Mortgage Securitisation - Preferred

[IS IT ME?]

A whole new game

Whole loan sales have become an important part of the UK mortgage market, driven partly by increased investor demand for residential mortgage-backed securities and the entry of investment banks into the sector. Rachel Wolcott reports

Whole loan sales and trading has formed the backbone of the US mortgage market for years, with the first deals surfacing in the late 1940s. Until recently, it remained largely a US phenomenon - but that is now changing. Whole loan sales is gaining traction in the UK, as lenders seek to diversify their funding beyond securitisation and bank capital or, in the case of building societies, deposits.

Mortgage portfolio trading has been practised quietly in the UK among building societies for at least 20 years. Early deals were executed to diversify risk in building societies' mortgage books, as well as to increase their business. While building societies continue to be active buyers and sellers of mortgage portfolios through whole loan sales, newer entrants into the UK mortgage market - mainly investment banks and lenders with experience of US whole loans - are behind the recent burst of activity.

Whole loan sales involve the sale of a pool of loans from a mortgage lender to another institution, usually at a premium. This means originators can realise an immediate profit by selling the pool of loans at higher than face value. At the same time, lenders are able to free their balance sheets, creating capacity for new lending. Last year, as much as £20 billion of whole loan sales were completed in the UK, according to rating agency Standard & Poor's - and that figure is set to be eclipsed this year.

GMAC-RFC - a wholly owned subsidiary of Minneapolis-based Residential Capital Corporation, in turn part of General Motors Acceptance Corporation - is one of the largest traders of whole loan portfolios. The firm has been active in the UK market since 1998, and uses a blend of securitisation and whole loan sales for funding. "We have adopted our parental model in the US, which is a create-and-trade strategy," says Craig Beresford, director of asset sales at GMAC-RFC. "We've adapted that for the UK, where we originate the loans, and then we trade them out of the business to our partners in the rest of the world."

Whole loan sales also give lenders another way to manage risk. "Obviously, you retain some credit risk in a securitisation, but you also retain legal, origination, compliance and regulatory risk," says Beresford. "With whole loans, you don't. You sell all the risk. We have a good blend and a good method for managing the risk we retain on the balance sheet connected with the company."

GMAC-RFC is credited with leading growth in UK whole loan trading, bringing liquidity to the market and opening it up for other lenders. "GMAC and the proportion of assets it sells has helped boost the market," says Mark Wilten, group treasurer at London-based Kensington Group, a UK sub-prime mortgage lender. "Our growth in terms of what we sell has helped, as well as the growth in the overall breadth and depth of the investor base. The increased demand means the new non-lending financial institutions can come in and act as buyers."

Kensington last year originated £3.5 billion in new business and sold £740 million worth of mortgages to a mix of investment banks and building societies. This year, the lender has already sold £420 million of mortgages. Like GMAC-RFC, Kensington uses whole loan sales as part of its funding mix.

"We tend to sell the lower-yielding mortgages," says Wilten. "We find at the lower end of the adversity scale - the near-prime collateral - the cost of originating business is lower and the margins are lower, irrespective of the inherent risk within those loans. It's the lower end of the adversity scale that provides the best results in terms of selling collateral, and (there is) strong demand."

 

A couple of factors have accelerated the growth of the UK whole loan sales market. As well as GMAC's influence in pushing the market forward, there's been huge demand for residential mortgage-backed securities (MBS) from investors. That demand has prompted investment banks to seek out mortgage portfolios to buy and securitise. "The market has grown almost beyond recognition," says Beresford. "Kensington and some of the other larger building societies were able to step in and take advantage of the fact that there are a whole suite of potential investors crying out for assets and nobody had them to sell, so we stepped straight in there."

 

In 2001, GMAC-RFC sold £40 million worth of mortgages. That rose to £3.2 billion in 2005. This year, it has already sold more loans in the first half than it sold last year. Most recently, it sold a £250 million portfolio to Amber Homeloans, a North Yorkshire-based lender. This comprised a blended pool of prime, buy-to-let and self-certification products.

 

"There is strong demand to purchase assets," says Kensington's Wilten. "We see good bids for these portfolios. It's much more from an overall demand perspective that we see the real change in the dynamics and drivers of the market. It's the number of people out there and the volume of demand they have that's changed quite dramatically over the past two years."

 

Much of this demand for mortgage portfolios has come from investment banks entering the UK mortgage market through outright purchases of UK mortgage lenders, or through the creation of conduits that buy mortgages then securitise the loans. Bear Stearns, Citigroup, Lehman Brothers, Merrill Lynch and Morgan Stanley have all acquired UK mortgage lenders over the past six years, mainly in the non-conforming sector of the market (Risk February 2006, pages 36-38). Non-conforming lenders provide mortgages to customers that traditional lenders tend to shy away from, such as those with impaired credit ratings.

 

One reason the UK mortgage market - and the rest of Europe - is so interesting to investment banks is that it represents an attractive way to generate returns as fee streams dwindle in their traditional businesses, such as plain vanilla securitisations. By buying UK lenders, US investment banks are able to get direct access to a steady stream of mortgage loans, which they can then securitise.

 

Lehman Brothers has been particularly active, having bought Southern Pacific Mortgages in 2002 and, more recently, London Mortgage Company in May this year. The US investment bank also owns Preferred Mortgages, and has established a shelf programme for European mortgages called Eurosail.

 

"We have a strong mortgage business globally," says Alex Maddox, managing director of structured finance trading at Lehman Brothers in London. "It's a fundamental part of our fixed-income business. We looked to replicate our US business in Europe and have been active in the UK."

 

Until recently, Lehman had been structuring stand-alone securitisation deals for its various lenders. Then, in May, it launched its first residential MBS deal from its Eurosail platform, a £735 million transaction called Eurosail 2006-1. This deal comprised non-conforming and near-prime mortgage assets originated by Southern Pacific Mortgages.

 

Eurosail deals will include assets from Lehman's other mortgage lenders, as well as loans the firm buys from the market. "We have good relationships with most UK mortgage providers," says Maddox. "We have been in whole loan trading for two and a half years now." Lehman also has a relationship with the Alliance & Leicester building society, providing it with non-conforming mortgage products for its clients. These could potentially be included in future Eurosail transactions.

 

However, not all investment banks are looking to buy non-conforming lenders - especially as most of them have been snapped up, and those remaining are seen as too expensive. Instead, these banks are buying assets in the whole loan market then securitising them in the capital markets to generate revenues.

 

In June, Credit Suisse launched its first securitisation through its Oakwood Homeloans business. It securitised a portfolio of mortgages it purchased from Kensington and GMAC-RFC in a £556 million deal called Alba 2006-1. ABN Amro is also entering the mortgage business, and establishing a conduit for consumer assets. "We've seen the competition in that area getting tougher and the fees going down," says Udo Van der Linden, executive director of consumer securitisation at ABN Amro in London. "Two and a half years ago, we launched a commercial MBS conduit, and that business has grown significantly. The new business we've started is the same principle for consumer assets with a focus on mortgages."

 

Whether all the new players will survive is another question. Interest in the UK mortgage market does not appear to be waning. However, the market is set to get even more crowded, with at least 10 new lenders looking at getting into what is, some say, an already over-supplied market.

 

If you want to comment on this article, please email the Editorial Director, Nick Sawyer on [email protected]

A whole new game

Whole loan sales have become an important part of the UK mortgage market, driven partly by increased investor demand for residential mortgage-backed securities and the entry of investment banks into the sector. Rachel Wolcott reports

 

 

 

Well as I say this is because most of the sale s in these securitisations are WHOLE LOAN SALES read between the line.

Edited April 6, 2009 by IS IT ME?
did a double take lol

[Suetonius]

mdge61,

well done you have at least got the point there can be no repo done without the bonders trustee joining any court claim and that's the point I am making here and that why the papers will never be shown to you , a judge or no one or until we have an employee will to give them over.

:confused::confused::confused::confused::confused::confused:

 

 

No offence Is It Me?

 

I can't understand how you reached the conclusion based on:

 

and this:

 

Allen & Overy | Areas of Expertise | Assigning a claim in the UK - key points to remember

 

What provisions should be included in an assignment agreement?

In terms of formalities, remember that for assignments to meet the statutory criteria of s136 Law of Property Act 1925, they need to be in writing, signed by the assignor and 1) notice of the assignment has to be given to the debtor, trustee or which ever other person the assignor would have been entitled to claim against. 2) If they do not meet those criteria, the assignment can still be effective but only as an equitable assignment. 3) The key drawback here (in the context of assigning litigation) is that the assignee could not pursue the litigation in its own name; the assignor would have to be joined as a party to the proceedings

 

It is clear that you have totally minsuderstood the law in relation to assignment and especially s.136 of the Law of Property Act 1925.

 

I will use the above to prove my point:

 

1) notice of the assignment has to be given to the debtor.

 

If you read my previous posts, you might find that I have mentioned this a few times.

 

2) they do not meet those criteria, the assignment can still be effective but only as an equitable assignment.

 

Please note, as I have also previously posted "equitable assignment"

 

3) The key drawback here (in the context of assigning litigation) is that the assignee could not pursue the litigation in its own name; the assignor would have to be joined as a party to the proceedings.

 

The assignee (the SPV) could not purse the litigation in its own name; the assignor (the mortgage lender would have to be joined as a party to the proceedings.

 

However, the assignor (the mortgage lender) can pursue litigation in its own name...

 

Now this is the real kicker... Do you bother to read the information you post, before you post it ???

 

I only ask because:

 

"Obviously, you retain some credit risk in a securitisation, but you also retain legal, origination, compliance and regulatory risk,".

 

As you have posted:

 

IN A SECURITISATION, BUT YOU ALSO RETAIN LEGAL TITLE

 

Key word: Retain

 

The Oxford dictionary states:

 

retain

 

 

• verb 1 continue to have; keep possession of. 2 absorb and continue to hold (a substance). 3 keep in place; hold fixed. 4 keep engaged in one’s service. 5 secure the services of (a barrister) with a preliminary payment.

 

 

You might also be interested to know that the word retain, comes from the latin word retinere, which means "HOLD BACK";)

 

Whole sale loans, is different from securitisation. If you do a little more research you will discover that mortgages that are sold as a whole sale loan, are usually later securitised. However, I have noted previously that you do not appear to be willing to do your own research, so again I will do it for you8-)

 

In June, Credit Suisse launched its first securitisation through its Oakwood Homeloans business. It securitised a portfolio of mortgages it purchased from Kensington and GMAC-RFC in a £556 million deal called Alba 2006-1.

 

Let's look at the presale report for Alba 2006-1 (a copy attached to post and Is It ME? this was found via yahoo took all of about 5 seconds )

 

"Preliminary credit ratings have been assigned to the £558.7 million mortgage-backed floating-rate notes to be issued by ALBA 2006 - 1 PLC. The notes are backed by a pool of first-ranking mortgages secured over freehold and leasehold properties located in England, Wales, Scotland, and Northern Ireland. The mortgages were originated in two pools by two originators: GMAC-RFC Ltd. and Kensington Mortgage Co. Ltd. (Kensington). The mortgage pools were bought by Oakwood Homeloans Ltd. (OHL) for use in this transaction. OHL then sold them to the issuer on an equitable basis.

 

OHL's principal business is targeting and purchasing pools of residential mortgage loans in the U.K.'s secondary mortgage-loan market and funding them through securitization."

Well as I say this is because most of the sale s in these securitisations are WHOLE LOAN SALES read between the line.

 

You shouldn't read between the lines until you do some research

Edited April 6, 2009 by Suetonius

[Suetonius]

Is it Me?

 

Show me one piece of evidence that shows that in relation to securitisation in the UK, absolute assignment has taken place.

 

If you can do this one thing, I will freely admit that I am wrong and you are right

[Suetonius]

You have checked the records for Gmac-RFC from 2000 to now as well?

 

 

Yes, if you read my previous posts.

 

 

Ok I will.

 

http://www.mortgagesolutions-online.com/public/showPage.html?page=214589

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.

[IS IT ME?]

Sue being rude does not help in any way but stil,

 

thank you for the post but again it is nothing like the documents we have.

under yours it clear;y states Borrowers have been notified? I know of no one being notified.

2. Concerns- BBHR rate over LIBOR , well most if not all UK mortgages are LIBOR rate.

security in these loans is shown to go to the trustee

Homeloan Management as portifllio services ' management of arrears and repossession cases?

OHL is the previous owner of the securitized portfolio, yes.

Can you just answer why you feel so strongly that there is nothing any one can do with this?:confused:

[Suetonius]

Sue being rude does not help in any way but stil,

 

thank you for the post but again it is nothing like the documents we have.

under yours it clear;y states Borrowers have been notified? I know of no one being notified.

2. Concerns- BBHR rate over LIBOR , well most if not all UK mortgages are LIBOR rate.

security in these loans is shown to go to the trustee

Homeloan Management as portifllio services ' management of arrears and repossession cases?

OHL is the previous owner of the securitized portfolio, yes.

Can you just answer why you feel so strongly that there is nothing any one can do with this?:confused:

 

My documents do not state that borrowers have been notified...

 

That is my whole point..

 

In relation to your second point. You will note I have not posted anything thing about interest rates.

 

The reason I feel so strongly is not that I fee that nothing there is nothing that any one can do with this.

 

I feel so strongly because I am seriously concerned that people will jump on securitisation and think that this is away to stop their homes from being repossessed, instead of looking at other ways such as government help scheme etc.

 

The problem with forums is that a number of people will read a post and accept it as fact. Therefore, I thought it would it best to actually discuss the merits of securitisation in an attempt to actually identify what happens, what legisiation applies and the parties involved.

 

Isn't it better to actually find out about something than just assume something ?

Edited April 6, 2009 by Suetonius

[Suetonius]

OHL is the previous owner of the securitized portfolio, yes.

 

I don't know if they were previously securitised.

 

However, OHL brought them from the mortgage lender and not from a SPV. It would appear that it purchased the legal title and replaced the mortgage provider as the lender (unlike SPV's in the sense of securitisation)

 

It then sold the legal title in equity to a SPV

[Suetonius]

For any argument to work in relation to securitisation the following questions need to be answered. I have previously asked Superslueth to answer but unfortunately this was just before she flew away on 3rd April

 

 

 

Now that I have answered your questions Superslueth, would you care to return the courtesy ? (only seems fair)

 

Question One

Question One

Here is a question, under what legal process was this sale made ?

 

If it was assignment, s.136 confirms that it cannot be legal/absolute

If it was novation, where is the new contract ?

 

Question Two

We know that is securitisation in the USA, but do we know that is also securitisation in the UK ?

 

A previously quoted extract from the Capital One tribunial:

 

"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. No such requirement is imposed by UK accounting standards, nor by the FSA"

 

As I understand it, in the US, it is a requirement that the assignment is by way of a true sale (legal/absolute assigment). However, no such requirement exists in the UK.

 

Question Three

Smoke and mirrors are everywhere and can be used by everyone including us.

 

However, through the smoke and mirrors, two points still remain

 

1) The implications of the judgements made in the 2005 Pender Case

2) The requirement for a notice to be sent to the debtor / borrower (as per s.136 of the LOP)

 

How do you intend to overcome these two obstacles ??

 

look forward to your answers to the above questions

[Suetonius]

One last thing they are not my documents.

 

I know, I sound like a broken record but

 

To find them all you have to do is go to either google or yahoo.

 

type in "mortgage prospectus important notice" (just filter the results to UK only)

 

Google Search Results

 

Yahoo Search Results

 

If you know the name of the one you are looking for, just enter it and it will further filter the results.

[IS IT ME?]

you may mean well and I like you do not want people to do some thing which will put there homes in jeopardy but do you think the lenders are that honest and go by all the rules lol they use the courts and the rules to there advantage and if they need not inform the courts borrowers and the L/R of any facts then they will not.

I know it and so do you and there until some one finds some thing we will only have to keep looking BUT it will come out.

Looking at it you will feel the same about the high ERC that people have had to pay when the lenders repossess there homes which is no fault of theirs. so we agree to disagree.:wink:

[midge61]

Hi

 

What I posted was in relation to jonchris's post about Champerty and you should follow the link and read the whole thing it is very interesting.

 

The article posted by is it me does seem to imply that the originators make a whole loan sale and then the buyers go on to securitise the mortgage pool and it does seem to read to me at least, that this is different to them just setting up a trust and securitising without our consent

 

"Whole loan sales also give lenders another way to manage risk. "Obviously, you retain some credit risk in a securitisation, but you also retain legal, origination, compliance and regulatory risk," says Beresford. "With whole loans, you don't. You sell all the risk. We have a good blend and a good method for managing the risk we retain on the balance sheet connected with the company."

 

Perhaps this needs some more investigating.

[Suetonius]

the high ERC that people have had to pay when the lenders repossess there homes which is no fault of theirs. so we agree to disagree.:wink:

 

Have you made a complaint to the FOS about this ?

[bustthematrix]

Hi All can someone please clarify, if a lender makes a whole loan sale, then that lender DOES need to notify the borrower under s.136 of the LP Act 1925?

 

Since a whole loan sale does not involve splitting of interest as does a 'securitisation' the borrower should be notified and the Land Reg updated? If both of these do not happen, does this potentially constitute a criminal act???

 

For example, in the OHL deals mentioned above, for full legal rights to have been acquired (and therefore the right to securitise that loan portfolio) OHL should have notified the borrowers and the LR before securitising. Did they??????

 

I know of no mortgages held by OHL directly, they tend to use subsidiaries, of which I think are the likes of Capstone and Redstone.

[bustthematrix]

For any argument to work in relation to securitisation the following questions need to be answered. I have previously asked Supersleuth to answer but unfortunately this was just before she flew away on 3rd April

This is true Suetonius. However I don't think I've seen a response to IIM's assertion regarding the Lenders so tightly guarding their precious 'sale agreement documents'! It seems quite clear that they do have A LOT TO HIDE. I think you'll find that THESE sale contracts are going to be far more closely guarded by lenders than those for DCAs chasing debts of a few £hundred or £thousands!

[bustthematrix]

Also following IIM and SS's challenges from earlier in this thread, the security for the investors on the basis of equitable interest alone seems rather woolly and vague - especially when you look at the vast sums of money involved. Considering that these instruments are often traded amongst institutions, following the trail of equity interest alone would be quite challenging don't you think?

Btw Suetonius, I'd like to know if you think any of the techniques currently being used in the US e.g the 'produce the note' strategy (http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to) - to forestall repossessions and in some cases compel lenders to renegotiate terms, has any possible linked application here in the UK.

[JonCris]

I mentioned champerty because setting aside the present arguments I wonder if the draughtsmen of the original contracts have taken it into consideration when completing them & with what if any consequences........... I look forward to your comments

Edited April 6, 2009 by JonCris

[Suetonius]

This is true Suetonius. However I don't think I've seen a response to IIM's assertion regarding the Lenders so tightly guarding their precious 'sale agreement documents'! It seems quite clear that they do have A LOT TO HIDE. I think you'll find that THESE sale contracts are going to be far more closely guarded by lenders than those for DCAs chasing debts of a few £hundred or £thousands!

 

I think you might be under estimating the importantance of the DCA's sales agreements. The individual debt may be for a few hunderd or even a few thousand pounds.

 

However, DCA's do not have one agreement per debt. They have one sales agreement per lender and that one agreement applies to all the debts it buys from that particualr lender.

 

So the actual sales agreement could apply to debts totalling hundreds of thousands or even millions of pounds.

 

The ones I have seen were all obtained during litigation. Admittedly, the value of Residential Mortgage Backed Securities (RMBS) will be alot more, I still think it will be possible for someone to get one, eventually.

Edited April 7, 2009 by Suetonius

[Suetonius]

Btw Suetonius, I'd like to know if you think any of the techniques currently being used in the US e.g the 'produce the note' strategy (http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to) - to forestall repossessions and in some cases compel lenders to renegotiate terms, has any possible linked application here in the UK.

 

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)

 

 

Furthermore, due to the reasons listed below, I do not consider that I have jumped to this conclusion, rather I have reached this conclusion based upon fact and evidence.

 

I would like to take this opportunity to explain my thought process.

 

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.

 

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

 

 

 

 

*Disclaimer

 

The above is based upon the assumption that s.136 is the applicable legal process

Edited April 7, 2009 by Suetonius

[Suetonius]

I mentioned champerty because setting aside the present arguments I wonder if the draughtsmen of the original contracts have taken it into consideration when completing them & with what if any consequences........... I look forward to your comments

 

I have been thinking seriously about this and I have been going one way and then the other..

 

Who would be classed as the uninterested party ?

[JonCris]

I have been thinking seriously about this and I have been going one way and then the other..

 

Who would be classed as the uninterested party ?

 

That's my point who? Doesn't champerty mean suing on the back of another whether or not your an interested party is irrelevant As anyone suing on the back of another can be said to have an interest

 

Also another point I would like you to consider is the fact that once 'sold' the restrictions, duties & protections that apply between the lender & the borrower greatly diminish those protections for the borrower in that the codes of practice & the treatment of defaulting borrowers changes radically, in that the managers can no longer meet their obligations as set out in the Mortgage Lenders Guide which will no doubt be referred to in their literature - In other-words they cannot offer the assistance implied by those guidelines to the extreme detriment of the borrower making them redundant. Therefore even if only an implied term doesn't that failure amount to a breach of contract by the lender which occurs at the outset & even before the borrower defaults

 

 

Again your comments will be most appreciated

[Suetonius]

That's my point who? Doesn't champerty mean suing on the back of another whether or not your an interested party is irrelevant As anyone suing on the back of another can be said to have an interest

 

The reason I am not sure about champerty is because of chitty on contracts which states:

 

Champerty is a variety of maintenance:

(i) ‘A person is guilty of maintenance if he supports litigation in which he has no legitimate concern without just cause or excuse’ Chitty 28 Ed Vol 1 17 – 050

 

(ii) Champerty ‘occurs when the person maintaining another stipulates for a share of the proceeds of the action or suit’ Chitty 28 Ed Vol 1 17 – 054.

 

Could the assignee be deemed to be maintaining the assignor?

 

Would champerty apply if the assignee is not involved with the application for repossession?

 

(I will come back on your other point.. still thinking..)

 

 

[midge61]

You are quite right jonchris. I have a letter from Capstones stating that they are unable to alter my mortgage terms in any way i.e change from repayment to interest only because they are not a mortgage company. They also said they cannot offer financial advice.

 

Now as they are the administrators this is all well and good BUT if you write to SPML the answers come from Capstone as THEY ARE SPML so there is nothing you can do unless you do end up in court and they have to do as a judge says.

 

So if you are unfortunate enough to have one of these mortgages and are not in a position to re-mortgage you can do nothing but pay their extortinate rates and pray that LIBOR doesn't rise dramactically!

[Suetonius]

You are quite right jonchris. I have a letter from Capstones stating that they are unable to alter my mortgage terms in any way i.e change from repayment to interest only because they are not a mortgage company. They also said they cannot offer financial advice.

 

Now as they are the administrators this is all well and good BUT if you write to SPML the answers come from Capstone as THEY ARE SPML so there is nothing you can do unless you do end up in court and they have to do as a judge says.

 

So if you are unfortunate enough to have one of these mortgages and are not in a position to re-mortgage you can do nothing but pay their extortinate rates and pray that LIBOR doesn't rise dramactically!

 

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.

[JonCris]

Sue my guess would be (ii)

 

Also midge my point about contract is that as soon as it is securitized much of it's borrower protections become redundant. Therefore rather than argue securitization in court it may be more beneficial if it's argued that there has been a fundamental change in the relationship ie unfair relationship

[Suetonius]

Also midge my point about contract is that as soon as it is securitized much of it's borrower protections become redundant. Therefore rather than argue securitization in court it may be more beneficial if it's argued that there has been a fundamental change in the relationship ie unfair relationship

 

 

You remind me of one of my old teachers (it is a compliment because I liked him)

 

He always used to say, if you know the answer you want someone to give, all you have to do, is ask the right the question.

 

Which is what I think you are saying, in relation to unfair relationship.