Unlike our american cousins, it is usually the original lender in the UK that commences proceedings. The general accounting principles, legislation and to a degree the actual securitisation structure (with specific reference to ownership) within the UK is fundamentally different to that in the US.

Hello AM, sorry for the delay in getting back to you, I have been on a training course for the last few days but back home now.. You have said that the claimant is claiming that it is a regulated mortgage as defined by s.22 of the FSMA. The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 is the applicable secondary legislation (with the FSMA 2000 being the primary). As you have already correctly identified the applicable article is 61. The following is taken directly from a press release issued by the FSA: "From Sunday (31 October M Day) consumers making one of the most important financial decisions of their lives will enjoy additional protection, as the Financial Services Authority takes over responsibility for regulating mortgage lending, administration, advice and arranging..... .....The new rules cover mortgages that are entered into after 31 October. Customers who have applications in train when regulation starts should not experience any delay as a result of the changes, provided that their broker has been authorised by the FSA or is an appointed representative of an authorised firm" The above confirms that mortgage taken out in 2003 was not and is not regulated. However, as with most things in life there are and can be exceptions. If the agreement was modified (this could include further borrowing) after 31 October 2004, this could result in mortgage falling within regulation. If anything has happened to modify this particular mortgage post regulation, please let me know and I will investigate further for you. I don't normally like to speculate but based on the information you have provided, I presume that the Claimant is arguing that the agreement is regulated to avoid the implications of s.140 of the CCA. The above from the FSA should be enough to convince the judge that the legal representatives of the claimaint are intentionally (as they are legally qualified) attempting to mislead the Court and that their assertions with regard to the FSMA 2000 and subsequent secondary legislation is flawed. 1) "The CCJ was not disclosed on the app form, but it is believed it was discovered in a credit check at the time" Does the defendant have a copy of his/her credit file at that time or from shortly after the mortgage application - This would show the details of the CCJ and the search by the lender. It might also be advisable to SAR the lender (if this has not been done already) to see if there is any reference to the checks performed by the lender and to any adverse discoveries made. It may also be beneficial to consider applying for an order for disclosure of the lenders lending policy at that time. This would help to establish under what circumstances the lender was prepared to lend at that time. However, with any order for disclosure, I would suggest that consideration be given to costs as in a number of county court (thus unrecorded cases) it has been known for costs to be awarded for disclosure orders. 2) "The mortgage is self certified and the amount of the broker's commission does not appear to have been disclosed. There is a reference to the broker receiving a commission, but no specific amount" The defendent may want to look at and consider the following case with regard to "secret commission" being the payment of commission that was not disclosed. Wilson & Anor v Hurstanger Ltd [2007] EWCA Civ 299 (04 April 2007) “39. Obviously if there has been no disclosure the agent will have received a secret commission. This is a blatant breach of his fiduciary duty but additionally the payment or receipt of a secret commission is considered to be a form of bribe and is treated in the authorities as a special category of fraud in which it is unnecessary to prove motive, inducement or loss up to the amount of the bribe. The principal has alternative remedies against both the briber and the agent for money had and received where he can recover the amount of the bribe or for damages for fraud where he can recover the amount of any actual loss sustained by entering into the transaction in respect of which the bribe was given. (Mahesan v Malaya's Housing Society [1979] AC374, 383). Furthermore the transaction is voidable at the election of the principal who can rescind it provided counter-restitution can be made. (Panama & South Pacific Telegraph Co. v India Rubber, Gutta Percha, and Telegraph Co. [1875] 9 Ch App 515, 527, 532-3).” I will come back to you re: the above I have not been able to find any legisilation that specifically states this, sorry.

Hello AM, Sorry I am away from home until the weekend so I will reply then. I don't recall any legislation that states that irresponsible lending will result in the agreement being unenforceable, but I am unable to do my usual checks on my phone, so I could well be wrong. I will check once I am home again.

Hello BO2, The above case was heard in the High Court and is important for the following two reasons. "The first step in the securitisation transaction was the acquisition of the benefit of those mortgage loans by the Issuer" It confirms that it is only the benefit (equitable title / right to the money) that is aquired by the Issuer - with the Issuer being the SPV. This should bring an end to the long running debates with regard equitable v legal, but I am sure that there will still be some that will not accept this to be the case. "For all these reasons I will make a declaration that, whether or not the PECO formed part of the securitisation transaction, Eurosail is not unable to pay its debts within the meaning of section 123(2) of the Insolvency Act 1986 ("the Act") for the purposes of Condition 9(a)(iii) of the Conditions. I will hear counsel on any issues as to the form of my order and any other matters arising from it" It is also important because in direct contradiction to what has been reported in some circles the SPV is not bankrupt

Hello AM, The straight forward answer is no This is straight from the horses mouth (so to speak) www.fsa.gov.uk/pubs/final/Mortgageland.pdf (you might have to copy and paste the above link) This is from the bottom of page 4 "The FSA has regulated mortgage activities since 31 October 2004" The answer would depend upon the nature of the dispute. Remember that the FOS is an Alternative Dispute Resolution service (a free alternative to the Court service)

Hello BTM, Unless you have received an "express notice in writing" (as per s.136 of the LOP 1925) which confirms that your mortgage has been sold / purchased, it will still be the original lender and this should be documented with the Land Registry. You should be able to download a copy of the relevant documentation relating to your house from the Land Registery website.

Hello LD, As I remember this point was initially championed by SS and later by ITBG?. But I am still unable to see that as per s.123 (a) a person's right or claim has been concealed. As I said in my previous post, a borrower rights and claims would be against the legal title holder as it has the legal rights, duties, liabilities and responsibilities. I am not trying to be difficult with my answer or attempting to evade your question. As has been posted in this thread previously, the devil is in the detail and in this instance the detail is what legal right or claim has been concealed. There should not be any sppl fsa regulated agreements, as sppl was not a first charge lender. With regard to your question, we would have to look at the primary legislation (being the FSMA 2000) and the FSA Handbook - being the implementation of this legislation, with regard to the actual meaning and definition of a "regulated mortgage contracts" and "regulated activities". The FSA Handbook states that a Regulated Mortgage Contract is a contract which at the time it is entered into (quoted from the FSA Handbook) meets the following conditions: A lender provides credit to an individual or to trustees (the 'borrower'); and The obligation of the borrower to repay is secured by a first legal mortgage on land (other than timeshare accommodation) in the United Kingdom , at least 40% of which is used, or is intended to be used, as or in connection with a dwelling by the borrower or (in the case of credit provided to trustees) by an individual who is a beneficiary of the trust, or by a person who is in relation to the borrower or (in the case of credit provided to trustees) a beneficiary of the trust: I) that person's spouse or civil partner; or II) a person (whether or not of the opposite sex) whose relationship with that person has the characteristics of the relationship between husband and wife; or III) that person's parent, brother, sister, child, grandparent or grandchild; and (ii) is not a home purchase plan. (b) (in relation to a specified investment) the investment, specified in article 88 of the Regulated Activities Order, which is rights under a regulated mortgage contract within (a). Now with regard to a Mortgage Regulated Activity - being an activity regulated by the FSA, the FSA Handbook states that a Mortgage Regulated Activity is any of the following activities specified in Part II of the Regulated Activities Order (Specified Activities): (a) arranging (bringing about) regulated mortgage contracts (article 25A(1)); (b) making arrangements with a view to regulated mortgage contracts (article 25A(2)); © advising on regulated mortgage contracts (article 53A); (d) entering into a regulated mortgage contract (article 61(1)); (e) administering a regulated mortgage contract (article 61(2)); (f) agreeing to carry on a regulated activity in (a) to (e) (article 64). To conclude that a SPV to which a legal title is transferred (which none of the current notices state has or will happened with regard to SPML) has to be FSA regulated, it must perform a FSA regulated activity. Also from a previous post: The following is taken from the same treasury link as above "The RAO also deals with the extreme circumstances where an administrator, working under contract to a SPV lost its authorisation or went into liquidation. In such circumstances, the SPV could not be authorised to carry on regulated mortgage business as it neither enters into regulated mortgage contracts, nor administers them, and to do either would be a criminal offence. It was also important to take account of the fact that a number of firms could be sub-contracted to do different administration activities and the Government wanted to ensure that only one person was responsible and had permission from FSA to carry on that regulated activity." and.... "The Government therefore has put in two exclusions to take account of these circumstances. Firstly, arranging administration by an authorised person is not an authorisable activity, and secondly, a person who administers the mortgage contract under contract from an authorised person would not need to be an authorised."

Hello LD, firstly sorry for the delay in responding I am unable to access forums during the day and for some reason, I was unable to access CAG until now so this is the first opportunity I have had to respond. Ok, secondly I will try my best to respond the points you have made. As far as I am aware the recent notices only relate to SPPL and not to SPML. Therefore, as SPPL and the subsequent legal title holder is not a regulated mortgage lender - FSA regulation as such is not necessary. My previous post contained a list of the activites that are regulated. http://www2.crw.gov.uk/pr/Default.aspx CCA Licence 0587576 Eurosail 2006-2BL PLC 0591954Eurosail 2006-4NP Plc 0596891Eurosail-UK 2007-1NC PLC 0600202Eurosail-UK-2007-2NP-PLC 0604708Eurosail -UK 2007 -4BL Plc 0610239Eurosail Prime-UK 2007-A Plc 0610305Eurosail-UK 2007-5NP Plc 0610313Eurosail-UK 2007-6NC Plc 0615142Mortgage Funding 2008-1 Plc I am taking a guess this question relates to the FSA register and Capstone/Acenden. The answer is in two parts: http://www.fsa.gov.uk/smallfirms/resources/faqs/register.shtml What does "Unable to hold client money" mean? 'Unable to hold client money' indicates your firm cannot hold money on behalf of clients. For more information see our One minute guide to client money or our section on Client money. http://www.fsa.gov.uk/smallfirms/your_firm_type/gi/financial_management/client_money.shtml Client money Protecting your clients' assets is one of our key requirements: "A firm must arrange adequate protection for clients' assets when it is responsible for them." (FSA Principle 10) Why do we have client money rules? The client money rules are to protect your customers' money. They ensure a clear separation between money that belongs to your customer and money that belongs to your firm. When does your monthly payment cease to belong to you and start to belong to the lender ? To enable me to answer the question, can you please clarify what right or claim has been concealed ? I only ask because any claim or right a borrower could bring or has relating to their mortgage can be made against the legal title holder. The legal title holder, does not only have the legal rights, it also has the legal duties and obligations

Hello again LD, This makes interesting reading http://archive.treasury.gov.uk/docs/2001/mortgage_response.html In the light of these discussions, the construction of the RAO was changed. It no longer relies upon the exercise of rights by a rights holder as a regulated activity. Instead, the RAO focuses on administering the mortgage, and this will be a regulated activity, in addition to ‘entering into a regulated mortgage contract as lender’. The RAO defines administration as notifying the borrower of changes in interest rates or payments due under the contract, or of other matters of which the contract requires, and taking necessary steps to collect or recover payments.... The RAO details the following as regulated activities as per s.22 of the FSMA 2000 (a) accepting deposits (article 5); (aa) issuing electronic money (article 9B); (b) effecting contracts of insurance (article 10(1)); © carrying out contracts of insurance (article 10(2)); (d) dealing in investments as principal (article 14); (e) dealing in investments as agent (article 21); (f) arranging (bringing about) deals in investments (article 25(1)); (g) making arrangements with a view to transactions in investments (article 25(2)); (ga) arranging (bringing about) regulated mortgage contracts (article 25A(1));19, 30 (gb) making arrangements with a view to regulated mortgage contracts (article 25A(2));19, 30 (gc) arranging (bringing about) a home reversion plan (article 25B(1));17 (gd) making arrangements with a view to a home reversion plan (article 25B(2));17 (ge) arranging (bringing about) a home purchase plan (article 25C(1));17 (gf) making arrangements with a view to a home purchase plan (article 25C(2));17 (gg) operating a multilateral trading facility (article 25D);31 (gh) arranging (bringing about) a regulated sale and rent back agreement (article 25E(1));32 (gi) making arrangements with a view to a regulated sale and rent back agreement (article 25E(2));32 (h) managing investments (article 37); (ha) assisting in the administration and performance of a contract of insurance (article 39A);30 (i) safeguarding and administering investments (article 40); for the purposes of the permission regime, this is sub-divided into: (i) safeguarding and administration of assets (without arranging); (ii) arranging safeguarding and administration of assets; (j) sending dematerialised instructions (article 45(1)); (k) causing dematerialised instructions to be sent (article 45(2)); (l) establishing, operating or winding up a collective investment scheme (article 51(1)(a)); for the purposes of the permission regime, this is sub-divided into: (i) establishing, operating or winding up a regulated collective investment scheme; (ii) establishing, operating or winding up an unregulated collective investment scheme; (m) acting as trustee of an authorised unit trust scheme (article 51(1)(b)); (n) acting as the depositary or sole director of an open-ended investment company (article 51(1)©); (o) establishing, operating or winding up a stakeholder pension scheme (article 52 (a)33 ); (oa)31 providing basic advice on stakeholder products31 (article 52B);10 (ob) establishing, operating or winding up a personal pension scheme (article 52(b));33 (p) advising on investments (article 53); for the purposes of the permission regime, this is sub-divided into: (i) advising on investments (except pension transfers and pension opt-outs); (ii) advising on pension transfers and pension opt-outs; (pa) advising on regulated mortgage contracts (article 53A); 19, 30 17(pb) advising on a home reversion plan (article 53B); 17(pc) advising on a home purchase plan (article 53C); (pd) advising on a regulated sale and rent back agreement (article 53D);32 (q) advising on syndicate participation at Lloyd's (article 56); ® managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's (article 57); (s) arranging deals in contracts of insurance written at Lloyd's (article 58); (sa) entering into a regulated mortgage contract (article 61(1));19, 30 (sb) administering a regulated mortgage contract (article 61(2)); 19, 30 17(sc) entering into a home reversion plan (article 63B(1)); 17(sd) administering a home reversion plan (article 63B(2)); 17(se) entering into a home purchase plan (article 63F(1)); 17(sf) administering a home purchase plan (article 63F(2)); (sg) entering into a regulated sale and rent back agreement (article 63J(1));32 (sh) administering a regulated sale and rent back agreement (article 63J(2));32 (si) meeting of repayment claims (article 63N(1)(a));34 (sj) managing dormant account funds (including the investment of such funds) (article 63N(1)(b));34 (t) entering as provider into a funeral plan contract (article 59); (u) agreeing to carry on a regulated activity (article 64);

Duplicate Post

Hello LD, remember that SPPL was a 2nd charge lender (CCA regulated where applicable rather than FSA) and as per your post the issuer is MORTGAGE FUNDING 2008-1 PLC. Mortgage Funding 2008-PLC has a consumer credit licence. Licence Number:0615142 Licence Status:Current Current Applicant / Licensee: Business NameCompany Registration Number Mortgage Funding 2008-1 Plc6505910 Categories: Consumer credit Consumer hire Credit brokerage Credit reference agency Debt adjusting/counselling Debt collecting

Hello AM Remember s.140 also applies to agreements that are not CCA regulated. The unfair relationship provisions apply to any credit agreement between a creditor and an individual whether or not it is a CCA-regulated agreement, apart from an agreement secured by a first mortgage over residential land that falls within the category of exempt agreement provided under section 16 (6C) CCA (an agreement that is secured by a land mortgage and entering into that agreement as lender is a regulated activity for the purposes of FSMA 2000).

my two cents http://www.consumeractiongroup.co.uk/forum/show-post/post-2957643.html I promise that this will be my last post on the topic of securitisation and more importantly the title to sue debate. Recent events have been a real eye opener and made me seriously think about certain things. So enjoy and best of luck to one and all

Good Evening SS, good to see you back in the world of CAG. My ears have been burning today, someone must have been talking about me Ownership Legal and Equitable titles are derived from ownership. Ownership is the state or fact of exclusive rights and control over property, which may be an object, land/real estate or intellectual property. Ownership involves multiple rights, collectively referred to as title, which may be separated and held by different parties. Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document that serves as evidence of ownership. Conveyance of the document may be required in order to transfer ownership in the property to another person. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, both possession and title may be transferred independently of each other. The equitable title refers to the actual enjoyment and use of a property, whereas a legal title implies actual ownership. An example of such is a trust. In a trust, one person may own the legal title, such as the trustees. Another may own the equitable title such as the beneficiary. A trust is the separating of the legal (legal title) and the beneficial (equitable title) ownership of property. A trust consists of three parties: Settlor (the owner of both the legal and equitable title aka absolute owner) Trustee (Administor of the trust, which owns the legal title) Beneficiary (the owner of the equitable title) In UK securtisation, the settlor and the trustee is usually the same party (i.e mortgage lender). Therefore, the trustee is granted the legal powers to enforce any rights in relation to the property. The beneficiary is the SPV, which purchases the equitable title to the property. However, as beneficiary and the owner of the equitable title, it does not have any legal powers to enforce any rights in relation to the property. Trusts have always been used as a method of limiting the exposure of assets to taxes and other legal claims as well as to specify the use of those assets in ways not otherwise recognised under the law. In the scope of a trust, the trustee (mortgage lender) acts to protect the interests of the beneficary (SPV). Therefore, when a mortgage lender instigates repossession proceedings (and the mortgage has been securitised), it is doing so as the trustee of the trust. Therefore, any actual financial loss directly to the mortgage lender is immaterial. I think that Her Majesty's Revenue & Customs (HMRC) explains far simplier than I can: What is a trust? The law of trusts is based upon the concept of English law that property rights can be split into: the legal ownership, and the beneficial interest. A person who is the absolute owner of property has both the legal and beneficial interest in it. This means that the owner will show up as legal owner, e.g. on a land register or on a company register, and will also enjoy any benefit produced by the property. The absolute owner may split the legal interest from the beneficial enjoyment. This can be done by giving the legal ownership to trustees and the beneficial interest to a named beneficiary (or beneficiaries). Alternatively the owner can retain the legal title and make himself a trustee." Legislation Two important pieces of legislation to consider. Law of Property Act 1925 The Financial Collateral Arrangements (No. 2) Regulations 2003 Section 136 of the Law of Property Act 1925 states: 136 Legal assignments of things in action (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— Any absolute assignment of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, is effectual in law to pass and transfer from the date of such notice. For an absolute (legal) assignment to be effectual in law a notice has to be given to the debtor. Section 4(3) of the The Financial Collateral Arrangements (No.2) Regulations 2003 says: (3) Section 136 of the Law of Property Act 1925 (legal assignments of things in action) shall not apply (if it would otherwise do so) in relation to a financial collateral arrangement, to the extent that the section requires an assignment to be signed by the assignor or a person authorised on its behalf, in order to be effectual in law. Section 4(3) does not affect the requirement of a notice of assignment being sent to the borrower, it only states that it does not have to be signed by the assignor. In summary, legislation states that for an absolute (legal) assignment to be effectual in law, a notice of assignment has to be given to the borrower. Court Cases The Importance of Judicial Precedence The doctrine of judicial precedent involves application of the principle of "stare decisis", which means to 'stand by cases already decided'. Decisions made in the House of Lords bind all courts in the Country except the House itself. The House of Lords will usually follow its own decisions but will depart where it seems right to do so. Decisions made in the Court of Appeal bind courts below it and usually bind itself, unless its own previous decisions conflict, are incompatible with a decision made in the House of Lords even if not expressly overruled, or were made "per incuriam" (by mistake). The precedent is followed less rigidly in the criminal division where a person's liberty is at stake. It is the "ratio decidendi" of a case which gives the principle of law that becomes binding under the doctrine of judicial precedent. "Ratio Decidendi" is a latin phrase meaning 'the reason for the decision'. It refers to the way a court reasons and applies the law in order to come to a particular decision. The ratio of a case will only be binding on a later case where the legal principle involved is the same and the facts are sufficiently similar. Any other reasoning within the case is said to be "obiter dicta", meaning 'by the way'. Comments made "obiter dicta", together with decisions of lower courts, dissenting judgements, legal journals and text books, roman law, and decisions of courts in Scotland, Ireland, the Comnwealth and the USA may all be persuasive precedent. Persuasive precedent is not binding but may be considered, particularly where there is no authority on the point of law. There have been relatively few cases that have directly resulted in judgements being handed down with regard to Securitisation and the impact (if any) on the right to instigate litigation. Paragon v Pender Time Line of Events * 5th January 1995, an order of possession was granted to Paragon Finance * 21st January 2002, Mr & Mrs Pender applied unsuccessfully for a set aside * 9th January 2003, oral application for appeal dismissed * 17th February 2003, stay of execution granted * 25th November 2003, application for permission to appeal * 29th July 2004, limited permission to appeal granted * 27th June 2005, Appeal heard * 31 January 2006, a petition to appeal was submitted to the House of Lords. The House of Lords refused to give leave to appeal. Notable Judgements Pender 2003 137. I am only concerned of course with the taking of possession, because there was no monetary judgment. I do not see that either section 114 LPA 1925 nor the provisions of the LRA 1925 have impact on the enforcement of the mortgage debt. For there to be a legal assignment of that it seems to me self evident that it must be completed by notice under section 136 LPA 1925 and until so done, even by virtue of section 114, it will remain an equitable assignment only. Pender 2005 (paragrapgh 109 onwards) 1) 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. 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. 2) It follows, in my judgment, that Paragon, so long as it remains the registered proprietor of the Legal Charge, is a necessary party to any claim to possession of the Property in right of the Legal Charge. 3) 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. 4) In my judgment, therefore, there is no substance in the contention that the SPV should have been joined as an additional claimant in the proceedings. Nor, in my judgment, can the fact that Paragon has failed to describe itself as suing in its capacity as trustee affect the validity of the proceedings or of the orders made in the proceedings (in particular, the possession order). In any event, even if that failure could be said to amount to a formal defect in the proceedings (and I do not regard it as such) the court has ample powers under the CPR to correct such defects (e.g. under CPR Pt 17). 5) In my judgment Mr Page's reliance on section 114 of the Law of the Property Act 1925 is wholly misplaced, for the reason which the judge gave: viz. that section 114 is concerned with transfers of mortgages of unregistered land (transfers of mortgages of registered land being dealt with by section 33 of the Land Registration Act 1925). To interpret section 114 as applying also to transfers of mortgages of registered land would produce a fundamental and wholly illogical conflict between the two regimes in relation to transfers of mortgages. Bearing in mind what Lord Oliver of Aylmerton said in Flegg (quoted in paragraph 85 above), I can see no conceivable basis for interpreting section 114 in a way which produces that result and every reason for not doing so. Accordingly I respectfully agree with the observations of this court in Marks with reference to the instant case (see paragraph 95 above). 6) Nor, in my judgment, can Mr Page find any support for his submission in the Land Registration Act 2002, or in the Law Commission Report which preceded it. In my judgment it is verging on the absurd to seek to interpret a provision in a statute by reference to a provision in a different statute enacted some eighty years later. In any event, I agree with the judge that the administration agreements demonstrate a clear contrary intention, sufficient to disapply section 114 if (contrary to the conclusion which I have just expressed) the section would otherwise apply. GMAC RFC LIMITED - v - SINCLAIR 1. During the course of the argument my attention has been drawn to an interesting case, namely City Mortgage Corporation Ltd v Reilly and Reilly, which was an unreported decision of Judge Rubery in the Stroke-on-Trent County Court, dated 28th November 1997. On analysis that decision does not, in my judgment, assist the applicant for this reason. There the claimant was City Mortgage Corporation Ltd, which was the original lender and mortgagee. The original mortgage was dated 15th March 1996. On I think the same day a transfer of what Judge Rubery held to be the legal and beneficial interest in the charge was transferred to another company called Greenwich International Ltd. The transfer was not dated and it was submitted on behalf of the claimant, which was City Mortgage Corporation Ltd, that it took effect only in equity and not in law. I should add that notice to the defendants of the transfer was given on the same day, 15th March 1996. 2. The judge rejected the claimant's submission and held that the transfer operated as a transfer of the legal interest and that notice of that transfer had been given to the defendant, so that the transferor or assignor, City Mortgage Corporation Ltd, no longer had any rights under the charge. Those rights were vested in the transferee or assignee, namely Greenwich International Ltd. Accordingly, the claim failed. City Mortgage Corporation Ltd v Reilly and Reilly An unreported decision, details of judgements as detailed above Additional Information Difference Between America & UK securitisation "21. Two of the exceptions are the consequence of US requirements. The first, which the Appellant contends is reflected in substance and in form in the structure which has been achieved, is that the assignment must be a true sale; it may not be an assignment by way of security if US accounting standards are to be respected (necessary because COBE is a wholly-owned subsidiary of a US corporation which is subject to US standards). No such requirement is imposed by UK accounting standards, nor by the FSA" It would appear that in the US, securitisation has to be via a true sale. However, that is not a requirement in the UK. Therefore, if the lender retains legal title in law in the UK, securitisation has no effect on the ability of the lender to instigate legal proceedings. Her Majesty's Revenue & Customs (HRMC) Securitisation is a method of raising finance on the capital markets at advantageous rates of interest. Types of businesses likely to use securitisation are financial institutions, insurance companies, trading companies and any other type of business with a regular source of income. If these bodies borrow money from a bank the rate of interest charged will depend on their credit worthiness. Securitisation involves the transfer of their income into a separate trust. This enables money to be borrowed against the security of the income stream in such a way that, if the company goes bankrupt, the investor will still be repaid. In the case of credit card securitisations, the arrangement involves the establishment of a receivables trust, often in Jersey (receivables are the payments due to the credit card company from its customers, including repayment of the principal on a loan or credit arrangement. This can also apply to interchange commission paid by the retailer). "The credit card company transfers the beneficial interest (not the legal interest) in the receivables on a block of accounts to the trust. This is done in return for payment of the principal amount of credit provided plus a proportion of the interest due (known as the excess spread). A separate company is then set up to issue debt securities on to the capital markets to third party investors. The issuer contributes the funds received from investors to trust assets and later receives funds from the trust as necessary when payments of interest and repayments of principal fall due to investors. In the meantime, the credit card company uses the funds received from the investors to fund its business." Her Majesty's Revenue & Customs confirm that (in relation to credit cards) it is only the beneficial interest and not the legal interest that is transfered. Capital One tribunial As mentioned above. (please see point one) MBNA Case "57. The recitals to the RSD refer to the Transferor and Receivables Trustee (MBNA and CCSE respectively) having agreed that for the purposes of facilitating a possible securitisation, the Transferor may from time to time offer to assign all Receivables (existing and future) arising on such accounts of its credit card customers as are nominated to become Designated Accounts. It is acknowledged that upon acceptance of such an offer to assign by the Receivables Trustee, the Receivables will be assigned by way of equitable assignment only unless notice of assignment should later be given. It is also expressly contemplated by the recitals that the Receivables Trustee will appoint the Operating Party for the purpose of giving instructions in relation to any available discretion capable of being exercised by the Receivables Trustee upon the terms of a separate agreement described as the "RT Operating Agreement"." Halsbury (as in Halsbury's Laws of England 586. Securitisation of mortgages. Securitisation is the sale of a package of mortgage debts to a corporate vehicle (the 'issuer') established for the purpose of issuing securities usually in bearer form such as bonds1. One or more mortgagees (the 'originator') may agree to sell debts and related security to the issuer. This effects an equitable assignment of the mortgages which is not perfected by notice to the mortgagors or by registration. The issuer is entitled to call for a legal transfer of legal title to the mortgages in certain circumstances such as the persistent default or insolvency of the originator. The issuer is given an irrevocable power of attorney to effect the transfer and for certain other purposes2. The originator retains the powers of the mortgagee, including the right to possession3 but agrees to act in accordance with the instructions of the issuer in relation to matters such as interest rates and enforcement. The undertaking and assets of the issuer, including the mortgages, are in turn charged in favour of a security trustee for the benefit of the holders of notes or bonds issued by the issuer4. The security trustee is given custody of the charge certificates or, in the case of unregistered land, mortgages and title deeds, and is given an irrevocable power of attorney to effect a legal transfer of the mortgages. 1 See companies; financial services and institutions. 2 See the Powers of Attorney Act 1971 s 4; and agency vol 1 (2008 para 175. 3 See Paragon Finance plc v Pender [2005] EWCA Civ 760, [2005] All ER (D) 307 (Jun). 4 The charge takes effect as an equitable sub-charge. This view would appear to be supported by HM Revenue & Customs (well at least in relation to credit card debt securitisation)Guidance for specific trade sectors: Finance: Securitisation arrangements "The credit card company transfers the beneficial interest (not the legal interest) in the receivables on a block of accounts to the trust." AND "The credit card customer is not informed of these arrangements and the contract between the company and the cardholder is unchanged (i.e. there is no novation of the contract). This means that the exempt supply is still between the credit card company and the cardholder. This was confirmed by the Tribunal in Capital One Bank (Europe) Plc (COBE) [VTD19238] and the High Court in MBNA Europe Bank Ltd." I have also found this from the House of Commons House of Commons - Explanatory Note 11. If, as expected, the loans eventually sold are securitised, legal structures will be created to hold the legal and equitable interests in the loans in the names of different parties. Lords Amendment 6 would make clear that the provisions of clause 3 relating to onward sale of the loans do not apply to the creation or transfers of equitable rights that occur in a securitisation. Rather, it clarifies that clause 3 relates only to the onward transfer of legal title to the loans. The amendment ensures that the transfers of equitable interests that occur as a normal part of a securitisation are separate from the onward transfer of legal title, and which do not require the same protections. The following extracts are taken from the attached document Holmes Financing (NO.5) PLC Page 44 The sale by the seller to the mortgages trustee of the mortgages has taken effect, and any sale of mortgages in the future will take effect, in equity only. This means that legal title to the loans in the trust property remains with the seller, but the mortgages trustee has all the other rights and benefits relating to ownership of each loan and its related security (which rights and benefits are subject to the trust in favour of the beneficiaries). Page 101 Under the mortgage sale agreement, on 26th July, 2000 the seller transferred by way of equitable assignment to the mortgages trustee its interest in a portfolio of loans, together with all of the related security to those loans. Page 104 The loans in the current portfolio were assigned, and any new loans (including the new loans to be assigned on the closing date) will be assigned, to the mortgages trustee by way of equitable assignment. This means that legal title to the loans and their related security remains with the seller until notice of the assignment is given by the seller to the borrowers. Page 206 The sale of the mortgages by the seller to the mortgages trustee will take effect in equity only. Page 269 The principal purpose of the Company is to acquire an equitable interest in a portfolio of mortgages and enter into all financial arrangements in that connection. Page 277 The principal purpose of the Company is to acquire an equitable interest in a portfolio of mortgages and enter into all financial arrangements in that connection Mortgage Solutions - GMAC RFC announces first transaction in an alternative exit strategy GMAC RFC has announced its first sale of residential UK mortgage assets, worth £125m, into a new funding vehicle, complementing its existing whole loan sale and securitisation programmes. Within the new structure the equitable interest in the mortgage loans was purchased through the issuance of Credit Linked Notes, which have been bought by Deutsche Genossenschafts-Hypothekenbank (DGH). DGH also acted as sole arranger for the deal. GMAC has retained legal title to the loans and will continue to administer the loans on behalf of the vehicle The House of Lords take on securisitation http://www.publications.parliament.uk/pa/cm200708/cmbills/121/en/2008121en.pdf Lords Amendment 6 would make clear that the provisions of clause 3 relating to onward sale of the loans do not apply to the creation or transfers of equitable rights that occur in a securitisation. Rather, it clarifies that clause 3 relates only to the onward transfer of legal title to the loans. The amendment ensures that the transfers of equitable interests that occur as a normal part of a securitisation are separate from the onward transfer of legal title, and which do not require the same protections. The following relates to the attached document SPVs and Securitisations. The following extract was taken from Mortgage Backed Securitisation in the United Kingdom(attached to this post) The following two extracts are taken from An Analysis of the Law and Practice of Securitisation (copy attached to this post) The following extract is taken the attached file - Loan securitisation and risk transfer Not a judgement or a decision, but an extract from Pender. "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). Dr Ferran goes on to point out that, for reasons essentially of administrative convenience and cost, transfers by way of securitisation are usually left uncompleted, but with provision being made for completion in certain specified circumstances, e.g. if the transferor persistently defaults on its obligations under the securitisation arrangements. Typically, such obligations will be contained in an 'administration agreement' between the transferor and the SPV. These general observations about securitisation (for which I am indebted principally to Dr Ferran's book) are not the subject of dispute in the instant case." To place the above extract into context, Dr Eilis Ferran is a Professor of Company and Securities Law at the University of Cambridge: As you would anticipate with someone with her credentials, she is published: 'The Place for Creditor Protection on the Agenda for Modernisaiton of Company law in the European Union' (2006) 3 European Company and Financial Law Review 178 'Transatlantic Financial Services Regulatory Dialogue' (with K Alexander, HE Jackson and N Moloney) (forthcoming European Business Organization Law Review Building an EU Securities Market (CUP, 2004) 'Financial Assistance: Changing Policy Perceptions but Static Law' [2004] Cambridge Law Journal 225 - 243 'The Role of the Shareholder in Internal Corporate Governance: Enabling Shareholders to Make Better-informed Decisions' [2003] European Business Organization Law Review 491 - 516 'Examining the UK Experience in Adopting the Single Financial Regulator Model' (2003) 28 Brooklyn Journal of International Law 257-307 'Dispute Resolution Mechanisms in the UK Financial Sector' [2002] Civil Justice Quarterly 135-155 (also published in a report to the Korean Stock Exchange, Self-Regulation in the Korean Securities Market Korean Securities Law Association, 2002) 'Corporate Law Codes and Social Norms - Finding the Right Regulatory Combination and Institutional Structure' [2001] Journal of Corporate Law Studies 381-409 Ferran and Goodhart (eds) The Challenges Facing Financial Regulation (Hart Publishing, 2001) 'Company Law Reform in the UK' (2001) 5 Singapore Journal of International and Comparative Law 516-568 Boyle and Birds Company Law (Jordans, 2000) (with Boyle, Birds and Villiers) Company Law and Corporate Finance (OUP, 1999) Employment History: Reader in Corporate Law and Financial Regulation (2000 – 2005) University Lecturer, (1991 – 2000) University Assistant Lecturer, (1988–1991) Director of the Centre for Corporate and Commercial Law, (April 1999 – September 2003) Assistant Director, Centre for Corporate and Commercial Law, (1997–1999) College Lecturer, St Catharine’s College, Cambridge (1986–1988 ) Trainee Solicitor, Clifford Chance, solicitors (1984–1986) Qualifications PhD, University of Cambridge, 1992, (by special regulations) BA, University of Cambridge 1983 (Law Tripos First Class with Distinction) Securitization: The Financial Instrument of the Future by Vinod Kothari Publisher: John Wiley & Sons; Har/Cdr edition (18 Aug 2006) Language English ISBN-10: 0470821957 ISBN-13: 978-0470821954 Page 611 (continued on Page 612)- Equitable Assignment "Why Equitable Assignment? "Why do entities resort to equitable assignment? Essentially, to avoid the difficulties involved in full-scale legal transfer. These difficulties may either include having to notify the debtor (as under U.K. or Hong Kong law) or the stamp duties associated with a conveyance that the receivables (as in U.K. and India). Some preconditions for effecting an equitable transfer are: There must be an express intention on the part of the transferor to assign receivables. The receivables must be identified The buyer must have paid the consideration Though the obliger is not notified, the transaction must be carried out between the transferor and transferee as if full scale transfer had taken place. Therefore, the seller must not be paying from his general funds, but out of a specific fund or collections from the receivables. To allow the transferee to proceed against the obligors if the need arises, the transferor should be given a power of attorney authorizing the transferee to collect payments from the obligors. To support and strengthen the power of attorney specified above, a mandate should also be given requiring the obligors to pay the transferee." And....... Securitization Law and Practice: In the Face of the Credit Crunch (International Banking & Financial Law Series) by Jan Job de Vries Robbe Publisher: Kluwer Law International (30 Jun 2008) Language English ISBN-10: 9041127151 ISBN-13: 978-9041127150 Page 399 - 9.26 Legal Risks "In English Law governed securitization transactions, one of two forms of assignments are used, equitable or legal assignment. If the assignment is equitable only, without notification to the borrower, then it only allows for protection under equity to the SPV as assignee. To ensure full protection at law however, the underlying borrowers must be notified of the assignment. The is generally done after the occurance of certain trigger events, which could indicate an increased risk of insolvency of the seller" In my opinion, the important segments of the above securitisation structure are: 1) "Equitable Assignment of mortgage loans. The legal title is retained by the Originator (trustee) and the SPV aquires an equitable one (beneficary)" 2) "The SPV, who is the issuer of the MBS (mortgage backed securities) and a bankruptcy remote vehicle, creates, owns in equity and manages the pool of mortgages. He is the new equitable mortgagee." Point 1, confirms that the originator retains the legal title and the SPV aquires the equitable title. Point 2, confirms that the SPV becomes the new equitable mortgagee, which may explain the letters some caggers have received relating to insurance policies. 3) "He (trustee of the issue) receives a mortgage over the pool of mortgage loans (sub-mortgage) and a floating charge over the SPV's assets in warranty of the over the MBS holders." The above diagram was taken from: Innovation in Securitisation: Yearbook 2006 (International Banking & Finance Law) (International Banking & Finance Law Series) Publisher: Kluwer Law International (1 Jun 2006) Language English ISBN-10: 9041125337 ISBN-13: 978-9041125330 Page 126 - Section 3.2 The Role of the Trust in an English Securitisation Process. Book Description: "Despite fears that regulators around the world would act to curtail securitisation severely in the aftermath of the collapse of Enron, WorldCom, and Parmalat, the securitisation industry has witnessed what can only be described as relentless innovation. Securisation remains one of the most important means for financial institutions to diversify their funding, transfer credit risk and manage solvency requirements. This volume, the second in a series focusing on the latest innovations in the global securitisation industry, provides advisers with detailed guidance on key structural and legal issues of innovative securitisations, as well as describing the most recent developments in the accounting and risk-capital treatment of securitisation transactions. The contributors represent a wide range of expert participants in the design, execution, and regulation of securitisation transactions. Among the critical features of contemporary securitisation covered are the following: project finance CLOs; securitisation of equity risk; securitisation of commodity risk through commodity trigger swaps; the convergence of structured credit and securitisation markets; innovation in RMBS: negative equity transactions; innovation in CMBS: A/B structure; new markets in Europe, Japan, and Islamic countries; catastrophe risk securitisation; effect of recent US bankruptcy legislation on synthetics; microfinance loan securitisation in emerging markets; public sector securitisation; securitisable intellectual property; application of accounting standards in a rapidly changing environment, and updated analysis of Basel II. The above is not based purely upon my own personal opinion. I have provided a number of sources that I have quoted them directly. I have not felt the need to interpret or translate as others continually do to support their arguments. But it is ok the following listed below and above in great detail can be ignored.:???: Case Law (common law) Leglisation Halbury's House of Commons Securitisation Documentation House of Lords A Cambridge Professor Author's It is clear this is a topic we will never agree on, so why don't we just agree to disagree.

From the Council of Mortgage Lenders http://uk.wrs.yahoo.com/_ylt=A03uv8MrdvVLxYwARF5LBQx.;_ylu=X3oDMTByNzk4cXAwBHNlYwNzcgRwb3MDOQRjb2xvA2lyZAR2dGlkAw--/SIG=12kbgngm8/EXP=1274464171/**http%3a//www.cml.org.uk/cml/filegrab/1AndrewHeywood.pdf%3fref=5203 Take a look at slide 7

And I have no qualms in admitting it ;) It would be very stupid of me to continue to state something which I have now discovered (thanks to Animal Magic) I misunderstood. Better to admit it openly, so others aren't misled, than try to cover up my mistake or continue in ignorant bliss me thinks Wouldn't you agree JC ?

Hello Tifo, No it is because of this http://www.consumeractiongroup.co.uk/forum/show-post/post-2890725.html The only exemption is a regulated mortgage agreement, in otherwords mortgages provided after 31 October 2004

Afternoon everyone... Confession time... I am wrong about s.140 and non regulated first charge mortgages. AnimalMagic is quite correct.. Looks like Suetonius is only human after all.. I can freely admit when I am wrong..

Seconds thoughts I have already posted about the applicability of s.140 in the specially created thread. So if clarification is required it can be found there ;-)

Sorry Animalmagic my previous response was just with regard to the loans/mortgage with in the prospectus. I am posting on my phone at the moment but when I get home tonight I will post further and clarify what agreements s.140 does apply too

Do you have a thread ? Did you or a claim management company (CMC) make a claim with regard to PPI using s.75 of the CCA. Section 56 states: 56 Antecedent negotiations (1) In this Act “antecedent negotiations” means any negotiations with the debtor or hirer— (a) conducted by the creditor or owner in relation to the making of any regulated agreement, or (b) conducted by a credit-broker in relation to goods sold or proposed to be sold by the credit-broker to the creditor before forming the subject-matter of a debtor-creditor-supplier agreement within section 12(a), or © conducted by the supplier in relation to a transaction financed or proposed to be financed by a debtor-creditor-supplier agreement within section 12(b) or ©, Whereas s.75 states: 75 Liability of creditor for breaches by supplier (1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or © has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor. (2) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor. (3) Subsection (1) does not apply to a claim— (a) under a non-commercial agreement, or (b) so far as the claim relates to any single item to which the supplier has attached a cash price not exceeding £100 or more than £30,000. (4) This section applies notwithstanding that the debtor, in entering into the transaction, exceeded the credit limit or otherwise contravened any term of the agreement. (5) In an action brought against the creditor under subsection (1) he shall be entitled, in accordance with rules of court, to have the supplier made a party to the proceedings. s.75 is mostly used when you purchase something using credit (over £100.00) and there has been either a breach of contract or a misrepresentation by the supplier (i.e. faulty goods etc) s.75 when there is a Debtor-Creditor-Supplier (D-C-S) relationship allows you to make a claim against the credit provider.

Thanks Actionnotwords, that would explain it then. It may be the case that particular prospectus (especially Eurosail) related to the securtisation of both CCA and FSA regulated loans/mortgages. Therefore, it details the risk factors both both types of regulation. Burden of proof is reversed for CCA regulated agreement by s.140 Consumer Credit Act 2006 (c. 14) (9) If, in any such proceedings, the debtor or a surety alleges that the relationship between the creditor and the debtor is unfair to the debtor, it is for the creditor to prove to the contrary.” However, this is limited to CCA regulated agreements only.

I wonder what type of company you work for ? P.S Rob, I do have "some" first hand experience of dealing with the fall out of equity release. If you would like to discuss the advantages and disadvantages of such a financial product and especially with regard to customer satisfaction etc, please start and thread and I will gladly discuss this further with you.

Hello Actionnotwords Is the above taken from a prospectus ? I only ask because I just had a quick read of the FSMA 2000 and it states: Financial Services and Markets Act 2000 150 Actions for damages (1) A contravention by an authorised person of a rule is actionable at the suit of a private person who suffers loss as a result of the contravention, subject to the defences and other incidents applying to actions for breach of statutory duty. (2) If rules so provide, subsection (1) does not apply to contravention of a specified provision of those rules. (3) In prescribed cases, a contravention of a rule which would be actionable at the suit of a private person is actionable at the suit of a person who is not a private person, subject to the defences and other incidents applying to actions for breach of statutory duty. (4) In subsections (1) and (3) “rule” does not include— (a) listing rules; or (b) a rule requiring an authorised person to have or maintain financial resources. (5) “Private person” has such meaning as may be prescribed. I know that a couple of years ago work was being done on a bill to implement this requirement following the acts in 1977 and 1999.

A very good find actionnotwords. In complete honesty, I had not come across that before. Obviously there is s.140 for cca, initially it looks like the same principle for FSA. Good find