Mortgage Securitisation - Preferred

[midge61]

Their answer is to seek advice from a financial advisor but that is no good if you cannot remortgage because of poor credit history.

 

I think you are right jonchris it may be worth trying that approach.

[Suetonius]

Their answer is to seek advice from a financial advisor but that is no good if you cannot remortgage because of poor credit history.

 

It may be the case that they only offer rate switches "with advice", therefore, an application for a rate switch would have to be made via an IFA.

 

I know that IFA's have access to an online system. From memory, I think it is called something like DIP. Bascially, it allows them to see the rates offered by each lender.

[JonCris]

Correct Sue...............however I think midge's point is as mine in that despite what the lender claims at the outset of the loan NO meaningful help can be offered under the terms of the securitization contract

 

You comments on 'unfair relationship' would be welcome

[Suetonius]

You comments on 'unfair relationship' would be welcome

 

It would hard to say without knowing how the securitisation changed the relationship between lender and borrower (in a particular instance). I say this because, the mortgage would still be subject to the same applicable rules and regulations whether it was securitised or not. Therefore, I am unsure what adverse effect, if any the securitisation process does actually have. (but it is something I will look into.

 

Usually the bonds are due to mature at a given point, far off in the future so as more interest is payable over a longer period or time, it would be in the financial interests of the parties involved in the securitisation process for the mortgage to continue, rather than end at an earlier date.

[Smarterchick]

It would hard to say without knowing how the securitisation changed the relationship between lender and borrower (in a particular instance). I say this because, the mortgage would still be subject to the same applicable rules and regulations whether it was securitised or not. Therefore, I am unsure what adverse effect, if any the securitisation process does actually have. (but it is something I will look into.

 

Usually the bonds are due to mature at a given point, far off in the future so as more interest is payable over a longer period or time, it would be in the financial interests of the parties involved in the securitisation process for the mortgage to continue, rather than end at an earlier date.

 

 

How would that fit then with what Supersleuth states that the lenders are hell bent of getting repo and the mortgages paid off?

[JonCris]

Sue my point is that the relationship is not as claimed by the lender when the mortgage is securitized in that the manager (Capstones SMPL) etc do NOT have the flexibility to comply with the terms or perhaps a better term would be promises made at the outset should the borrower fall on hard times In other words the relief they can offer is very very limited.

 

They cannot for example rescheduled the loan because the manager has no power to agree to such an arrangement

[Suetonius]

How would that fit then with what Supersleuth states that the lenders are hell bent of getting repo and the mortgages paid off?

 

I am not personally convinced that this is related to securitisation. I personally think it has more to do with the current state of the mortgage lending market at the moment. (all lenders are restricting lending and withdrawing product switches)

 

It would not make business sense for the bond holders to force the lender to seek repossession. The bond holders make profit on the interest paid on the money they have invested. The longer the funds are invested the more money they make.

 

To me, it just does not make any business sense for a bond holder to want a house to be repossessed and sold for what will most likely be a loss (but then again there are a number of points I disagree with SS about).

 

To truely understand securitisation, I think we need three people

 

1) An Accountant

2) A solicitor (with experience of securitisation in the UK)

3) A Banker

 

I think all three are part of the same puzzle

Edited April 7, 2009 by Suetonius

[Suetonius]

Sue my point is that the relationship is not as claimed by the lender when the mortgage is securitized in that the manager (Capstones SMPL) etc do NOT have the flexibility to comply with the terms or perhaps a better term would be promises made at the outset should the borrower fall on hard times In other words the relief they can offer is very very limited.

 

They cannot for example rescheduled the loan because the manager has no power to agree to such an arrangement

 

The capstone / SPML relationship is not related to securitisation. Capstone Mortgage is the administration arm of SPML (Southern Pacific Mortgages Limited) which provide first charge mortgages and was the administration arm of SPPL (Southern Pacific Personal Loans) which provided second charge loans.

 

(remember that Preferred Mortgages and London Mortgage Company were part of the club aswell)

 

The problems with Capstone / SPML, I suspect are more related to the collapse of Lehman Brothers. I don't think the mortgage offers, contractually obligate them to provide product switches etc. (obviously in relation to arrears etc there are still rules that they do have to comply with)

 

As far as I am aware SPML are not providing any lending to new customers. It would appear that they may be doing everything they can to get rid of the mortgages they do have at the moment, preferably through repayment than selling the entire loan to a new lender.

 

This would make sense as they would most likely make more money (early repayment charges etc) if the mortgages are repaid by the borrow than selling the mortgage book to a different lender

Edited April 7, 2009 by Suetonius

[JonCris]

sue whilst I understand your comments I think you may be overlooking the fact that when confronted by a borrower, about to be repossessed, regarding securitization the 'lender' appears to back off. This being the case leads me to ask the question why - if it's as straightforward as you say then why not just get on with the repo - no there must be a reason as to why they don't want their involvement disclosed in court - & I can't for the life of me think what it is, can you?

[Suetonius]

sue whilst I understand your comments I think you may be overlooking the fact that when confronted by a borrower, about to be repossessed, regarding securitization the 'lender' appears to back off. This being the case leads me to ask the question why - if it's as straightforward as you say then why not just get on with the repo - no there must be a reason as to why they don't want their involvement disclosed in court - & I can't for the life of me think what it is, can you?

 

 

In paragon v pender (all three of them), MBNA V customs and the Cap1 tribunial it was out in the open about securitisation and it was detailed in each instance.

 

Are there people on CAG that have add lenders back off, when the have questioned securitisation ?

 

I have only really been following this one thread, so apologies in advance if I have missed something else where. (I tend to only concentrate on one at a time.. and I struggle to keep up with this one)

[JonCris]

Sue Yes they are on here - I'll try & find them at more civilised hour

[Suetonius]

Sue Yes they are on here - I'll try & find them at more civilised hour

 

What are you still doing up at the hour ???

 

Ignore my post, it was late and i totally misunderstood what you said... I am going to my bed before I make anymore stupid mistakes.

Edited April 8, 2009 by Suetonius

[IS IT ME?]

SS that is what I've said all a long. when we were in court for repro I asked the question do you own our mortgage still? answer its not relevant to this case the judge stated it should be, we will break for lunch and continue at 2.

 

The lender then stuck a deal with me which thinking on it now was so stupid now that I think about it and the one thing I regret but I signed an agreement

and I am now going after them for the ERC of £14K which is some thing for nothing and no one can tell me what its for or why it there and that is what people should be going after them for.

 

100 repo's at £14K to £20K each not bad and that's why they do the repo's as quick as they can.

As I say you will NEVER be told what is going on as it will come down like the Bank charges.

[Smarterchick]

ERC's have already been put to the test and it would be unwise to take that on - just search the site. Which lender did you do the court case with IIM?

[IS IT ME?]

Yes that was because' the borrower redeemed early ' and not because of a repo which the borrower had any say in.

and this is why I say that the lender could not do any thing becuase they do not own these mortgages any more

what cases are you writing about were some one has loss there case?

[Smarterchick]

Yes that was because' the borrower redeemed early ' and not because of a repo which the borrower had any say in.

and this is why I say that the lender could not do any thing becuase they do not own these mortgages any more

what cases are you writing about were some one has loss there case?

 

 

Okay, I see what you mean, I won't get into ERC's on this thread, but I get the drift..

 

I was just wondering which lender struck the deal with you when you mentioned securitisation and whether it was 1st mortgage or sub-prime loan....I believe there will be differences emerging between the two as you can hardly compare the way they do things High St against Sub-Primes...Pm me if you'd prefer to keep it off forum.

 

SC

[bustthematrix]

....Pm me if you'd prefer to keep it off forum.

SC

All the juicy bits off forum!

 

Sub-prime and first charge are two different things.

 

1st Charge means principal mortgage holder or the entity which FIRST registers it's legal charge at the Land Registry.

There is therefore, also 2nd and 3rd charge lending. This is simply lending behind the 1st charge in whatever order.

 

Sub-prime - usually means non High St lending or lending where the borrower has some adverse credit. As a result the rates and terms are less favourable as the borrower has less options.

Any or a mix of the charge types from 1st to 3rd or beyond can be Sub-prime but not necessarily so.

Edited April 8, 2009 by bustthematrix

[bustthematrix]

Have you tried sending an email to:

[email protected]

And asking him what you are supposed to do ?

This is the email address for complaints for SPML as advised by the FSA.

 

I think you miss the point here Sue, these lender types are ALL the same when it come to speed to repossession, adverse charges and interest added and general unhelpfulness towards borrowers in difficulty. I don't think the lack of help Midge has experienced has anything to do with not asking the right people in the organisation! It has to do with their collections policy(aka protecting the real note holders)!!!

 

As to your point that SPV investors (bond holders) would prefer a mortgage to run it's term - that's absolutely right...BUT ONLY if there there NO serious issues of default risk! Once the three months in arrears (usually in succession but not always) trigger is hit, these lenders move to repossess very very quickly for the good reason of cutting losses and safeguarding the investor. The risk of losing capital paid is far worse than loss of potential future income!!!

[littledotty27]

We got a sub prime lender due to OH being self employed,we never had any adverse credit before.

I wish we had have stopped with our high st lender now.

[bustthematrix]

Sue my point is that the relationship is not as claimed by the lender when the mortgage is securitized in that the manager (Capstones SMPL) etc do NOT have the flexibility to comply with the terms or perhaps a better term would be promises made at the outset should the borrower fall on hard times In other words the relief they can offer is very very limited.

 

They cannot for example rescheduled the loan because the manager has no power to agree to such an arrangement

JC I would agree with this. There have even been stories of lenders on their way to repossess refusing to accept lump sum payments and settlement arrangements. Why? There was good equity in the property and the lender wanted to continue adding arrears fees & charges and additional interest AND the ERC and STILL go for repossession at the higher amounts!!!

[bustthematrix]

For me the following still remain issues worth further exploitation:

 

a) Why the lenders are VERY reticent to provide any details to a borrower of their mortgage securitisation. If it's all fair and above board as Suetonius alleges this should not be necessary.

b) The apparent 'change' in the nature of the relationship after a lender securitises. There are serious questions to ask about their ability to maintain 'responsible lending' and 'treating customers fairly' duties when the lender is no longer the owner of the loan.

[Smarterchick]

All the juicy bits off forum!

 

Sub-prime and first charge are two different things.

 

1st Charge means principal mortgage holder or the entity which FIRST registers it's legal charge at the Land Registry.

There is therefore, also 2nd and 3rd charge lending. This is simply lending behind the 1st charge in whatever order.

 

Sub-prime - usually means non High St lending or lending where the borrower has some adverse credit. As a result the rates and terms are less favourable as the borrower has less options.

 

Any or a mix of the charge types from 1st to 3rd or beyond can be Sub-prime but not necessarily so.

 

 

All the juicy bits off forum! Aww... sowweee...just a lot of trolls hang about here and sometimes and it doesn't pay to say too loudly who you might be dealing with. I've had no response if it makes you feel any better. This securitisation issue is gaining a pace...

 

Anyway, thanks for explaining the different types of lenders and charges for people, it's always useful to have this spelt out, but I was merely implying that the difference in the admin procedures between High St and Sub Prime lenders as far as legal documentation is concerned is widely different and where I see, if we were to begin challenging them, the legalities will show themselves for what they are. Have you looked at some of the Loan agreements drawn up by some of these sub prime lenders? Mickey Mouse would be proud of some of them. Imagine what their securitisation sales documents to the SPV's might be like if and when we get our hands on them.

 

But I agree with you BTM - repos come at the same speed and with the same intensity - the only difference might be public image with the high street lenders not wanting to be shown as being ruthless with repo's - Sub Prime couldn't give a monkeys toss what they do or about their reputation.

[bustthematrix]

If I am honest and I am not saying this to burst anyone's bubble but I would say no (please see point one below). There is one specific reason, as far as I am aware that the foreclosures were unsuccessful in America.

The US cases were not dismissed due to lender failings in regard to securitisation issues. It was to do with proper execution of the mortgage contracts and the lender's inability to PROVE that they had the right to enforce possession of the debts when challenged.

I think therefore your following points listed above as to why this might not work in the UK are flawed simply because they focus purely on the securitisation aspect and the differences b/w US and UK securitisation.

To make progress in the debate, we really need to be looking at ways to show lenders may not have the right to enforce possession! Many of the guys who can't foreclose in the US are the same ones who came over here to slice and dice our mortgages.

Carmen Butler was on to something that needs more probing and JC's comments on Champerty and lender obligations offer some hope.

Keep digging folks. We all smell a rat and something will out soon enough...

[bustthematrix]

All the juicy bits off forum! Aww... sowweee...just a lot of trolls hang about here and sometimes and it doesn't pay to say too loudly who you might be dealing with. I've had no response if it makes you feel any better. This securitisation issue is gaining a pace...

No worries, as long as you keep being Superchick, no worries at all.

[mercyblue]

SPV's certainly DO NOT expect or want the mortgage to go its full term as SS as pointed out on more than one occasion (not sure if this thread however). That is what he/she means by an unfair contract they NEVER had any intention of really giving you a 25year mortgage.

All Securitisations (it would seem) involve a concept called CPR or conditional prepayment rate

http://www.riskglossary.com/link/prepayment.htm

 

Have a look here at some uk cpr's from aug 08

 

http://www.markit.com/information/products/abs/weekly-review-21-aug-08/collateral_performance2.html