Is My Mortgage Agreement Unenforceable

DVardysShadow

BristolBob wrote: »

The "standing" article you quote belongs in the realms of administrative law.
Secondly, it is not a matter of "tort", but of contract...

The point was to go along with OP and to show that it didn't lead anywhere useful

BristolBob

DVardysShadow wrote: »

The point was to go along with OP and to show that it didn't lead anywhere useful

And? My point was to correct errors/misinterpretation...

SouthCoast

OP.

Please come back in about five years time when you have exhausted your arguments in the UK Courts.

DVardysShadow

BristolBob wrote: »

And? My point was to correct errors/misinterpretation...

You have done nothing to attempt to dissuade OP from his course of action. As such, your input might be described as lacking in utility.

BristolBob

DVardysShadow wrote: »

You have done nothing to attempt to dissuade OP from his course of action. As such, your input might be described as lacking in utility.

Without my "input" they may a) still be under the misapprehension that their argument was under the law of tort and not contract AND b) have started to investigate public law notions of locus standi.
I see utility in remedying basic misunderstandings over the area of law applicable to their case both for the OP and anybody reading for information. Sorry that you disagree, no offence was intended.

leveller2911

This thread reminds me of Monty Pythons dead parrot sketch.......,


"Its dead,its deceased,its extinct"

"No its not,its pining for the Fjords"

Angry_Cat

Pegasus you have not given consideration to the power of attorney given by the lender to the spv

The following is from Cag

Lord Justice Jonathan Parker :

“…..As Dr Eilis Ferran MA (presently Reader in Corporate Law and Financial Regulation at Cambridge University) points out in a book entitled 'mortgage Securitisation – Legal Aspects' (Butterworths, 1992) to which we were helpfully referred by Mr Ali Malek QC (for Paragon) in the course of argument, if the transfer of the mortgages is not completed by registration, the SPV acquires an equitable title to the mortgage but the transferor retains the legal title, albeit as trustee for the SPV (assuming, as will usually be the case, that the full consideration has been paid)….[my emphasis


The judge establishes here that the Lender is a 'trustee' for the SPV - and confirms that 'as will usually be the case that the full consideration has been paid'

So, what 'type' of 'trustee' does he mean? What 'type' of 'trustee' relationship exists - in the Pender case, for all intent and purpose on the evidence submitted the Administration Agreements 'appointed' Paragon as trustee were to ensure they retained the powers of an 'appointed trustee'.

Compare this type of 'appointed trustee' with a 'custodian trustee' or 'bare trustee' - what is the difference?


…In my judgment Mr and Mrs Pender's case on this issue is misconceived. 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…..

The Judge establishes that it was Paragon that registered the charge, sold the debt, but retained legal rights to possession because their admin agreement, secured this important right for them by evidencing that they were 'appointed trustees' after the sale

The Trusts of Land and Appointment of Trustee Act 1996 establishes the rights of 'appointed trustees'

Section 6: General powers of trustees.

(1) For the purpose of exercising their functions as trustees, the trustees of land have in relation to the land subject to the trust all the powers of an absolute owner.

(2) Where in the case of any land subject to a trust of land each of the beneficiaries interested in the land is a person of full age and capacity who is absolutely entitled to the land, the powers conferred on the trustees by subsection (1) include the power to convey the land to the beneficiaries even though they have not required the trustees to do so; and where land is conveyed by virtue of this subsection—

(a) the beneficiaries shall do whatever is necessary to secure that it vests in them, and

(b) if they fail to do so, the court may make an order requiring them to do so.

(3) The trustees of land have power to [F1acquire land under the power conferred by section 8 of the Trustee Act 2000.]

F2(4)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In exercising the powers conferred by this section trustees shall have regard to the rights of the beneficiaries.

(6) The powers conferred by this section shall not be exercised in contravention of, or of any order made in pursuance of, any other enactment or any rule of law or equity.

(7) The reference in subsection (6) to an order includes an order of any court or of the Charity Commissioners.

(8) Where any enactment other than this section confers on trustees authority to act subject to any restriction, limitation or condition, trustees of land may not exercise the powers conferred by this section to do any act which they are prevented from doing under the other enactment by reason of the restriction, limitation or condition.

[F3(9) The duty of care under section 1 of the Trustee Act 2000 applies to trustees of land when exercising the powers conferred by this section.]


So, how do I come to the conclusion that there are situations where this Act does not work in favor of the Lender in a position who has sold the mortgage debt, retained it's name on the title and collects your monthly money via an administrator and then seeks possession when you default on the loan?

Well, Look at "(6) The powers conferred by this section shall not be exercised in contravention of, or of any order made in pursuance of, any other enactment or any rule of law or equity".[/B so...... what does this mean? If Pender essentially says that Paragon by virtue of the admin Agreements were 'appointed trustees' - then, what about those lenders that cannot prove they remained 'appointed trustees' - Paragon is owned by Paragon PLC and bought and sold within the group- so, as a subsiduary of one and the same company - it spells sense that they 'kept it in the Company' so's to speak....

In my opinion, for a number of sub-prime lenders the position is quite different from Pender... why?... because Pender after the sale occurred were able to show evidence that they retained admin rights within which it must have clearly stated that they were 'appointed trustees' by Paragon PLC......

If the original lender does not remain as administrator for the SPV but instead outsources those duties, this does not mean that the original lender is not a 'trustee' - they are..... but they are not 'appointed' as in the meaning of TLAT Act 1996 s(1) there is a difference.....a trust is created... but not an appointed one....

As an un-appointed trustee, they become a trustee in equity or what is more commonly known as a 'bare' or 'custodian' trustee - these type of 'trustee' will find that it is s.6(6) of the TLAT Act 1996 that applies to them ..... their status is created by way of equity, not by way of appointment......unfortun ately rights to possession are excluded to custodian or bare trustees....put simply, "..powers conferred by this section shall not be exercised in contravention of, or of any order made in pursuance of, any other enactment or any rule of law or equity - so, where an appointed trustee has the right to possession for example..... a bare trustee does not]

…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…

The Judge given the evidence before him, found in favor of Paragon, and quite rightly to... but look carefully at what he actually says.. he says 'as a matter of principle'..... 'legal charge remains exercisable'.... 'notwithstanding that paragon "may" have transferred the benenficial ownership of the Legal Charge to the SPV' ... This could mean that he was not provided with any evidence to substantiate that the mortgage debt had actually been sold. ....B

Angry_Cat

also from CAG

Above, I outlined the TLAT Act 1996 and how I believe it worked in favor of Paragon to assist Paragon secure it's possession Order against the Pender's - Bare in mind, that it is the Law I am quoting and not 'opinion' - All interpretation of course is mine.

My research has led me to interpret that the period of time after the sale and purchase of the mortgage debt and when the sale is updated on the register at HMLR is called the 'registration gap' - My interpretation is that it is during this period of time that the relationship between the Borrower and the Original lender changes.

I considered what impact the TLAT 1996 would have on the original Lender and the Borrower.

First, I wanted to understand if the original Lender retained any Legal right to possession of the property after having sold the debt - I concluded that if you have sold the mortgage debt which was the link to the property and all rights to possession of it, my gut feeling was that it must be nigh on impossible for the Lender to have a Legal right to possession............... .................. but then, against this gut feeling.....Pender is an Authority in which it is stated that the original Lender retains a Legal right to possession.... again.... in a matter brought before the Houses of Parliament on 16 October 2001 Barry Gardiner MP (Brent North)for Brent North raised the un-reported case of City Mortgage Corporation v Reid.... This case I interpret the circumstance to be similar for all intent and purpose to that of the Pender case but concluded differently.
[source: http://www.publications.parliament.u...t/11016h05.htm ] .... It has to be understood that his un-reported case is NOT an Authority.

Against these cases..................My interpretaion of the TLAT 1996 s (6) leads me to wonder, just how important to the whole scheme of mortgage securitisation is an Administration Agreement - in the Pender case, it was the admin Agreement that the learned Judge referred to....So, I interpret that if the original Lender has not entered into an admin agreement with the Buyer, then it is unlikely that he has retained any 'Legal' right to possession. In fact as stated previously, for a lender who has derived a equitable title by virtue of having sold the mortgage debt and retains his name on the title...., I interpret from the TLAT 1996, that in seeking possession of the proeprty he would be acting in contravention of this important piece of legislation.....in the Reid case I interpreted that they had 'done their homework'

But having said that....it is s.58 of the LRA 2002 - which deals with registered charges (it may in fact be the LPA 1925, but definately s.58 (1) ) which essentially says..... the name that appears on the register is to be taken in Law to have the Legal right to possession.... the Authority in Pender also made this quite clear....

So, if on the one hand you have a Law that states that titles derived from equity have no rights, (TLAT 1996) but then on the other hand ... a Law essentially states (s.58) ... you have every right to possession..... what is the overal interpretation meant to be.....?? Could this be why the Judge stated 'in principle'...they 'retain the right to possession'.... is this to be interpreted as a 'play' on common Law v Statutory Law??

I interpret that Statutory Law superceeds common Law as and when it's available. and that each case will be juduged on the evidence produced on a case by case basis.

I further interpret that in submitting evidence that substantiates s.6 TLAT.....will not as a stand alone peice of legislation overcome the 'conclusiveness' of s.58.

Angry_Cat

Read this from CAG, Pegasus

It is not that I overlooked the s.136 LPA 1925 per se - it is timely that you should bring this important piece of legislation into the equation:

"1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice"— [my emphasis

(a) the legal right to such debt or thing in action;

(b) all legal and other remedies for the same; and

(c) the power to give a good discharge for the same without the concurrence of the assignor:

Provided that, if the debtor, trustee or other person liable in respect of such debt or thing in action has notice—

(a) that the assignment is disputed by the assignor or any person claiming under him; or

(b) of any other opposing or conflicting claims to such debt or thing in action;he may, if he thinks fit, either call upon the persons making claim thereto to interplead concerning the same, or pay the debt or other thing in action into court under the provisions of the M1Trustee Act, 1925.

(2) This section does not affect the provisions of the M2Policies of Assurance Act, 1867.

[F1(3) The county court has jurisdiction (including power to receive payment of money or securities into court) under the proviso to subsection (1) of this section where the amount or value of the debt or thing in action does not exceed [F2£30,000].]"

I interpret that the part in the text that I have 'emphasised' has a bearing on the substantiating rights of the Originating Lender once he has sold the mortgage debt.

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 CAG, 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

More from CAG to show you are wrong

In summary my interpretation so far provides that:

s.136 LPA 1925 in the circumstances failure to notify the Borrower of the sale/assignment protects not only the equitable right to redemption, but an additional equitable right to set-off

s.6 TLAT 1996 in the circumstances protects against the Originating Lender having any more than the limited rights of bare/custodian trustees who's original legal right to sue for possession is extinguished by this Act. (post sale of the mortgage debt - during the 'registration gap' period)


I think it is also prudent to factor into the equation, that s.136 LPA 1925 can also refer to the time when a Borrower sells the house without having had notice of the sale of the mortgage debt between the Originating lender and the SPV, where the Borrower sells the property to an 'innocent party' to provide additional equitable protections for all parties concerned.

Against this, I also factor in that 'Equity will not complete an Imperfect Gift' to mean that if the originating Lender and SPV have not formulated the assignment (registered the sale/transfer or notified the Borrower as required at common Law) equity will not assist the intended SPV.

I also factor into the equation that 'Equity will not allow a statute to be used as a Cloak for Fraud' to mean that if there is no trustee, whoever has title to the trust property will be considered to be the trustee. Otherwise, a court may appoint a trustee.

These latter equitable protections draw me to conclude in the circumstance where Borrowers are in the 'registration gap' period... that the Law already provides that given the circumstance the Originating Lender is a 'bare trustee' - this negates the need for the Courts to exercise any power to appoint a trustee.

The Law of property is complex - there is no quick fix to substantiate or deflect the allegations made against lenders - I do of course caution that these remain my interpretations and conclusions and in no way do they exhaust the protections for the lender or the borrower or do they look to either substantiate or deflect from allegations made of lenders and do not as stand alone statements seek to do any more than assist the debate this far.

Interpretation as well as opinion can change subject to the evidence of Law that may yet be presented in this thread.