Mortgage Securitisation - Preferred

[Suetonius]

Good Evening everyone, I trust we are all well..

 

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.

 

 

Is your new mortgage with a different lender or the same lender ? (don't need to know their names)

 

Do you have a thread about this ?

Edited April 9, 2009 by Suetonius

[Suetonius]

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?

 

Are these the CAG threads you are refering to Smarterchick ?

 

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/27030-harsh-letter-received-kensington.html

 

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/19662-maroonfox5-mortgage-express-lost.html

 

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/36778-charbydis-platform-claim-struck.html

 

There was also of course the case of Smith & Smith V Mortgage Express 2007. Judge Kaye QC, in the High Court, addressed the matter as follows (in a case concerning a mortgage early redemption charge) –

“In my judgment, looking at the contract as a whole, I have no doubt that this is merely a provision as to what should happen, not if the borrower broke the contract, but if the borrower elected a right to redeem the mortgage at an early stage. It was, after all, part of the package that was being offered to him.”

 

 

(please note, I am not saying what is right and wrong, just reporting what happend)

[Suetonius]

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.

 

Just to continue and further clarify the above information.

 

The number of the charge relates to the sequence that charge holders will be paid.

 

i.e 1st charge will be your mortgage (unless you don't have one then the 1st charge will mostly likely be a secured loan). This is always the first charge to be paid. 2nd, 3rd, 4th charge could be secured loans.

 

Basically if you sell your home or your property is repossessed the 1st charge holder is the first to be paid and then the second, then the third and so forth until the money runs out.

[Suetonius]

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)!!!

 

No offence bustthematrix but on this occassion it would appear you have missed my point. I was only trying to be helpful by giving Midge an avenue, down which she could seek clarification or make a complaint.

 

You say aka protecting the real note holders. However, in the current market condition of negative equity, it is possible that the house will be worth less than the mortgage. Furthermore, once the property is repossessed, it is likely that it will also be auctioned for a further loss.

Edited April 9, 2009 by Suetonius

[Suetonius]

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

Prepayment

 

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

 

Conditional Prepayment Rate is a loan prepayment rate that is equal to the proportion of the principal of a pool of loans that is assumed to be paid off prematurely in each period.

 

You have to consider the above information in the context of the mortgage market within the UK. This information also includes mortgages that have been repaid early by the borrower (naturally, unexpectedly and through repossession) and/or moved to another lender.

 

In the UK unlike some countries we have flexible mortgages and circumstances permitting will move to different lenders.

Edited April 9, 2009 by Suetonius

[Suetonius]

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.

 

Now, what I actually said was:

 

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.

 

That reason being:

 

COMPLIANCE WITH GENERAL ORDER 07-03

Federal Rule of Civil Procedure 83(a)(2) provides that a “local rule imposing a requirement of form shall not be enforced in a manner that causes a party to lose rights because of a nonwillful failure to comply with the requirement.” Fed. R. Civ. P. 83(a)(2). The Court recognizes that a local rule concerning what documents are to be filed with a certain type of complaint is a rule of form. Hicks v. Miller Brewing Company, 2002 WL 663703 (5th Cir. 2002). However, a party may be denied rights as a sanction if failure to comply with such a local rule is willful. Id. (link to case)

 

I did not make up the reason that noncompliance with general order 07-03 was the reason these claims were unsuccessful. I even included a link to one of the actual cases to confirm that this was the reason.

 

Furthermore, from the cases that I have read it was not the actual lender that was seeking repossession, it was the assignee rather than the assignor (lender) and the claims were unsuccessful because the assignee could not prove that they had the legal right to repossess.

 

(I am not sure if this is the same with all the cases, but it is with the ones that I have personally read.)

 

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.

 

I am a little confused bustthematrix, as I thought the whole debate was about the securitisation process effecting the lenders ability to repossess. On that basis, I can't understand how any of the points I raised in that post can be percieved as flawed. Especially the pender case, as it dealt with this specific issue. However, please feel free to clarify further.

 

The points I raised that showed that it was only an equitable assignment (which means that the legal right to sue remains with the lender) were:

 

 

1) 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.

 

2) 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.

 

3) Capital One tribunial

 

As mentioned above. (please see point one)

 

4) 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"."

 

This particular case in the High Court, also confirms equitable assignment.

 

5) s.136 Law of Property Act 1925*

 

"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—"

 

s.136 means that unless a notice has been given to the debtor / borrower, the assignment can only be equitable.

 

6) s.131 Land Regisitration Act 2002

 

"131 “Proprietor in possession”

(1) For the purposes of this Act, land is in the possession of the proprietor of a registered estate in land if it is physically in his possession, or in that of a person who is entitled to be registered as the proprietor of the registered estate.

 

(2) In the case of the following relationships, land which is (or is treated as being) in the possession of the second-mentioned person is to be treated for the purposes of subsection (1) as in the possession of the first-mentioned person—

(a) landlord and tenant;

(b) mortgagor and mortgagee;

© licensor and licensee;"

(d) trustee and beneficiary

 

As legal title in law has not been transferred the relationship is still mortgagor and mortgagee. Therefore the lender is still registered.

 

7) Paragon vs Pender 2005

 

Contrary to the the information previously posted by Supersleuth, this case was not an application to appeal. The application to appeal was the case in 2003

 

Confirmation from the 2005 case:

 

3) On 5 January 1995 Paragon obtained a possession order in respect of the Property. For reasons which are not material to the present appeal the possession order was not enforced, and on 21 January 2002 (some seven years later) Mr and Mrs Pender applied to set it aside. They also sought permission to appeal against the possession order out of time. On 25 November 2003 HHJ Mayer, in the Barnet County Court, dismissed both applications. Mr and Mrs Pender applied to the High Court for permission to appeal against Judge Mayer's dismissal of the application to set aside the possession order (no appeal lay from the judge's dismissal of the application for permission to appeal against the possession order).

 

4) The application for permission to appeal against Judge Mayer's dismissal of the application to set aside the possession order was listed before Peter Smith J, with the substantive appeal to follow were permission to be granted. Peter Smith J accordingly heard full argument. In the event, by his order dated 25 November 2003 he granted limited permission to appeal but went on to dismiss the substantive appeal

 

The below are three of the judgements made in this case:

 

110. 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.

 

111. 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.

 

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.

 

8 ) The Publically Avaliable Documentation

 

By using google and yahoo searches we have been able to obtain copies of the presale reports and the base prospectuses. Both of which confirm that is an equitable assignment.

 

In consideration of the above legislation, case law and supporting evidence, I am of the view that the securitisation process within the UK, would not effect the ability of a lender to instigate legal proceedings.

 

Furthermore, I am not convinced the "sales agreement" would have any real effect, I say this because a contract cannot override the legal requirements of s.136 of the Law of Property Act 1925.

 

Which still leaves the question at the end of that post

 

In response to the above eight points, can anyone provide one thing to show that the legal title in law has been assigned ?

Edited April 9, 2009 by Suetonius

[Suetonius]

I appreciate that it is easy and straight forward, for people to say that the points I have raised may be wrong, they may be flawed, that I have missed the point, or that I am alleging this and that. Especially, when it appears I am one voice against many. However, you will note that I back up the points I raised with supporting evidence, to show that it is not just my opinion.

 

But I don't see any actual evidence being posted to prove that the points I have raised are wrong or flawed. I look forward to reading everyones responses (with supporting evidence) to my latest posts tomorrow.

 

I understand and appreciate that this is an emotional topic for some. I hope that I am wrong and that this is a possible way to stop people from having their homes repossessed. However, at the same time I am a realist and I honestly do not think that it is. I say this because I have not seen anything to confirm that the legal title in law has been assigned.

 

With regard to the eight points that I have raised, does anyone think that these points are not applicable or that they can be ignored ?

 

Many Thanks

Suetonius

Edited April 9, 2009 by Suetonius

[mercyblue]

here are some figures someone might like to comment on

[midge61]

Morning

 

just to clarify what I was getting at. I have a small mortgage and plenty of equity (even now) but within 5 months of my fixed rate ending they claimed i had arrears from 2 years ago and began to aggressively demand repayment.

 

if my mortgage was with a high street lender i would of had clear statements and would of been able to negotiate with them. With Capstone this was impossible. Also most people apply for a new fixed rate or some other package but with Capstone this is not possible. So I was trying to point out that these mortgages are totally unfair and all they want you to do is repay early unlike ordinary mortgages.

 

Whilst you make good points sue and back them up the reality of these firms is quite different from what they SHOULD be.

[mercyblue]

midge that is exactly what the figures I posted above show. In the year the total loans had gone from 735m to just over 4.5 billion yet the balance was just over 4billion so 500m had been paid off in just 1year or a cpr of about 11%.

Now that is for the entire eurosail portfolio what is the cpr for the original 735m.

Furthmore look at the discrepancy between the millions (£) in arrears and the actual losses and tell me than it isn't much much more lucrative to repossess.

[IS IT ME?]

Sue, Sue,

You may be right you may not be but why don't you for some reason find the time and energy to help people find a way in which they could be right,

I would also point out that you have been unable to show the ' Mortgage Sale Agreement ' here where I fully believe all these points people raise will be shown.

We ALL know the lenders bend the rules and so called Lwa to their own interests.

But your posts are well come

[Smarterchick]

Getting the sales agreement documents needs plotting, just like was done with the DCA's- (Debt Purchasing side) when we found their sales agreements with the banks. This needs someone in litigation already who can use CPR to extract them under Disclosure proceedures, so if anyone has repo action ongoing that's the best time to obtain them. I have already asked my Mtg company to provide and they refused point blank - they have a surprise coming

 

SC - but I agree, this debate is healthy even if it leads to nothing and Sue ( Boy named Sue - Jonney Cash ) - tonius angle is extremely good, what we need is the opposite counters too - we are ALL trying to get to the same place, so getting what one sees as a negative is not necessarily so bad - lawyers do it all the time, we just need to clean the cupboard out of arguments and counter arguments with the limited knowledge we have.

 

What I'd really like to find, and Supersleuth pointed me in 'a' direction, but I still couldn't find it, is the actual place we can find the tranche of mortgages applicaable to our own individual property securitisation. Some kind of techique would be useful. That's always the hard work and we like people to do that for us, but some people have a little more time and expertise at these things.

[uneverdid]

Hi, I am a bit confused this morning. I have just received from Capstone a copy of Power of Attorney signed and dated 19/01/09. It is executed and delivered as a deed by Preferred Mortgages Limited and has an attachment with 13 names and signatures on it. There is no covering letter with it and i can only assume it has been sent to me in response to a telephone conversation i had with Capstone regarding securitization.

 

Any comments very much appreciated.

[IS IT ME?]

Smartchick,

I agree but I was so silly SILLY when I had them but there was not this site then and no one and I mean NO one would take the lenders on, what they said was law and the D/Js and judges just went along with it.

 

I know from what happened to us that there IS some thing wrong with these pe 2005 sales and as you say I for one will not give up.

 

I have SPR the lender for documents but they will not send them why?

I have asked the FOC to look into this they will not Why?( time, people so many complaints etc. etc) lol

 

Like you I can only guess as to when my mortgage was securitised and they company RFC then GMAC-RFC will not tell me why? a company with debts of £700K as per the company accounts to one which did a sale for £135m six months later if ther is nothing wrong then it should be ok to do this.

But as you say it WILL come out in time one way or another!

[scedminc]

Hi, I am a bit confused this morning. I have just received from Capstone a copy of Power of Attorney signed and dated 19/01/09. It is executed and delivered as a deed by Preferred Mortgages Limited and has an attachment with 13 names and signatures on it. There is no covering letter with it and i can only assume it has been sent to me in response to a telephone conversation i had with Capstone regarding securitization.

 

Any comments very much appreciated.

 

Are you able to upload it so we can take a look but obviously blank your personal details out?

[Smarterchick]

Hi, Does anyone know much about mortgage securitisation and how to find out if your mortgage company has sold off your mortgage without you knowing?

 

I am with Preferred Mortgages and as we all know they are serviced by Capstone. Everything is done through Capstone and I mean everything except when they took me to court Capstone did everything to do with that apart from the solicitor at court said he was there for Preferred. I really think that Preferred is a front and Capstone or something actually own my mortgage. I asked Capstone recently if they own my mortgage or if Preferred do or if not have Preferred sold my mortgage to someone else but he put me on hold and said he was going off to find out. When he came back he said he thinks Preferred own it but doesnt really know too much about securitisation. I find his reply strange.

 

I'm hoping that someone can shed some light on this subject and tell me how i can find if my mortgage was sold and whether Preferred is being used as a front?

 

Thanks.

 

 

How you getting on Scedminc with what you started here? This was your first post - what have you begun? It's good to see you still get a look-in too, thread's been developing well...Thank you, given us all something to think about...

[uneverdid]

hi, i am trying to copy and paste the documents but not having much luck.!!!!

[uneverdid]

 

 

Hi hope this has worked. I await your comments ??????????????????

[uneverdid]

You will see that it does not have any individuals details on it, it is a generic form. One size fits all so to speak

[JonCris]

I agree Sue your arguments are well founded & carry much merit based as they are on Judgments of the courts ..............however many of the counter arguments being expressed are new in that they have only ever been argued on forums like these & not yet tested in the courts

[Smarterchick]

 

 

Hi hope this has worked. I await your comments ??????????????????

 

 

So, in lay girls/boys speak, what this is, I take it is the Power of Attorney given to Capstone to undertake all and anything relating to Preferred account holders. Those TS forms, arn't they the Land Registry documents Supersleuth referred to as informing of new owner? - Something tells me is it was TS4 which I don't see on this, but nevertheless this obviously is informing you that Capstone now have the full responsibility. Question is why? is this some kind of Assignment/sale/securitisation which warrants this and does this answer any questions with regards to securitising the mortgage account? You tell me.

 

 

JonCris,

 

..............however many of the counter arguments being expressed are new in that they have only ever been argued on forums like these & not yet tested in the courts

 

What is your take or opinion on this - speak out man - say what you think

 

SC

[Suetonius]

I agree Sue your arguments are well founded & carry much merit based as they are on Judgments of the courts ..............however many of the counter arguments being expressed are new in that they have only ever been argued on forums like these & not yet tested in the courts

 

This is going to sounds like the mutual appreciation society, but I feel the comments made by JC in relation to "unfair relationships" rather than Superslueth's legal title arguments are the way to proceed.

 

If s.136 of the law of property act does apply to securitisation, then without a notice of assignment, legal / aboslute assignment cannot be achieved.

 

However, if we look at the unfair relationship angle, there are valid points that can be made.

 

Lets look at the information that is publically avaliable (prospectus)

 

"If, following a Product Switch of any Mortgage Loan in the Mortgage

Portfolio, such Mortgage Loan has caused the Seller, as a result of such Product Switch, to be in breach of any of the applicable representations and warranties and/or conditions contained in the Mortgage Sale Agreement, the Seller will, in accordance with and pursuant to the terms of the Mortgage Sale Agreement, be required to repurchase such Mortgage Loan from the Mortgages Trust on the immediately following Trust Determination Date."

 

This basically means that if a lender offers a fixed, tracker or discount rate etc (product / rate switch) to a consumer and that offer is accepted. The lender must buy back the equitable interest of that individual mortgage.

 

Now the question is, would this requirement make a lender less willing to offer a product switch if the mortgage had been securitised ?

 

It is does, then the securitisation process would have had an adverse effect on the lender borrower relationship.

[Suetonius]

I would also point out that you have been unable to show the ' Mortgage Sale Agreement '

 

Trust me I have been looking hard on Google and Yahoo;).

 

At the same time, I would like to point out that no one else has been able to show the "mortgage sale agreemetn". However, even if the agreement did state in black and white some to the effect of

 

"We know what we said in the presale report and the prospectus, but we didn't really mean equitable assignment, what we really mean was legal assignment." (or words to that effect)

 

This would in itself overide the requirement for a notice of assignment to be sent to the borrower as per s.136 of the Law of Property Act. Without such a notice (if s.136 applies) the assignment can only be equitable.

[Suetonius]

here are some figures someone might like to comment on

 

You have to remember that in the UK, we (if the lender allows) switch to different rates every 2-5 years. Whenever a rate / product switch occurs, the equitable interest is repurchased from the pool of mortgages. Therefore, this has a direct impact upon the performance figures.

[Suetonius]

Morning

 

just to clarify what I was getting at. I have a small mortgage and plenty of equity (even now) but within 5 months of my fixed rate ending they claimed i had arrears from 2 years ago and began to aggressively demand repayment.

 

if my mortgage was with a high street lender i would of had clear statements and would of been able to negotiate with them. With Capstone this was impossible. Also most people apply for a new fixed rate or some other package but with Capstone this is not possible. So I was trying to point out that these mortgages are totally unfair and all they want you to do is repay early unlike ordinary mortgages.

 

Whilst you make good points sue and back them up the reality of these firms is quite different from what they SHOULD be.

 

The companies for which Capstone administer mortgages (SPML etc) have withdrawn from providing mortgages to new customers. (click link for confirmation). They have also withdrawn most of their product switch products. This is not because of securitisation, this is because of the collapse of Leham Brothers.

 

They are effectively, in the course of running down and would prefer for the mortgages to be repaid by the borrow (erc's will be payable etc) and moved to a new lender, rather than for the mortgage book to be sold as it is more profitable for them.