Mortgage Securitisation - Preferred

[Rhia]

Supersleuth - this is something that has been puzzling me. If the SPV now owns the debt - any debt not just mortgages - then they surely would be the ones to go bankrupt on non payment - not the OC?

 

Therefore, had the Govt not bailed out the banks would the damage have been that great? After all they no longer owned the toxic debts and were just the admin arm.

 

Additionally if a credit card debt is sold on to a SPV. The cardholder defaults and the OC then assignes (or sells) on to a Debt Collection Agency, well, how can they? What is there to sell/assign to a DCA apart from the right to administer the debt.

 

Therefore, by logical extension, no DCA should be able to take a consumer to court for recovery unless (as in the mortgages) joined in the action by the SPV.

[Last of the Mohicans]

Supersleuth - this is something that has been puzzling me. If the SPV now owns the debt - any debt not just mortgages - then they surely would be the ones to go bankrupt on non payment - not the OC?

 

Therefore, had the Govt not bailed out the banks would the damage have been that great? After all they no longer owned the toxic debts and were just the admin arm.

 

Additionally if a credit card debt is sold on to a SPV. The cardholder defaults and the OC then assignes (or sells) on to a Debt Collection Agency, well, how can they? What is there to sell/assign to a DCA apart from the right to administer the debt.

 

Therefore, by logical extension, no DCA should be able to take a consumer to court for recovery unless (as in the mortgages) joined in the action by the SPV.

 

A tack I was quietly trying to work out Rhia...

 

OK, pick the bones out of this

 

From http://www.gillhams.com/articles/390.cfm and elsewhere

“Novation”

The concept of novation derives from Roman Law and is where all liabilities and obligations under a contract, whether it is the transfer of the benefit or burden of a contract, can be passed to a third party providing that all parties consent. Where this happens, the original contract between the debtor and creditor is annulled and is replaced by a new contract between the debtor and the third party. Consideration must be provided in respect of the new contract and is usually assumed to be the discharge of the original contract and the creditor’s contractual obligations. For example, where A owes B money and all parties agree that C will pay the money to B, not A, B’s consideration to C is agreeing to release A from his obligations and A’s consideration is providing the new debtor, C.

Novation can be distinguished from, and is legally distinct from Assignment by its terms and what it entails.

“Assignment”

A party to a contract (the assignor (aka The Original Lender)) is able to transfer the benefit of a performance he is to receive under that contract to another person (the assignee) who is able to enforce performance in his own right, without the consent of the other party (the debtor). For example, where there is a contract between A and B and B assigns the benefit of the contract to C, he can then enforce it against A.

Clearly, we are Assigned - since there is no new contract. The question this raises is: Where are our Notes of Assignment, and / or what stunt do they pull to avoid sending them?

[Smarterchick]

Not forgetting there's also a ' Trustee ' somewhere in all this. It mentions in the Abbey that any profits go to some kind of Nursing charity

[Rhia]

Is that a nursing home then? In that case does matron know they're out?

[JonCris]

Hi Rhia,

 

In broad terms, the doctrine of novation has no application here because a novation would require the expressed consent of both the original contracting parties whereas an assignment does not. Which means that the borrower as one of the original contracting parties would have to be involved in a novation (which is counter to their concealment ploy). Thus, the contracts are assigned. The standard contracts have a provision where the borrower consents to the assignment plus assignment is allowed at law under the Law of Property Act 1925 s.136.

 

Your hunch is spot on. It is likely that it is not just concealment from the borrowers, the LR and the courts, it is also concealment from the tax man.

 

In very simplist terms, most SPVs are foreign companies - when a foreign company receives interest from us borrowers - that interest is income that is subject to withholding tax. Lets say at a 30% rate. Therefore, 30% of our monthly mortgage payment is supposed to be paid to the Inland Revenue (i.e. withheld from going abroad) and then the remaining 70% would then be sent abroad to the foreign SPV - but when the interest is paid to a british bank - there's no withholding tax! A good reason therefore to remain concealed. Just imagine how much money the Inland Revenue would receive if 30% of British borrowers monthly payments were paid to our tax man.

 

 

Again excellent SS

 

Isn't it not also true that the rot for SPV's began to set in long before the so called & very convenient for the lenders, trailer trash none payment explosion. Is it not true that trading in these derivatives virtually stopped in early 2007 when it became possible that they might suddenly carry a heavy tax burden & is it not true that the 'toxic' debt was provoked by managers so that investors could have their 'investment' repaid & any losses paid for by the tax payer.

 

Not only have they achieved their initial aims but, as the present situation reveals they have in fact done much better than even they had anticipated by way of a massive subsidy much of which has gone to reimburse they investors rather then boost lending as intended by government:mad:

[JonCris]

Not forgetting there's also a ' Trustee ' somewhere in all this. It mentions in the Abbey that any profits go to some kind of Nursing charity

 

 

The mention of 'charities' is merely a sop to appear beyond reproach

 

You may recall the ballyhoo when NR went bust their offshore fund Granite also named a local charity as beneficiaries which when asked by the media knew nothing about their involvement with NR. In other words it was a blatant lie

[Suetonius]

Also, the above judgment (Paragon vs Pender) stated that the LoP 1925 s.114 applies?

 

 

Does it say that s.114 applies ??

 

113. 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.

[Suetonius]

Is it not true that trading in these derivatives virtually stopped in early 2007 when it became possible that they might suddenly carry a heavy tax burden & is it not true that the 'toxic' debt was provoked by managers so that investors could have their 'investment' repaid & any losses paid for by the tax payer.

 

The implementation of the Taxation of Insurance Securitisation Companies Regulations 2007, would have had a impact on insurance SPV's

[Suetonius]

Are we really saying that the judgements stated in the Paragon case can be totally ignored ?

[JonCris]

The implementation of the Taxation of Insurance Securitisation Companies Regulations 2007, would have had a impact on insurance SPV's

 

 

Exactly & that's why the market went pear shaped NOT because borrowers defaulted en'mas They stopped trading in the dam things because like pass the parcel no one wanted to be left holding them

[Suetonius]

The SPV should be the claimant - but the SPV unlawfully conceals itself from the borrowers.

 

Even if the SPV does appoint a representative (which is lawful), that entity must declare on the claim form that it is claiming in a representative capacity on behalf of the SPV. But hey ho - so what if they fail to observe that law too!! (which is unlawful) and they fail to mention the representative capacity so that they can maintain the concealment of the SPV. That's just business as usual.

 

Upshot is: Yes, you could demand that the SPV be joined to the action because after all, it IS the SPV that has the claim against a borrower.

 

With regard to Paragon Finance Plc v Pender & Anor [2005] EWCA Civ 760 (27 June 2005). Are you saying that when Lord Justice Jonathan Parker said:

 

112.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).

 

His judgements were incorrect, bearing in mind that his judgements were agreed by Lord Justice Carnworth and Lord Justice Ward ?

 

Considering the legal experience and percieved expertise of all 3 Lord Justices, I am sure you will both appreciate and understand my confusion.

 

Career History:

Lord Justice Jonathan Parker

Lord Justice Carnworth

Lord Justice Ward

[bustthematrix]

Hi Vincenta,

 

I agree with your comment that the forum is for discussion and information sharing so wondered whether you would like to share some of your information to discuss.

 

I'll certainly share info as and when I have it ...

I do note that these last few posts have not been case specific with people asking for help tho :grin:!...and I think that's great of course.

Keep up the good work guys. Something good will come of the synergy.

[bustthematrix]

... the seller (in this case Abbey) and the SPV deliberately agree in their contract of sale to supress and conceal from the LR, the information concerning the transfer of title to the SPV, they commit a criminal offence.

 

another great post and linking this with comments from the Riley case...

 

"In accordance with section 114 of the Law of Property Act 1925, the deeds operate to transfer all rights to sue on the security to Greenwich International in America, rather than City Mortgage Corporation" (bold emphasis mine)

 

It seems to my non legal-eagle mind, that on these two premises hinges much of the debate. In order to make any headway, one has to find out

 

1. Exacly WHAT the seller (lender) has sold to the SPV

2. Evidence that they contracted to supress and conceal this from the Land Registry

3. Confirmation of the document exists where the seller (lender) transfers ALL RIGHTS to the SPV and not just the beneficial rights/interest.

 

This should put a stop to the main argument the UK lenders' currently employ to affirm their right to enforce repossession which is the beneficial interest vs legal interest tack which they still claim to hold and therefore legitimises their charge at the LR.

 

But the above evidence from 1-3 would PROVE that this is in fact incorrect.

 

The challenge appears to be obtaining the specific information in points 1-3 in time to make a proper defence/claim.

 

Am I right in these summaries?

[Last of the Mohicans]

 

another great post and linking this with comments from the Riley case...

 

"In accordance with section 114 of the Law of Property Act 1925, the deeds operate to transfer all rights to sue on the security to Greenwich International in America, rather than City Mortgage Corporation" (bold emphasis mine)

 

It seems to my non legal-eagle mind, that on these two premises hinges much of the debate. In order to make any headway, one has to find out

 

1. Exacly WHAT the seller (lender) has sold to the SPV

2. Evidence that they contracted to supress and conceal this from the Land Registry

3. Confirmation of the document exists where the seller (lender) transfers ALL RIGHTS to the SPV and not just the beneficial rights/interest.

 

This should put a stop to the main argument the UK lenders' currently employ to affirm their right to enforce repossession which is the beneficial interest vs legal interest tack which they still claim to hold and therefore legitimises their charge at the LR.

 

But the above evidence from 1-3 would PROVE that this is in fact incorrect.

 

The challenge appears to be obtaining the specific information in points 1-3 in time to make a proper defence/claim.

 

Am I right in these summaries?

 

Vincenta, could you please read this post here, http://www.consumeractiongroup.co.uk/forum/show-post/post-2060801.html and study the LRA 2002 (its in that post) and see if you can find any answer to your questions?

[Suetonius]

 

another great post and linking this with comments from the Riley case...

 

"In accordance with section 114 of the Law of Property Act 1925, the deeds operate to transfer all rights to sue on the security to Greenwich International in America, rather than City Mortgage Corporation" (bold emphasis mine)

 

It seems to my non legal-eagle mind, that on these two premises hinges much of the debate. In order to make any headway, one has to find out

 

1. Exacly WHAT the seller (lender) has sold to the SPV

2. Evidence that they contracted to supress and conceal this from the Land Registry

3. Confirmation of the document exists where the seller (lender) transfers ALL RIGHTS to the SPV and not just the beneficial rights/interest.

 

This should put a stop to the main argument the UK lenders' currently employ to affirm their right to enforce repossession which is the beneficial interest vs legal interest tack which they still claim to hold and therefore legitimises their charge at the LR.

 

But the above evidence from 1-3 would PROVE that this is in fact incorrect.

 

The challenge appears to be obtaining the specific information in points 1-3 in time to make a proper defence/claim.

 

Am I right in these summaries?

 

113. 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.

 

 

From the view point of the judicial system, it may be beneficial to remember that the Riley case was in a County Court, whereas the Paragon Case was held at a higher judicial level. Therefore, in relation to section 114 wouldn't it be reasonable to assume that the judgement of a Lord Justice would take priority over a judgement of a County Court ?

 

However, I do consider that the goal would have to be, to establish exactly what has been transfered.

 

It may be the case that this is not always the same and may vary between different lenders and different SPV's.

[bustthematrix]

112.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).

Does it say that s.114 applies ??

113. 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.

Suetonius has a serious point here. These judgements are quite clear and are not that long ago.

However did the justices rule as they did based on the fact that

1) Pender may have overly relied on the LOP Act 1925 and not LRA 2002 and

2) Pender may not have supplied the full and necessary evidence to demonstrate the nature and extent of the securitisation as a FULL transfer of title rather than merely beneficial interest and

3) a deeper understanding of the rights of the lender, the trustee and the SPV in enforcing a repossession claim.

Or did the justices in effect say that it does not matter that the SPV's charge had not physically been registered at the Land Registry?

Looking at this with different eyes, I have some experience with conveyancing and I have to say that I have have seen sales go though where it has taken several months (up to 6 or more) for the transaction to be formally registered at the land reg and no one seemed to kick up a fuss. I've even heard of cases where the conveyancer failed to register the transaction at all (pls don't ask me why) and the poor homeowner only found out when they either wanted to remortgage or sell the property!

On reading SS's arguments and the likes of Carmel Butler on the LRA 2002 and the issue of violation of the proper registration of title on the charges register (which it has to be for these securitisation defences/challenges to stand any chance), I am suprised the LR itself seems to be somewhat benign over how it handles this aspect of its work.

[bustthematrix]

Suetonius = From the view point of the judicial system, it may be beneficial to remember that the Riley case was in a County Court, whereas the Paragon Case was held at a higher judicial level. Therefore, in relation to section 114 wouldn't it be reasonable to assume that the judgement of a Lord Justice would take priority over a judgement of a County Court?

I'm not a lawyer but I think that's how it works. However, it's also true that case law is most applicable when the facts and circumstances surrounding rulings are most similiar.

It may be the case that this is not always the same and may vary between different lenders and different SPV's.

Again I'm not an expert on securitisations but I do know that the way they are packaged and bundled into tranches and sold to investors, it would be to lenders' advantage to standardize transfers as much as possible to make sales and buy back easier.

They cover their tracks well cos they don't want the mug punters to clue up - but these charades all have a sell by date.

[Suetonius]

Suetonius = From the view point of the judicial system, it may be beneficial to remember that the Riley case was in a County Court, whereas the Paragon Case was held at a higher judicial level. Therefore, in relation to section 114 wouldn't it be reasonable to assume that the judgement of a Lord Justice would take priority over a judgement of a County Court?

I'm not a lawyer but I think that's how it works. However, it's also true that case law is most applicable when the facts and circumstances surrounding rulings are most similiar.

 

It may be the case that this is not always the same and may vary between different lenders and different SPV's.

Again I'm not an expert on securitisations but I do know that the way they are packaged and bundled into tranches and sold to investors, it would be to lenders' advantage to standardize transfers as much as possible to make sales and buy back easier.

 

They cover their tracks well cos they don't want the mug punters to clue up - but these charades all have a sell by date.

 

Totally agree...

 

When I first read this thread it appeared to be very one sided, I thought I would take the opportunity to play devils advocate (my usual role) and show that there are two sides to every story.

 

For some reason the judgements detailed in the 2005 case (not the 2003 application to appeal case) seemed to be totally ignored and I was not quite sure why. Especially as it refers to the points of law as discussed in this thread and the SPML thread.

[bustthematrix]

Just one more post before I scoot off.

 

Suetonius, are you aware of some of the successes people have been having in the US using a similiar line of argument? Over there they call it the 'produce the note' strategy.

 

See

 

http://webofdebt.wordpress.com/2008/07/30/standing-up-to-the-banks-how-to-challenge-your-foreclosure-in-court/

 

and

http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/.

When I say successes, I mean stopping repossessions, suspending mortgage payments and maybe renegotiating the terms - not necessarily cancelling the mortgage.

 

I'm sure we'll eventually find a way to do the same things here, even if it's not through the LRA 2002 breaches. Why? because what they've done is based on greed and deceit and where those two are found together, there'll be something illegal in there somehow. Just have to keep digging!!!

Edited March 25, 2009 by vincenta

[Suetonius]

Just one more post before I scoot off.

 

Suetonius, are you aware of some of the successes people have been having in the US using a similiar line of argument? Over there they call it the 'Show me the note' strategy. See http://webofdebt.wordpress.com/2008/07/30/standing-up-to-the-banks-how-to-challenge-your-foreclosure-in-court/ and http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/. When I say successes, I mean stopping repossessions, suspending mortgage payments and maybe renegotiating the terms - not necessarily cancelling the mortgage.

 

I'm sure we'll eventually find a way to do the same things here, even if it's not through the LRA 2002 breaches. Why? because what they've done is based on greed and deceit and where those two are found together, there'll be something illegal in there somehow. Just have to keep digging!!!

 

Yes, I am aware of what has happend on the other side of the pond and we do normally follow where America leads. But we still have to bear in mind the points made in relation to the specific legisation.

 

I personally do not consider that it should be ignored or brushed under the carpet

[supersleuth]

Totally agree...

 

When I first read this thread it appeared to be very one sided, I thought I would take the opportunity to play devils advocate (my usual role) and show that there are two sides to every story.

Suetonis,

 

It's been very helpful to have CAGgers that argue for the lenders. Thank you Vincenta and Suetonis for your contributions.

 

Supersleuth

[Last of the Mohicans]

Yes, I am aware of what has happend on the other side of the pond and we do normally follow where America leads. But we still have to bear in mind the points made in relation to the specific legisation.

 

I personally do not consider that it should be ignored or brushed under the carpet

 

We should bear in mind that Capone went down for.... sh*te book-keeping.

 

I second SS's motion on your input BTW.

[bustthematrix]

Take it easy gents. I for one never described myself as devils advocate and I definitely do not come on these boards to argue for lenders.

 

It is only wise to be aware of what defences the other side might employ when bringing a case. To be forewarned is to be...

 

For me, there's plenty of hope and I certainly did not realise my tone seemed pro lender.

 

For Scedminc and others who need this thread to get the case specific support they need, I wonder if there's a better thread to post the more deliberative ideas on? Pls let me know anyone - thanks.

Edited March 26, 2009 by vincenta

[kegi]

Vincenta and Suetonis

I for one have not taken your postings as anything other than adding to the debate as to which way is the better to bring an end to this debarcle of repo's etc that should not be happening avoiding any of the land mines they have laid for us to step on.And have said myself that what was said in the pender case showed us what the judges think of the borrower..zilch And whats been said of the LR is true again so to repeat myself unless someone has a member of the family who is a cc judge it will be a uphill struggle but one that must in the end prevail with the right support from all cag members ?and mystic meg;)Even the rich and famous have ended up in jail for breaking the law . My view only ? Peace

 

kegi

[supersleuth]

Hi Kegi,

 

Your post gets my vote. One of us will break through at some point. Peace to all so that we will all sleep well in our homes.

 

Supersleuth