HELP - Challenging a Mortgage based on Unfair Terms in Consumer Contracts Regulations

KevReedUK

My wife and I find ourselves in what is probably a fairly unique, and painfully unenviable situation.

We are looking to challenge the validity of a Mortgage Deed drawn up by HSBC by using the "Unfair Terms in Consumer Contracts Regulations (1999)"

More specifically, the clause we are looking to challenge is the one that has given her ex husband the right to more than quadruple the borrowing over the last 10 years without her knowledge, let-alone her consent.

We are currently facing possession proceedings, as and when the local court gets around to setting a date (probably fairly imminently) and as such have a limited time to deal with this.

We have asked for assistance via all the usual channels (Citizens Advice, Community Legal, etc) and no-one has been prepared to voice an opinion as it appears (please correct me and link to records if I am wrong on this) that such a challenge has never been made in court in relation to a mortgage before, and as such, no-one wants to go out on a limb.

We did approach the Financial Ombudsman Service, only to be told that, whilst they understood and identified with our position, they were not empowered to enforce such legislation and as such couldn't help.

To summarise the situation:

My wife and her ex-husband were already divorced at the time the Deed was signed (Divorced 1993, Deed signed December 2000).

My wife and her ex-husband were both names as mortgagors, but only her ex-husband was named as the borrower.

A consent order pre-dating the Deed awarded 2/3 of the equity in the property to my wife, with the remainder to her ex-husband.

The total borrowing as at the point of the Deed being signed was (as far as we can ascertain) around the £17.5k mark (although we cannot back this up with documentary evidence as the Bank refuses to furnish us with such information).

At least 2 further advances have followed, and we have only become aware of these as a result of documents within the court claim-pack hinting at their existence.

The bank was aware of their DIVORCED status at the time the Deed was signed, a fact further reinforced by their differing addresses.

Not only has further borrowing been allocated to the account since the Deed was signed (now at around the £100k mark), but the T's and Cs have also been changed without my wife being informed.

The Deed was signed in a Bank office, with the signatures of my wife and her ex husband witnessed by a bank official (although in light of the time that has passed, it is unclear whether this is the same official who signed on the Bank's behalf).

My wife was NOT a party to the negotiations of even the original Mortgage Deed. Her only involvement was in signing it (as was necessary due to the presence of her name appearing as that of a Joint Tenant in Common on the Title Deed to the property).

The clause that the bank has relied on throughout states (in laymans terms) that the secured debt is "all lending offered to the borrower, past present or future, with or without your knowledge or consent" (basically: today, you're agreeing to securing £17.5k against the property, but the moment you leave that door your ex-husband can increase that to whatever we are prepared to lend him and the first you'll find out about it is when he stops paying and we try to kick you out of the house you're living in!).

The entirety of what the bank considered to be its duty of care was to put a one-page summary on the front of the Deed (with a one-line note at the bottom stating that you should consult a solicitor before signing it), but this one-pager was not given to either party to take away, nor was the Deed itself. A quick five-minute meeting was my wife's only involvement in the case, during which time, the bank official stated that all the two of them (my wife and her ex-husband) needed to do was sign the Deed and initial the one-pager. They were not encouraged to take the time to read the documents (bear in mind that the Deed and it's Ts and Cs ran to a pretty heavy packet of papers).

The bank were clearly aware of my wifes lack of financial savvy (she held her current account with them, and indeed, they had made it clear that her credit rating didn't allow her to be named as a borrower) and yet they did not excercise any perceivable duty of care in protecting this financially vulnerable customer from the decision she made in agreeing to sign (unfortunately, the signing of the Deed significantly pre-dates the FSAs TCF initiative, so we can't call upon that to challenge this (to the best of my knowledge)).

At the time of the Deed being signed, my wife's only income was state benefits (a fact that the bank could clearly have seen, had they looked at her account (something I have little doubt that they would have done).

Since my wife and I met nearly three years ago, I have been trying to help her to figure out exactly where she stands legally and financially in relation to the property, however HSBC have consistently stated they they are under no obligation to furnish us with any information as she is "merely the mortgagor, not the borrower" (basically, we're happy to take your home, but we won't tell you much about why!).

Needless to say, the ex-husband hasn't paid anything towards the mortgage since he lost his job in late 2008.

I have considered assisting my wife in submitting a Subject Data Access Request under the terms of the Data Protection Act to force the Bank to provide the additional information we would need to compile a suitable defence, but feel that this would be a waste of time (not to mention the allowable charge of up to £10), as all they would furnish us with would be those documents that SPECIFICALLY refer to my wife (i.e. the original Mortgage Deed) of which we already hold a copy.

The basis on which I am looking to challenge it is that this clause fails to meet ANY, let alone all, of the tests that the Regulations lay down for a fair clause. I have also discovered a case (Lloyds v Bundy - 1974) that has a similar basis and was found AGAINST the Bank, but the differences may be enough to render it irrelevant.

We have been before the court twice for possession hearings so far, but on both occasions the case was adjourned due to the involvement of the FoS, and as such the grounds for challenging the matter that I have laid out above have as yet remained unheard, let-alone ruled on.

As you can probably tell, a fairly unique case, but one which is causing us both (not to mention her children) a lot of stress and anxiety. We have no budget for a solicitor, let alone a barrister, and are therefore appealing for any help or guidance that can be offered on a pro-bono or goodwill basis.

It is worth noting that I have NO legal training whatsoever, and my background in finance is seriously limited (spent some time working in a (competitor) bank's call-centre - hated the SALES culture... say no more!). Because of this ALL help will be gratefully received.

Two things we would like to make clear
1) one thing we are not looking to do is challenge the validity of the whole mortgage. My wife signed for the initial borrowing and, as such, we feel that that WAS fair(ish) and therefore would make us appear opportunist and out to gain an unfair advantage (not that we would complain if this is the ultimate outcome, of course!). We only wish to have the further advances struck off the account.
2) another thing we are not looking to do is to intentionally stir up some sort of a media circus for two main reasons. Firstly, we do not wish to risk prejudicing the case, and secondly, we are normal people with normal children (two of whom live with us in the property) who we would rather not have exposed to such a situation.

Any suggestions via the site, if you would prefer to discuss specifics off-site, please leave contact details in your reply (PM me if you prefer).

Many thanks in advance.

Kevin

ILW

I would be going after the solicitor who handled her divorce.

whatyadoinsucka

good luck mate, you'll need it..

did hsbc not send out any paperwork when these remortgages happened, my joint mortgage, although i could make decisions on the mortgage via the hsbc mortgage centre, they required signed documents. even to reduce the term and payments..

The divorce seems to have not been handled well, and no lose ends have been tied off. and that could be persued.

Burridge60

I think with a house at stake and repossession you do need professional legal advice as you seem to have stated all the reasons why this should be overturned. The FS Ombudsman has said no way so you are only left with legal action of your own or a good defence in court on D day which is best served by legal representation.

Trollfever

We are looking to challenge the validity of a Mortgage Deed drawn up by HSBC

Assuming that a standard HSBC mortgage deed was signed, this would have been drawn by the most expensive legal experts that HSBC could employ and would take into account all previous case law.

Move on.

Thrugelmir

Why wasn't the consent order enforced?

DVardysShadow

KevReedUK wrote: »

• I have considered assisting my wife in submitting a Subject Data Access Request under the terms of the Data Protection Act to force the Bank to provide the additional information we would need to compile a suitable defence, but feel that this would be a waste of time (not to mention the allowable charge of up to £10), as all they would furnish us with would be those documents that SPECIFICALLY refer to my wife (i.e. the original Mortgage Deed) of which we already hold a copy.

If this goes to court, you can use the civil procedure rules to gain discovery of anything relevant which the bank holds. You need to do your own research on how this works.

opinions4u

Looks like the original divorce solicitor messed up.

You could hire another solicitor to sue. You could pursue a complaint via the Law Society.

It won't stop the repossession though.

purple_haze

If I understand the OP correctly, the divorce was in 1993 and the mortgage was executed in 2000, so I don't see how the divorce lawyer might be at fault.


There was a well known case in 1993 called Barclays Bank v O'Brien which set out requirements for banks to ensure that people such as the OP's wife obtained independent legal advice before entering into a mortgage such as this. As she apparently was not given this advice, there is a potential defence to the bank's claim. It is a complex area of law and the OP should see a solicitor. Some solicitors , if they considered the case a strong one, might offer to act under a conditional fee agreement as there would be the opportunity of recovering costs from the bank if the defence were successful.


But the mortgage was executed over ten years ago and the memory fades over time. Since the O'Brien case in 1993 banks have been scrupulous in ensuring wives in these situations are given every opportunity to obtain independent legal advice. I can't see a situation described by the OP having got through a bank's internal procedures.

Thrugelmir

opinions4u wrote: »

Looks like the original divorce solicitor messed up.

You could hire another solicitor to sue. You could pursue a complaint via the Law Society.

Why? Consent order was obtained at time of divorce.

All other events are subsequent. Without any reference to the solicitor concerned in the divorce settlement being involved.

opinions4u

Thrugelmir wrote: »

Why? Consent order was obtained at time of divorce.

All other events are subsequent. Without any reference to the solicitor concerned in the divorce settlement being involved.

Yup. Looks like I'm wrong .