Is My Mortgage Agreement Unenforceable

Angry_Cat

Hello Everyone

Please don't judge me, I am in a difficult situation and just looking for a way out that still leaves me my home.

I have a mortgage with SPML. I was sold the mortgage by an advisor in late 2007. Due to an injury I am forced to work less hours and I am not struggling to meet my mortgage payments.

I have recently found out on another site that SPML do not own my mortgage. It has been sold to another company called Eurosale through something called securitisation.

When I applied for the mortgage I was not told it would be sold and I have heard nothing from SPML or Eurosale.

I have read elsewhere that this means that SPML has lost the right to repossess my house. If I was to get any further into arrears would this mean I won't lose my home. I must admit, stopping payments is very tempting and the extra money would come in very useful.

Thanks for reading

AC

Angry_Cat

In America lots of possessions have been stopped because of securitisation. If it happens there, why not here.

Angry_Cat

these are some of the points I have read that prove it

"
I don't seek to complicate matters here but my interpretation is that when the originating lender sells the mortgage debt to the SPV, the relationship between the Borrower and the Originating Lender changes and the underlying mortgage agreement is affected - Here's how I have come to this conclusion.... prior to the sale the Borrower's right to Redemption was intact.....after the sale, the Borrowers right to redemption is lost.....but the borrowers equitable right to redemption remains. The Borrower relies heavily on this equitable right to redemption is very important to the Borrower. It is the right to pay off the mortgage debt and take ownership of the property. As I understand it, the case in Horsham (although not an Authority) did go someway to consider the impact on a borrowers equitable right to redeem the mortgage....

The text I highlighted above, states "(subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice"— [my emphasis

I interpret that it is the SPV that is the 'assignee'.... I go on to interpret that if the Borrower is unaware that the 'right to redeem' has been converted due to the sale of the mortgage debt to the SPV without notice that unwittingly, his 'right to redemption' converts to an 'equitable right to redeem' (which is essentially what the failure to notify the Borrower invokes).

The Borrowers 'equitable right to redeem' is an 'equity' and can be interpreted within this piece of legislation as 'equities'.

I interpret that this piece of Legislation protects the Borrowers equity (which will not only refer to the equitable right to redemption but also equity in the property earned during the term of the mortgage along with any deposit that may have been paid to the Originating Lender)

At this point, it would be unfair to lose sight of the link that the sale of the mortgage debt makes with s.6 TLAT 1996 as I endeavor to interpret s.136 LPA 1925 and the effect of failure to notify the Borroiwer of the Sale - which is the relationship has changed thus:

We have a borrower who has not been notified of the sale of the mortgage debt so that the equitable rights to redemption are protected(s.136 LPA 1925)
We have an Originating Lender who has sold the mortgage Debt to an SPV, who cannot pass any of the Legal right to possession to the SPV because of the equitable rights of the Borrower
We have an originating lender who for consideration has lost all right to possession because unless he secures some proof of being an appointed trustee, is a bare/custodian trustee who would have no substantiating rights to possession of the property (s.6 TLAT 1996)

Against this, and the interpretations kindly submitted by Dave, I conclude that consideration as to the 'conclusiveness' of s.58 (1) LPA 1925 remains to be done, because non of these pieces of Legislation, as yet, in their own right cause the conclusiveness of s.58 to be affected to deny the originating Lender possession of the property at this juncture...... and I think Dave is right to set out the Judges words thus:

"It is common ground 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
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"

Given this.... it is not that we have to 'agree' or 'disagree' .... what it means is that because the allegation is that it remains an over whelming view that the Lenders right to possession is not legal in some way.....(e.g the posts on the , the building distrust of Lenders and a class action in the US recently undertaken) that the current balance of probability remains on equal footing with legislation being interpreted to provide arguments for and against.... I do not however conclude that a borrowers argument is as yet proven either way right now......"

Angry_Cat

And the killer point

A.N.OTHERS power of attorney states is here, again I apologise for the length but it is again, copied and pasted as is excluding Seller, Issuer or Bank actual names:

FORM OF SELLER POWER OF ATTORNEY

THIS POWER OF ATTORNEY is made as a deed on xxxxx

BY

A.N.OTHER (seller)

IN FAVOUR OF:

ISSUER

And

A BANK

THIS DEED WITNESSETH that, for good and valuable consideration and as security for the respective interests of the ISSUER and the TRUSTEE under the Transaction Documents and the performance of the Seller’s obligations under the Transaction Documents, the SELLER IRREVOCABLY APPOINTS each of the ISSUER, the TRUSTEE and any RECEIVER and/or ADMINISTRATOR appointed from time to time in respect of the ISSUER or the ISSUER’s assets (each an “ATTORNEY) severally to be its true and lawful attorney (with power to sub delegate) and to be the SELLER’s agent and in the Seller’s name to do any act, matter or thing from time to time which any Attorney, in its absolute discretion, considers appropriate for the protection or preservation of that Attorney’s interest in the LOANS and their COLLATERAL SECURITY, the Insurance Contracts and other assets or which ought to be done by the SELLER under the covenants, undertakings and provisions contained in the mortgage Sale Agreement including (without limitation) any or all of the following:

1 To exercise the SELLERS RIGHTS, POWERS and DISCRETIONS under the LOANS AND THEIR COLLATERAL SECURITY including the right to FIX THE RATE OF INTEREST PAYABLE under the LOANS in accordance with the terms theredf;
2 to exercise all the powers exercisable by the SELLER BY REASON OF ITS REMAINING FOR THE TIME BEING REGISTERED OWNER OR HERITABLE CREDITOR AT THE LAND REGISTRY, the Registers of Scotland or the Registers of Northern Ireland or, as the case may be, MORTGAGEE OF ANY OF THE MORTGAGES and in particular, but without prejudice to the generality of the foregoing, to make further advances to Borrowers;
3 to DEMAND SUE for and receive monies due or payable under the LOANS AND THEIR RELATED COLLATERAL SECURITY or RELATED RIGHTS;
4 upon payment of such moneys or any part thereof, to give good receipts and discharges for the same and to execute such receipts, releases, re-assignments, retrocessions, surrenders, instruments and deeds as may be requisite or advisable;
5 to execute and deliver LEGAL TRANSFERS, ASSIGNMENTS, ASSIGNATIONS AND DECLARATIONS of TRUST as contemplated under the mortgage Sale Agreement in each case as the ISSUER or the TRUSTEE (as the case may be) consider necessary (with, in either case, such amendments as may reasonably be required to such transfers, assignments, assignations or declarations of trust and supplemental declarations of trust of ASSETS ORIGINATED BY THE SELLER and the subject of the Mortgage Sale Agreement as the ISSUER or the TRUSTEE may require and notices of all such transfers, assignments, assignations and declarations of trust in each case in such form as the ISSUER or the TRUSTEE may require;
6 to exercise any other rights, discretions and powers under The Mortgage Sale Agreement and for that purpose to execute, sign and do any deeds, documents, acts or things and;
7 to do every act or thing which the SELLER is OBLIGED TO DO under the Mortgage Sale Agreement or which any ATTORNEY may otherwise consider to be appropriate, proper or expedient for fully and effectually VESTING OR TRANSFERRING THE INTERESTS OF EACH OF THE ASSETS SOLD under the Mortgage Sale Agreement/or the SELLERS’s ESTATE RIGHT AND TITLE therein or thereto in the ISSUER and/or the TRUSTEE and their SUCCESSORS IN TITLE or other person or person ENTITLED TO THE BENEFIT THEREOF (as the case may be) in the same manner and as fully and effectually in ALL RESPECTS AS THE SELLER COULD HAVE DONE.
Every ATTORNEY shall have the power by writing under its hand (or, if the ATTORNEY is not an individual, under the hand of an officer of the ATTORNEY) from time to time to appoint a substitute who shall have power to act on behalf of the SELLER as if that substitute shall have been originally appointed as an attorney by this deed (including, without limitation, the power of further substitution) and/or to revoke any such appointment at any time without assigning any reason thereof.

The SELLER HEREBY AGREES AT ALL TIMES HEREAFTER TO RATIFY AND CONFIRM WHATSOEVER ANY ACT MATTER OR DEED ANY ATTORNEY OR SUBSTITUTE SHALL LAWFULLY DO OR CAUSE TO BE DONE UNDER OR CONCERNING THIS DEED.

The SELLER HEREBY DECLARES THAT THESE PRESENTS HAVING BEEN GIVEN FOR SECURITY PUPOSES AND TO SECURE A CONTINUING OBLIGATION, THE APPOINTMENTS MADE BY IT UNDER THIS DEED SHALL BE IRREVOCABLE …..

Angry_Cat

The above is from elsewhere
"Within the MSA of A.N.OTHER - under the heading of power of attorney it states:

A.N.OTHER, hereby irrevocably and by way of security for the performance of its obligations under this Agreement appoints the ISSUER, the TRUSTEE and ANY PERSON NOMINATED for the purpose by the ISSUER or the TRUSTEE, and each of them individually, TO BE IT’S ATTORNEY as set out in Clause x (A.N.OTHER/TRUSTEE Power of Attorney) of the Closing Arrangements Deed, to execute or do any deed, assurance, agreement, instrument or act which A.N.OTHER has undertaken to execute or do under the covenants, undertakings and provisions contained in this Agreement and A.N.OTHER

I interpret this to mean that A.N.OTHER has for a consideration - transferred all it's legal and equitable rights to the Borrower's home by way of a 'sale' with a Power of Attorney in favor of the ISSUER.

On it's face........... provides a distinct difference between A.N.OTHER and Paragon equity sale by Paragon and any 'purported sale of equity' by A.N.OTHER.

Granted, I do not draw this conclusion as the be all and end all to this matter, but it does appear that without more.....Borrowers may be justly showing signs of concern"

Angry_Cat

Could this be the next big thing after unfair current charges and PPI.

Banks have shown that they can't be trusted, just think LIBOR and HSBC and Standard Chartered recent dealings

Annisele

Sorry, but I'm afraid that you won't get anywhere at all with that argument.

If SPML's rights have been transferred to Eurosale, then that probably does mean that SPML has lost the right to repossess your house. However, that right will have been transferred to Eurosale - so Eurosale will have the right to repossess.

On the other hand, if the purported transfer of SPML's rights to Eurosale was ineffective, then SPML will still be able to repossess. The likely outcome then would be that both side's lawyers would work out how to remedy the defect, and then they'd just transfer the rights again.

It might be a good idea for you to head over to the Debt Free Wannabee board and post a statement of affairs (see stickies) - they're a helpful bunch over there.

Jimbo1976

The best way of keeping your home is to keep paying your mortgage. SPML is entitled to sell your loan. Your mortgage will be enforceable.

That said whoever has bought the loan needs to treat you fairly if you are in financial difficult. You should speak to them to make sure they are aware of your situation. Have you looked at what benefits you are entitled to?

Radiantsoul

I cannot see this going anywhere, but you probably need a solicitor if you really believe you have a case. A very good one.

I believe the case you are citing is Paragon Finance vs Pender. You will see that the court of appeal decided that a

"Securitisation arrangements, widely adopted by mortgage lenders as an inexpensive method of fund raising, did not have the effect of preventing the mortgagee, as registered proprietor of the legal charge and who retained legal ownership of it, from the right to claim possession of the mortgaged property."

somethingcorporate

A non-starter I am afraid. All sorts of finance products are packaged up and sold on, the debts remain enforceable. There are companies out there that just buy up debts to then look to get something out of them (DCAs for instance).

You are clutching at straws, there is no way this means you would get a free house.

holly_hobby

Ultimately, the mortgagor is looking to cease payments, and hoping to prevent repossession, based on the detail that the origanal mortgagee no longer holds beneficial ownership (it being sold and transferred with the debt to a 3rd party - the Assignee ).

Ulitmately, the right to possess would be presided over by a Judge (as it is in all cases of repossession), and unless there were evidence of the Assignee did not treat the Mortgagor fairly e.g giving time and assistance to remedy the arrears, or the assignment was incorrectly executed - then a Judge would grant the possession order of the Claimant.

What the OP is after here, is to not pay anymore mortgage yet retain beneficial ownership of the property (ie be able reside and dispose of it at will). The issue you have is that to do so, the lenders 1st charge would have to be removed with LR, now obviously the Assignee isn't about to do this without redemption (not withstanding that you have also continued payments post assignment, which you allege you were unaware of), so it would be a court that determines the right of possession (or legal and equittible rights of the assignee).

And I don't believe a UK Judge would in essence agree that as the original lender is no longer the beneficial owner, the assignee (if correctly administered) is prevented from benefiting under the agreement (as thats the underpinning basis of the purchase/sale and Assignment of Debt). Thereby saying ... No Mr Mortgagor - post assignment, you have absolutely no legal obligation to pay any more mortgage repayments, and to you Mr Assignee - you have no beneficial rights (despite lawful assignment), so please remove the 1st charge on the property and kiss it and your rights goodbye.

If the assignment was not correctly executed, which involves notification of the tsf to the debtor, then the beneficial ownership simply remains with the OC (or original mortgagee in this case) - now if the OC and its corporate group are no longer trading (which doesn't mean taken over/absorbed by a larger Firm), and there is effectively no OC to refer back to, that may throw a spanner in the works re a possession order.

But, I like the others, see little chance of sucess, however there is nothing to stop you funding a legal team and taking this to Court - whereby if held in High Court (which I suspect it would be), the determination of the Judge will act as a precedent.

My heartfelt advice .... save your money .... and just maintain your mortgage as you agreed to do so when you entered into the arrangement.

Holly