Second Mortgage? Top-up loan? You should read this.

**steven4064** · 15th January 2009 18:18

Mortgages normally are not regulated by the Consumer Credit Act 1974.

However, Francis Bennion, who was the author of the CCA1974 points out that second mortgages, top-up loans and other products offered by mortgage icon

companies and secured on property may well do.

In his paper on Section 18 (which covers 'multiple agreements'), he specifically includes the example "A mortgage icon

company (M) wishes to float a Scheme under which it would offer its existing borrowers a further advance facility combined with refinancing. M wants to call this a ‘Topup Loan’."

He goes on to explain that the part of the loan covering the further advance (if it is less than £25000) is regulated by the CCA 1974 and must comply fully with that Act. Furthermore, the two parts of the loan agreement must be treated as seperate agreements. If this is not done, the agreement covering the further advance would be unenforceable.

This fact could obviously be of great interest icon

to people having problems with mortgage and other loan companies and may well provide a route to prevent repossession, etc.

For a further discussion on s18 see the thread in the debt collection icon

industry forum - http://www.consumeractiongroup.co.uk...ng-within.html

Similar Threads:

**andrew1** · 15th January 2009 19:00

Well done Steven. It may be useful to put Bennions web link here for people to explore too, where he examines certain cases arguing his draft intentions which may be useful to understand.

Bennion is an Academic and therefore his web page covers many subjects, but further down are his workings on Credit Control and Multiple Agreements and the case Steven refers to here

Francis Bennion - Law - 1999.029 'Addendum re multiple agreements'

**cupcake68** · 4th March 2010 17:03

Originally Posted by steven4064

Mortgages normally are not regulated by the Consumer Credit Act 1974.

However, Francis Bennion, who was the author of the CCA1974 points out that second mortgages, top-up loans and other products offered by mortgage icon

companies and secured on property may well do.

In his paper on Section 18 (which covers 'multiple agreements'), he specifically includes the example "A mortgage icon

company (M) wishes to float a Scheme under which it would offer its existing borrowers a further advance facility combined with refinancing. M wants to call this a ‘Topup Loan’."

He goes on to explain that the part of the loan covering the further advance (if it is less than £25000) is regulated by the CCA 1974 and must comply fully with that Act. Furthermore, the two parts of the loan agreement must be treated as seperate agreements. If this is not done, the agreement covering the further advance would be unenforceable.

This fact could obviously be of great interest icon

to people having problems with mortgage and other loan companies and may well provide a route to prevent repossession, etc.

For a further discussion on s18 see the thread in the debt collection icon

industry forum - http://www.consumeractiongroup.co.uk...ng-within.html

I hope I'm asking this on the correct thread!!

The above text highlighted in red...

Does that only apply to further advances under £25k?

Cupcake

**steven4064** · 4th March 2010 17:43

Hi cupcake

This is quite an old thread. THings have changed a bit regarding unenforceable agreements as courts have hardened their stance in the light of some of the antics of CMCs. It is now much harder to convince a court that an agreement is unenforceable and, in this case in particular, Bennions views have been over-ruled by a court - although I think there is to be an appeal.

**cupcake68** · 4th March 2010 18:09

Thanks Steven

Do you have detals of the appeal?

I would like to keep an eye on the appeal.

Having said that....would not apply to me unless it was for more than £25k!!

Cupcake

**andrew1** · 4th March 2010 18:09

Originally Posted by steven4064

Hi cupcake

This is quite an old thread. THings have changed a bit regarding unenforceable agreements as courts have hardened their stance in the light of some of the antics of CMCs. It is now much harder to convince a court that an agreement is unenforceable and, in this case in particular, Bennions views have been over-ruled by a court - although I think there is to be an appeal.

Steven, while I've got you on this theme, have you read of any cases which Heath has been an issue and it gone on to prove a case to be different to Heath? I have an appeal shortly against the multiple agreement I have which my Judge said my agreement was a 3 part multiple and as far as he was concerned totally unenforceable BUT for Heath which he had to rely on. I'd just like to compare notes on any that have been challenged against that ruling on different grounds.

Thanks

**steven4064** · 4th March 2010 18:14

Cupcake

The 25k applies to the main loan not the multiple agreement - a loan of, say, 21k with 6k PPI icon

would still be a regulated agreement even though the total laon was 27k because the main loan was <25k.

Andrew

I have not heard of anything.

**cupcake68** · 4th March 2010 20:49

Thanks Steven

So my mortgage icon

of £90k plus exra loan of £80 would never have applied anyway?!!

Cupcake

**steven4064** · 4th March 2010 23:12

Probably not

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