i thought this to that preferred had gone but obviously not.

 

this is what it says on my short title deeds not full one but they have this on there minus the numbers i removed.

 

2 (20.01.2005) Proprietor: PREFERRED MORTGAGES LIMITED (Co. Regn. No. 3******) of Deeds Admin Team, St. Johns Place, Easton Street, High Wycombe, Bucks HP11 1NL and of {DeedsAdmin@capstonemortgageservices.co.uk{. thats under charges.

[IS IT ME?]

P.J

Firstly get a copy of the deed from the Land reg

secondly, Preferred mortgages are not the ones who own your mortgage!

Thirdly All payments and agreements ARE a part of the SAR and should have been given to you.

Fourthly When you go to court inform the Judge that they do not own your mortgage and refuse to give you that information.

I will do some digging and come back to you.

[p.j]

hi is it me thanks for the advice i will get on this asap.

should i write to preferred tell them to disclose who my lender is ? where does acenden come into this then because they are both writing to me ?

[honeybee13]

Hello there.

 

I've started a new thread for you so that you can have specific advice about your problem, rather than getting mixed up with one on a slightly different topic. Please continue to post your requests for help on this thread.

 

My best, HB

[Sappho54]

Preferred will be the originating company with whom you got the mortgage in the first place. This mortgage has been bundled with many others and sold on, within months of you signing up to the mortgage. ie it has been securitised. Acenden are mortgage administrators who work for both Preferred and on behalf of the true owners of your debt. Acenden don't own your mortgage. Acenden will be the ones taking action against you but will do so in the name of Preferred despite the fact that Preferred no longer own your mortgage. There is no point attempting to challenge the "who owns what" issue, it is too complicated. Lots of things flow from this. For one thing, you cannot go to the financial ombudsman and complain about the conduct of Acenden. Acenden act on behalf of the administrators - who don't really exist except as a name and some directors.

[IS IT ME?]

No that's not correct Sappho54,

The mortgage sale agreement will CLEARLY show that the lender has SOLD its interest in this mortgage with FULL TITLE going to the bond holders.

What you need to do is get them to admit they have sold the mortgage on

Then ask for a director of the company to sign to say they still OWN it ( this you will never get as no one will be willing to do it)

Then inform the court of this fact.

Then the action will stop.

[Sappho54]

Firstly, the mortgage sale agreement will be bundled with 10000 others and it is not likely to be made available. If I am wrong, and someone has actually managed to get their MSA from this company, I am happy to be corrected. I can't get mine, and as far as I know I have no legal right to demand it and it won't be in a SAR.

The company that was the originating company would not have transferred the title until such time as the debt was registered with the Land Registry, this may not have happened yet. My debt was registered in 2010, four years after it was sold by the originating company and in that four years this company, which presumably had been paid out in full for my debt, attempted to repossess in its name on two occasions. It is important to be clear that no-one to date has won a court action on the basis of who owns the debt, certainly not in a county court. Again, if anyone knows otherwise ....... Advising that this is a quick fix in a repossession hearing is dangerously misleading and could lead to tragedy.

 

You will be facing Acenden's solicitors in court. They are not the owners and do not claim to be. Preferred will have sold the loan, but if they have not registered the sale yet then they are the ones who can still repossess. You have checked the Land Registry, if Preferreds name is still there, they still have equitable ownership of the loan and it is they who will be the claimant. If you got hold of a copy of the Mortgage Sale Agreement you could baffle a judge enough to get at least a postponement, but getting hold of it is the issue. Go and look at the very long thread from "applecart" on equitable and legal ownership of securitised debts, it is a minefield.

[IS IT ME?]

done it and did it before a judge so IT CAN BE DONE and if you really knew about this, no judge would grant an order knowing that the question of who owns the mortgage is in question.

It would clear say in the sale agreement FULL TITLE Guarantee which means they own nothing.

As for solicitors in court been there 3 times and won so that's no prob

[Sappho54]

Would you be prepared to disclose details? And were you the claimant or defendant? Did you take them to court and get the judge to set aside or were you defending a repo? Because you seem to be saying that you can get a MSA but only on the direction of the judge. However, you don't know what is in it until you receive it, so you wouldn't know before you went into court. Were you successfull in getting an MSA as a disclosure before the hearing date? And can you confirm that it is Acenden that you were dealing with?

[alisono]

Dear All,

 

This may or not help you.

 

I am in the same boat here, my mortgage sold to me in June 2007 from London Mortgage Company.

 

On my deeds at HMLR it states Southern Pacific Mortgage Ltd t/as London Mortgage Company.

After the whole debacle in 2010 when a letter came from Capstone and LMC saying my mortgage was now going to be administrated via Capstone, I started to ask a few questions.

 

1. I used to receive information from both parties LMC headed paper and Capstone so I got confused. I now get letters from SPML/LMC/Acenden which is even ore confusing.

 

2. I was then told that Capstone were changing their name to Acenden. I believe this as they had so many complaints about them to FSO & FSA

 

3. I found out that Amay Attita who used to work for Lehmans Brothers was in charge of Acenden and they were mortgage adminstrators for SPMLand PML s

o I did some digging the best I could.

 

4. My break through came when I recieved a notification on my buildings cover asking me to note SPML and a company called Eurosail as interested parties.

I asked Acenden who Eurosail were and was told verbally twice that they were Acendens bank account,

so I promptly refused stating Acenden's bank accounts had nothing to do with my mortgage or Insurance.

 

5. They have tried and gone for a repossesion now 3 times,

1st time I paid the a lump sum to stop,

2nd time they never turned up,

3rd time they turned up but before the hearing their solicitor said as I had been paying regular they would seek liberty to restore order, they did this,

 

this year I lost my job and had no income to pay my mortgage I informed them and have tried since may to agree an arrangerment, but they say no,

so the last 3 months I have just paid them with extra on top.

 

6. I compalined to them for yet another time, I asked them outright who owned my mortgage?

I believed that SPML who were now at a registered office that belonged to PWC the bankrupcy adminstrators for the disgraged Lehman Brothers

once did owned SPML and Preffered but they had told me (PWC) my mortgage had been sold and SPML only owned the title to my deeds.

 

7. On the 30th August in a letter Acenden admitted this to me, they told my mortgage had been pooled together and securtised with other mortgages

and the interested party was Eurosail-UK2007-6NC and they sent me a web link which actually show this and it has 250 pages of stuff I dont really understand.

And I havent yet found a solicitor who does either.

 

8. SPML still trade at companies house as above at an address that belongs to PWC they have 19 mortgages which 17 are satisfied

and 2 outstanding according to Companies House.

 

9. I am back at court next week for possession again so I am taking the advice of IS IT ME? and Applecart.

 

Hope this helps you. feel free to ask any questions.

[caro]

Dear All,

 

This may or not help you. I am in the same boat here, my mortgage sold to me in June 2007 from London Mortgage Company. On my deeds at HMLR it states Southern Pacific Mortgage Ltd t/as London Mortgage Company. After the whole debacle in 2010 when a letter came from Capstone and LMC saying my mortgage was now going to be administrated via Capstone, I started to ask a few questions.

1. I used to receive information from both parties LMC headed paper and Capstone so I got confused. I now get letters from SPML/LMC/Acenden which is even ore confusing.

2. I was then told that Capstone were changing their name to Acenden. I believe this as they had so many complaints about them to FSO & FSA

3. I found out that Amay Attita who used to work for Lehmans Brothers was in charge of Acenden and they were mortgage adminstrators for SPMLand PML so I did some digging the best I could.

4. My break through came when I recieved a notification on my buildings cover asking me to note SPML and a company called Eurosail as interested parties. I asked Acenden who Eurosail were and was told verbally twice that they were Acendens bank account, so I promptly refused stating Acenden's bank accounts had nothing to do with my mortgage or Insurance.

5. They have tried and gone for a repossesion now 3 times, 1 st time I paid the a lump sum to stop, 2nd time they never turned up, 3. time they turned up but before the hearing their solicitor said as I had been paying regular they would seek liberty to restore order, they did this, this year I lost my job and had no income to pay my mortgage I informaed them and have tried since may to agree an arrangerment, but they say no, so the last 3 months I have just paid them with extra on top.

6. I compalined to them for yet another time, I asked them outright who owned my mortgage? I believed that SPML who were now at a registered office that belonged to PWC the bankrupcy adminstrators for the disgraged Lehman Brothers once did owned SPML and Preffered but they had told me (PWC) my mortgage had been sold and SPML only owned the title to my deeds.

7. On the 30th August in a letter Acenden admitted this to me, they told my mortgage had been pooled together and securtised with other mortgages and the interested party was Eurosail-UK2007-6NC and they sent me a web link which actually show this and it has 250 pages of stuff I dont really understand. And I havent yet found a solicitor who does either.

8. SPML still trade at companies house as above at an address that belongs to PWC they have 19 mortgages which 17 are satisfied and 2 outstanding according to Companies House.

9. I am back at court next week for possession again so I am taking the advice of IS IT ME? and Applecart.

 

Hope this helps you. feel free to ask any questions.

 

What will you say if the judge asks if you've had the money alisono? Will you also use the methods which are tried and tested and known to prevent repossession?

[alisono]

I will tell him the truth, yes i mortgaged my house with London Mortgage Company but never knew they would sell mt mortgage 6 months later and then have to wait 6 years for them to tell me they had. I will also tell him i am happy to pay the company i now owe my debt to, but not SPML IR ACENDEN as they are ripping me off 6000 charges in 6 yeats mkbeyvtp pay

[alisono]

Sorry 6000 in 6 years and they dint even now own my debt.

[steampowered]

I think we are conflating a number of entirely separate issues together here.

You owe a debt under a loan agreement.

This debt is secured by a fixed charge against the property (known as a mortgage) and registered with HMLR.

 

There will be an express clause in your loan agreement allowing the bank to sell the debt

(and indeed they could most likely do this under common law principles even without this clause).

 

It is important to understand that selling the right to receive a debt is not necessarily the same thing as transferring the fixed charge secured against your property.

If in doubt about what the lender can do, carefully read your loan agreement.

 

If IS IT ME? is correct and there is some defect preventing the particular Claimant from enforcing the security you granted over the house (I personally doubt this),

that would not excuse you from having to make repayment under the debt.

 

Whether or not the owner of the debt is entitled to add charges is another separate issue and would need to be assessed against your loan agreement.

 

It is important to keep an eye on the end goal here and where you want to end up when the court proceedings have finished.

There is nothing unlawful or legally problematic about securitisation.

Objecting to the securitisation is not a strong defence.

[IS IT ME?]

Thank you but and here is the BUT If the lender sells the mortgage on they are PAID in full for it therefore as the JUDGE stated they do not have a DEBT, so therefore it comes to say if they do not own the debt because they have been paid who does, No judge can ask that or put an LIP in any way

You will find out if you look that ALL of these mortgages have terms which do not lower the rates but are locked in until the end.

We can all see what the banks and mortgage companies have got up to again and they only admitted that because they did not want the company looked into.

[steampowered]

I think there might be some confusion between three different scenarios.

• First, a lender can sell legal ownership of a debt.
  
• Second, a lender can enter into a contract with a third party where it promises to pass on any repayments.
  
• Third, a lender can appoint a third party to manage its interest and administrate the debt on its behalf (much like how you appoint your bank to hold your money for you in a current account).
  

Legal ownership only passes in scenario 1. Scenarios 2 and 3 are just contracts entered into by the lender.

Having done some googling, your original lender Southern Pacific Mortgage is a special purpose company set up by Lehman Brothers during the boom to hold residential mortgages. That company is already a securitisation vehicle which will hold nothing but mortgages, with mortgage payments paid out of the company as dividends to investors. My guess is that your mortgage was in fact never sold and was never subsequently securitised, I assume it is and was always held by SPM. Thus legal ownership never transferred.

 

SPM would have been set up to do nothing but hold the mortgages. Securitisation vehicles like SPM usually do not have any office space and there is usually a provision in their corporate documents prohibiting them from having any employees. London Mortgage Company was a Lehman entity. LMC would have been appointed to manage the mortgage on behalf of SPM (collect repayments, liaise with customers etc.) in exchange for a fee. I imagine that Accenden was appointed to replace LMC as the servicer when Lehman went bankrupt. All of this falls within scenario 3 ... Accenden don't own the mortgage they just service it.

 

It appears that Eurosail is an entity set up to invest in residential mortgages. Eurosail is a special purpose investment entity set up to facilitate investment into residential mortgages. Eurosail raises money by listing bonds on various stock exchanges. Bonds are basically an IOU with an interest rate attached. Eurosail then uses the money to purchase the right to receive payment on mortgages held by entities like SPM. The interest rate on the bonds is based on the predicted level of default on the mortgages. If SPM comes up with the goods, investors receive full repayment on the bonds. If default is higher than expected, investors do not receive full payment. The bonds can be sold at any time through the stock exchange. I imagine this is basically what the 250 page document says, it is probably a stock exchange listing document like a prospectus. If you are unsure give me the link and I'll explain it. You do not have any relationship with Eurosail ... Eurosail only has a relationship with SPM and a relationship with its investors. This falls within scenario 2.

 

The reason why SPM mortgages will have strict terms is because investors like certainty. Securitisations are carefully set up to remove any kind of risk which could affect returns, including interest rate risk (Eurosail will also have a hedging contract to guard against the increased defaults caused by any increase in the Bank of England base rate).

 

I'm making a huge number of assumptions here, but I would think legal ownership is still held by SPM. The contracts entered into by SPM with other entities are not really your concern. Am I right to think that SPM is the entity named on the claim form?

[applecart]

I think there might be some confusion between three different scenarios.

• First, a lender can sell legal ownership of a debt.
  
• Second, a lender can enter into a contract with a third party where it promises to pass on any repayments.
  
• Third, a lender can appoint a third party to manage its interest and administrate the debt on its behalf (much like how you appoint your bank to hold your money for you in a current account).
  

Legal ownership only passes in scenario 1. Scenarios 2 and 3 are just contracts entered into by the lender.

Having done some googling, your original lender Southern Pacific Mortgage is a special purpose company set up by Lehman Brothers during the boom to hold residential mortgages. That company is already a securitisation vehicle which will hold nothing but mortgages, with mortgage payments paid out of the company as dividends to investors. My guess is that your mortgage was in fact never sold and was never subsequently securitised, I assume it is and was always held by SPM. Thus legal ownership never transferred.

 

SPM would have been set up to do nothing but hold the mortgages. Securitisation vehicles like SPM usually do not have any office space and there is usually a provision in their corporate documents prohibiting them from having any employees. London Mortgage Company was a Lehman entity. LMC would have been appointed to manage the mortgage on behalf of SPM (collect repayments, liaise with customers etc.) in exchange for a fee. I imagine that Accenden was appointed to replace LMC as the servicer when Lehman went bankrupt. All of this falls within scenario 3 ... Accenden don't own the mortgage they just service it.

 

It appears that Eurosail is an entity set up to invest in residential mortgages. Eurosail is a special purpose investment entity set up to facilitate investment into residential mortgages. Eurosail raises money by listing bonds on various stock exchanges. Bonds are basically an IOU with an interest rate attached. Eurosail then uses the money to purchase the right to receive payment on mortgages held by entities like SPM. The interest rate on the bonds is based on the predicted level of default on the mortgages. If SPM comes up with the goods, investors receive full repayment on the bonds. If default is higher than expected, investors do not receive full payment. The bonds can be sold at any time through the stock exchange. I imagine this is basically what the 250 page document says, it is probably a stock exchange listing document like a prospectus. If you are unsure give me the link and I'll explain it. You do not have any relationship with Eurosail ... Eurosail only has a relationship with SPM and a relationship with its investors. This falls within scenario 2.

 

The reason why SPM mortgages will have strict terms is because investors like certainty. Securitisations are carefully set up to remove any kind of risk which could affect returns, including interest rate risk (Eurosail will also have a hedging contract to guard against the increased defaults caused by any increase in the Bank of England base rate).

 

I'm making a huge number of assumptions here, but I would think legal ownership is still held by SPM. The contracts entered into by SPM with other entities are not really your concern. Am I right to think that SPM is the entity named on the claim form?

 

Hi Steampowered;

 

I agree with you..... there is confusion here.....in fact....we are at a stage now; where the only reason for why any Borrower wants a copy of the securitisation documents is so that they can prove in a court of law that their mortgage was definitely party to the Sale of the 'purported' mortgage.....no other reason...

 

I have as sappho pointed out above dedicated an entire thread to 'breaking down' what 'securitisation' was and is all about.....(she is correct it was a minefield...but I got there in the end, I'm pleased to say)......to the extent that it is a fact that the whole process relies that the underlying deed between the Borrower and the ....let's call them 'the Originating Lender'............... remains un-executed by that Originating Lender.....Now, whilst that works for them......it is wholly unlawful in relation to the relationship said to have been created between the Borrower and the 'originating lender'.....

 

I'll tell you why.....it's quite simple.....

 

A) you cannot 'mortgage' registered land.

B) A deed must be duly executed before it can be presumed to be 'delivered'

 

Is It Me has successfully taken this approach forward and the proceedings were 'halted'.....an initial applicaton to the Chamber was minded to be 'struck out'......we re-presented.....the application was 'filed'... and has been responded to....the Response from the Lender ......is NO DEFENCE...

 

The Lender has since tried to get Is It Me to settle out of court........first asking him 'what do you want to settle this'..... then when told that Is It Me was not willing to bow to that ..... they offered that they would 'get rid of the arrears and drop the interest rate (such terms are not in Is It Me friends best interest; when the Chamber has grounds upon which it can rely to set a side the deed).....the offer from the Lender was understandably and wholly rejected.....

 

So, if you can say that there has ever been a time when a Lender has looked to 'settle out of court'....ever been a time when a lender has been put on the 'back foot'....then please advise....because that is the position...there is no 'confusion'....

 

This is the outcome so far.....this is after other threads (Ben's) said that a deed is 'unilateral'........

 

This is why, you will find that both Allisono and P.J are admittedly following the same route....

 

Hopefully this info will bring you bang up to date......and avoid any further confusion...

 

I do not of course look to take away from the information you post.....but we are dealing with 'securitisation' as being the issue per se...but, I mean you no offence when I simply say......we have truly moved on.... : )

 

 

Apple

[applecart]

meant to say 'not' dealing with securitisation per se (sorry - I am not fortunate enough to have any editing facilities)

[applecart]

What will you say if the judge asks if you've had the money alisono? Will you also use the methods which are tried and tested and known to prevent repossession?

 

Hi Caro

 

I have seen this question asked of Caggers before......

 

When a Lender is challenged with proving that he has a valid deed.....it is simply not relevant for a court to ask any Borrower 'did you take the money'....(that's more the kind of question HMLR use to justify retaining the 'mortgage' on the Borrowers registered estate)....all Judges will know that if there is no valid deed...the question of the money said to be loaned to the borrower is simply not enforceable in a court of Law....

 

The simple fact is....the deed is required to secure the borrowers indebtedness.... if it is 'void'....then whilst the indebtedness will be due....it will not be due by means of possession of the property.....unless the lender has a separate simple contract signed by both the Borrower and the Lender.....in cases where the mortgage has simply been originated for securitisation purposes...there will be no simple contract (agreement) and no speciality contract (deed) in evidence.....

 

Lenders know this to be the case....they know they are up the river without a paddle.....maybe if the lender had not been so hasty to circumvent the law....to make a packet on the stock market....he might have remembered to ensure his paperwork was in order with the Borrower first.....

 

so, no offence, but it is only then that the question you posed would make a whole lot more sense.....

 

Apple

[p.j]

our originator was regency mortgage limited then changed to preferred mortgage limited.capstone/acenden servicers..

[steampowered]

I agree that (1) whether securitisation invalidates a mortgage and (2) whether failure by the lender to sign a deed invalidates the mortgage are two entirely separate issues.

 

It is important that they do not get confused. A bank can fail to sign a deed of charge just as much as a securitisation special purpose vehicle. A securitisation special purpose vehicle can sign a deed of charge just as much as a bank.

[Jabba the hut]

I think we are conflating a number of entirely separate issues together here.

You owe a debt under a loan agreement.

This debt is secured by a fixed charge against the property (known as a mortgage) and registered with HMLR.

 

There will be an express clause in your loan agreement allowing the bank to sell the debt

(and indeed they could most likely do this under common law principles even without this clause).

 

It is important to understand that selling the right to receive a debt is not necessarily the same thing as transferring the fixed charge secured against your property.

If in doubt about what the lender can do, carefully read your loan agreement.

 

If IS IT ME? is correct and there is some defect preventing the particular Claimant from enforcing the security you granted over the house (I personally doubt this),

that would not excuse you from having to make repayment under the debt.

 

Whether or not the owner of the debt is entitled to add charges is another separate issue and would need to be assessed against your loan agreement.

 

It is important to keep an eye on the end goal here and where you want to end up when the court proceedings have finished.

There is nothing unlawful or legally problematic about securitisation.

Objecting to the securitisation is not a strong defence.

 

In terms of securitisation this may be of interest, in particular the rights of the lender to sell the charge and when it is paid in full by the SPV.

 

 

Land Law

 

By Kevin J. Gray, Susan Francis Gray

 

About the authors

 

Kevin Gray is a Barrister and Fellow of Trinity College, University of Cambridge. Hehas been a Professor of Law in the University of London and a Senior ResearchFellow at the University of Oxford.

 

Susan Francis Gray was for manyyears an Assistant Land Registrar, having responsibility amongst other thingsfor the registration of the Channel Tunnel project. She has also been a Senior Lecturer in Law at the University of Greenwich.

 

Transfer of mortgages

 

8.33 From the viewpoint of the lender a legal charge represents a valuable asset. During its life the mortgagee receives interest on the capital sum outstanding and is entitled to repayment of the capital itself either by instalments during the mortgage term (under a ‘repayment mortgage’) or as a lump sum at its end (under an ‘endowment mortgage’).

 

If the lender wishes to accelerate his realisation of the value represented by a mortgage charge, he is perfectly free, without any requirement of consent from the borrower, to sell the charge to a stanger. The disponee of the mortgage charge, having paid the market price for the security in question, thereafter collects all payments due under the mortgage.

 

In registered land, the disposition is effect using the prescribed Land Registry form (LRA 2002 s 25 (1); LRR 2003 r116). In order to take legal security the transferee must then complete by registration (LRA 2002 s27(3)(a), i.e. must apply to be registered in the charges register of the borrowers title as the new proprietor of the charge concerned (LRA 2002, sch 2,para 10), failing which the transferee holds only an equitable interest in the charge (see Paragon Finance plc v Pender (2005) ).

 

 

Paragon Finance Plc v Pender & Anor [2005] EWCA Civ 760 (27 June 2005)

 

109. In my judgment Mr and Mrs Pender's case on this issue is misconceived. It is commonground that Paragon, as registered proprietor of the Legal Charge, retains legal ownership of it. One incident of its legal ownership – and an essential one at that – is the right to possession of the mortgaged property. I can see no basis upon which it can be contended that an uncompleted agreement to transfer the Legal Charge to the SPV (that is to say an agreement under which, pending completion, the SPV has no more than an equitable interest in the mortgage) can operate in law to divest Paragon of an essential incident of its legal ownership. In my judgment as a matter of principle the right to possession conferred by the Legal Charge remains exercisable by Paragon as the legal owner of the Legal Charge (i.e. as the registered proprietor of it),notwithstanding that Paragon may have transferred the beneficial ownership of the Legal Charge to the SPV.

 

111.The only question then is whether the SPV should have been joined in the proceedings as an additional claimant. In my judgment, the answer to that question is plainly: No. On the assumption that the consideration for the transfer of the Legal Charge has been paid in full, Paragon has since retained its legal ownership of the Legal Charge as trustee for the SPV (see Whiteley v.Delaney [1914] AC 132 at 141 per Viscount Haldane LC). But it does not follow that in that situation the SPV, as the owner of the Legal Charge in equity, is a necessary party to the claim; and on the facts of the instant case joinder of the SPV is wholly unnecessary. There is, after all, no issue between the SPV and Paragon as to the exercise of the mortgagee's rights under the Legal Charge: indeed the SPV has, by virtue of the administration agreements, expressly authorised Paragon to exercise such rights on its behalf.

[steampowered]

Thanks Jabba the hut. I think the extracts you posted cover a slightly different situation, since in this case the lender did not sell the mortgage into the SPV. The lender was the SPV from the very start.

 

The extract from Paragon v Pender which you quoted confirms that it is permissible for a lender to sell its economic interest in a mortgage debt, and that in these circumstances the lender would still retain the right to enforce the charge without needing to transfer it. On that basis the fact that the original lender has been paid for its economic interest does not stop it from obtaining a posession order.