Mortgage Securitisation - Preferred

[Suetonius]

If the mortgages are put into a securitisation pool and the lender gets the full value which they do, because the bond holders only get some of the interest we pay ie, 7% they get say 3%,

THEN and this is the part, the ERC can NOT be any loss to the lender or the bond holder as they have NOT lost any money in the deal

 

The lenders appear to argue that you entered into a contract to pay (using the above) 7% interest, for whatever period of time (be it 2,3 or five years)

 

Therefore the amount payable by you under that contact is £xxx

However, if you redeem your mortgage early, you have only paid £xxx

 

Which means that the amount payable under the contract is reduced and represents a loss. The ability to redeem your mortgage, is a contractual right and the lenders argue that the ERC is a fee payable to exercise that right.

 

They argue that as it is a contracual right to redeem your mortgage, the ERC is therefore not a penalty for breach of contract.

 

It would appear that the High Court accepted this argument.

 

 

Now, I am not saying this is right, as I personally don't agree with ERC's. However, I have posted this answer to nip this in the bud now, so that you don't keep asking the same question over and over again.

[Smarterchick]

The lenders appear to argue that you entered into a contract to pay (using the above) 7% interest, for whatever period of time (be it 2,3 or five years)

 

Therefore the amount payable by you under that contact is £xxx

However, if you redeem your mortgage early, you have only paid £xxx

 

Which means that the amount payable under the contract is reduced and represents a loss. The ability to redeem your mortgage, is a contractual right and the lenders argue that the ERC is a fee payable to exercise that right.

 

They argue that as it is a contracual right to redeem your mortgage, the ERC is therefore not a penalty for breach of contract.

 

It would appear that the High Court accepted this argument.

 

 

Now, I am not saying this is right, as I personally don't agree with ERC's. However, I have posted this answer to nip this in the bud now, so that you don't keep asking the same question over and over again.

 

 

 

Now that you have explained quite throughly that IS IT ME..cannot reclaim his ERC...would you mind having a look at mine and seeing if I can? :D:D:D

 

Sorry, only kidding

[bustthematrix]

Mortgages are not subject to the Banking Code. In relation to the applicable rules, it would depend if it was pre or post 31 October 2004. (I need to have a quick read of them, it has been a while)

Wow, been away a while and behold, some 112 posts later, the thread continues to thrive.

 

In regard to applicable code of conduct rules, JC/Suetonius you may want to have a look at the Mortgage Conduct of Business (MCOB) rules and also the FSA handbook since they regulate the lenders.

 

http://www.fsa.gov.uk/pubs/hb-releases/rel61/rel61mcob.pdf

and

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[bustthematrix]

I know, Seutonius, Littledotty, uneverdid, Scedminc, Supersleuth et al, and me - we're just a waste of time

Oi, you forgot to mention moi!!!

What about all me dandy contributes...or should I keep 'em to meself going forward

 

lol

[bustthematrix]

Again it states that all legal rights have been transferred though.

Where does it state this O wee diligent one?

[Suetonius]

Wow, been away a while and behold, some 112 posts later, the thread continues to thrive.

 

In regard to applicable code of conduct rules, JC/Suetonius you may want to have a look at the Mortgage Conduct of Business (MCOB) rules and also the FSA handbook since they regulate the lenders.

 

http://www.fsa.gov.uk/pubs/hb-releases/rel61/rel61mcob.pdf

and

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Hello Bustthematrix,

 

I know there is no stopping this thread

 

This is post 566 (MCOB rules are part of the FSA Handbook)

 

Mortgage Code

 

(section 8 would appear to be applicable)

 

MCOB (FSA rules)

 

MCOB 13 Arrears & Repossession

Council of Mortgage Lenders

 

1)CML statement of practice - Handling of arrears and possessions

2)Industry guidance on arrears and possessions to help lenders comply with MCOB 13 and TCF principles

[Smarterchick]

Oi, you forgot to mention moi!!!

What about all me dandy contributes...or should I keep 'em to meself going forward

 

lol

 

 

Sorry Bus, you fell into the 'et al' contingent

[Suetonius]

Now that you have explained quite throughly that IS IT ME..cannot reclaim his ERC...

 

I don't think it will that easy

[Suetonius]

Oi, you forgot to mention moi!!!

What about all me dandy contributes...or should I keep 'em to meself going forward

 

lol

 

I wouldn't worry about it, I think there is something "secret" going on there

[Suetonius]

Where does it state this O wee diligent one?

 

Page 323 after it has detailed securitisation and talks about secondary transactions

[bustthematrix]

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.

......

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

......

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

Fabulocious. Another stream develops...I think most of us on here have been of the mind that unfair relationships exist and certain 'decencies' have been breached. We were just looking for it's form.

 

It's interesting to note that in the US, they've not just been using the 'produce the note' strategy but also something called the Truth in Lending Act (TILA). See Re: Cancel your Mortgage! Discover the Power of T.I.L.A.!

 

To my knowledge (or ignorance:D) the TILA does not exist in the same format in the UK but the same principles of fairness, equity, consumer protection etc - which it addresses are echoed in various bodies of legislation over here. Pointers to some of these may be found in posts #566 and #598.

 

I think this could be a promising area for further investigation for points where lenders may have breached the rules. In the US, claimants assert that lenders regularly perpetrate 20 or more violations of TILA and it is on that basis that they bring successful claims - and usually negotiate down debts and obtain better terms. It would not suprise me to find out that outright contract cancellations have taken place and lenders have had to walk away.

[bustthematrix]

Hello Bustthematrix,

 

I know there is no stopping this thread

 

This is post 566 (MCOB rules are part of the FSA Handbook)

 

Haha don't think I'd read your post 566 when I posted mine...sorrreee

[bustthematrix]

I wouldn't worry about it, I think there is something "secret" going on there

aahhh the plot thickens...

[IS IT ME?]

Sue,

I find your post most rude and some think which belittles this site.

 

I have the RIGHT to ask questions and NOT to be made fun of or made fun of.

I said once before I think you work for one of the lenders or in the money market your posts have only strenthed this.

As you have not put any thought or answers on how people can fright repo's just make fun of them.

Well I HAVE COME UP AGAINST JUDGE KAY qc if you looked at his chambers profile it answers a question and I FOR ONE HAVE HAD ONE OF HIS DICISSIONS OVER TURNED IN THE COURT OF APPEAL.

There is also an appeal going though the courts at this time on his dicission as when the borrower has to redeem the mortgage because of a repo it is NOT the same as there right to redeem.

 

I just wish you would put in as much efornt into doing something to help people fright lenders as you do to being rude.:evil:

[Suetonius]

Sue,

I find your post most rude and some think which belittles this site.

 

I have the RIGHT to ask questions and NOT to be made fun of or made fun of.

I said once before I think you work for one of the lenders or in the money market your posts have only strenthed this.

As you have not put any thought or answers on how people can fright repo's just make fun of them.

Well I HAVE COME UP AGAINST JUDGE KAY qc if you looked at his chambers profile it answers a question and I FOR ONE HAVE HAD ONE OF HIS DICISSIONS OVER TURNED IN THE COURT OF APPEAL.

There is also an appeal going though the courts at this time on his dicission as when the borrower has to redeem the mortgage because of a repo it is NOT the same as there right to redeem.

 

I just wish you would put in as much efornt into doing something to help people fright lenders as you do to being rude.:evil:

 

I guess I won't be getting any reps points from you then

[IS IT ME?]

what do you think!:evil:

[Suetonius]

what do you think!:evil:

 

I would refer you to the teachings of the great Lauren Cooper:cool:

[JonCris]

Hello Joncris, sorry I took a day off yesterday.

 

I was under the understanding (more likely misunderstanding) that the indemnity principle was in relation to costs.

 

Not just costs but also damages. There has to have been a genuine loss for there to be a liability

[JonCris]

IS IT ME if there's an appeal would it not be better to wait until it's heard?

 

& that way you could possibly then even invoke the unfair relationship angle as the OFT indicated some months ago they ain't happy with the terms of ERC

[Suetonius]

Haha don't think I'd read your post 566 when I posted mine...sorrreee

 

I know what you mean, you leave this thread for 5 mins and your suddenly behind and got so much reading to do..

[Suetonius]

Fabulocious. Another stream develops...I think most of us on here have been of the mind that unfair relationships exist and certain 'decencies' have been breached. We were just looking for it's form.

 

It's interesting to note that in the US, they've not just been using the 'produce the note' strategy but also something called the Truth in Lending Act (TILA). See Re: Cancel your Mortgage! Discover the Power of T.I.L.A.!

 

To my knowledge (or ignorance:D) the TILA does not exist in the same format in the UK but the same principles of fairness, equity, consumer protection etc - which it addresses are echoed in various bodies of legislation over here. Pointers to some of these may be found in posts #566 and #598.

 

 

I think this could be a promising area for further investigation for points where lenders may have breached the rules. In the US, claimants assert that lenders regularly perpetrate 20 or more violations of TILA and it is on that basis that they bring successful claims - and usually negotiate down debts and obtain better terms. It would not suprise me to find out that outright contract cancellations have taken place and lenders have had to walk away.

 

Now I have more reading up to do

Edited April 11, 2009 by Suetonius

[Suetonius]

Not just costs but also damages. There has to have been a genuine loss for there to be a liability

 

Good Evening, JonCris,

 

Thanks, I thought there must have been more to it, I was only going by the Supreme Courts Costs Guide.

 

2.6 The Indemnity Principle The principle is that a successful party cannot recover from an unsuccessful party more by way of costs than the successful party is liable to pay his or her legal representatives. There are several exceptions to the principle including the statutory exceptions concerning legal aid and conditional fee agreements. There have been calls for the total abolition of the principle. Unless and until that occurs the following three propositions continue to apply: (i) A party in whose favour an order for costs has been made may not recover more than he is liable to pay his own solicitors: Harold v SmithGundry v Sainsbury [1865] H&N 381 at 385 and [1910] 1KB 645 CA. (ii) Where a party puts a statement of costs before the court for summary assessment that statement must be signed by the party or a legal representative. The form states: "The costs estimated above do not exceed the costs which the [party] is liable to pay in respect of the work which this estimate covers." (iii) The signature of a statement of costs or a bill for detailed assessment by a solicitor is in normal circumstances sufficient to enable the court to be satisfied that the indemnity principle has not been breached in respect of costs payable under a conventional bill: Bailey v IBC Vehicles Ltd [1998] 3 All ER 570 CA. However, the same may not be true in respect of costs payable under a conditional fee agreement: Hollins v Russell [2003] 1 WLR 2487.

[Suetonius]

Sue,

I find your post most rude and some think which belittles this site.

 

I have the RIGHT to ask questions and NOT to be made fun of or made fun of. I said once before I think you work for one of the lenders or in the money market your posts have only strenthed this.

As you have not put any thought or answers on how people can fright repo's just make fun of them.

 

 

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.

 

Well I HAVE COME UP AGAINST JUDGE KAY qc if you looked at his chambers profile it answers a question and I FOR ONE HAVE HAD ONE OF HIS DICISSIONS OVER TURNED IN THE COURT OF APPEAL. There is also an appeal going though the courts at this time on his dicission as when the borrower has to redeem the mortgage because of a repo it is NOT the same as there right to redeem.

 

As I don't know who you are that would be a little difficult. There have already been cases where the ERC has been refunded following repossession. However, as I understand it, in your own circumstances there were repossession proceedings but your home was not repossessed.

 

As you do not appear to have a thread on this topic, I have only been able to gain a limited amout of information. However, it would appear that the outcome was that you remortgaged.

 

I just wish you would put in as much efornt into doing something to help people fright lenders as you do to being rude.:evil:

 

Mr Capital Letters 2009, is call moi rude ????

 

I think you need to review the way you ask questions.

[frettful38]

I think it is very very important in the way you explain things to people that can make the world of a difference. This thread has become like good cop (JonCris) bad cop (Sue).

I think giving blunt answers can sometimes appear to be a bit rude even if not made intentionally,

Your everyday guy/gal does not understand the rules & regs of the finance/banking industry, or the true in's and outs of mortgages. And for this reason we have been used and abused by the finance and banking world so that they could make a gain for themselves. That's why the world is in the toilet at the moment. So if anyone can give any suggestions on how we can climb out of it great if not then please choose your words carefully because people are suffering at this preasent time and I know what it feels like to made fun of.

I think JonCris uses his words very wisely and maybe some of us can learn a few things from him.

[Smarterchick]

Fretfull, I understand what you say, but what you have here is distinct styles. JonCris is short and to the point, but you do not see the depth of research shown by Suetonius to back up his points. I'm not taking any sides here, but both are valuable in their own way. What I see Suetonius doing is putting the positions people take to proof...whereas JonCris will come in at a different juncture.

 

I witness Supersleuth putting forward a very convincing and compassionate case with considerable merit, Suetonius on the other hand plays devils advocate and puts it to the test, and no, some people don't like being put to the test on their convictions, but what would you prefer, an intellectual challenge on Cag free of charge with a few dented ego's or feelings or to see someone take an unresearched, ill thought out legal stand in a court which might cost them tens of thousands of pounds or possibly losing their home? - Let these debates get heated, I know Seutonius and the way he works - he is one of us as is JonCris and I know all he wants to achieve is the real legal position and if that even tests Carmel Butler herself so be it as it just strengthens their own position by knowing, free of charge what might be fired at them by a real lawyer in court. We are all stronger for everyones contribution from IS IT ME to joe blogs and believe me, no-one is trying to make fun of anyone, this is not a funny subject and perhaps if it could be seen that seutonius sees how serious it is and is just making sure nobody goes in blind then I think this whole debate will move forward better.

 

Just my own thoughts. SC

Edited April 12, 2009 by Smarterchick