Mortgage Securitisation - Preferred

[Crapstone]

From the same case:

 

15. The reason that the debtor's consent is not required to an assignment of a debt is that the assignment cannot prejudice him.

 

But it does.

 

It's very clear that rules regarding repossession are ignored in favour of a speedy conclusion for the nameless party assigned. They are inventing arrears and over-charging knowing there isn't a cat in hells chance the debtor can keep up with any agreement or court order. The debtor is met with lies and false statements however hard they try to communicate with the original lender or administrator.

 

The onus is then on the debtor to fight back, who by now is probably a nervous wreck and skint, or the courts will just look at the black and white in favour of the creditor.

 

We can fight back and we do but it does take it's toll.

[Sparkie1723]

Here is what Lord Denning said when he was Master of The Rolls about fraud. If you had no idea of the transfer or assignment then this fits the Bill.

 

 

sparkie

 

In order to show that he 'concealed' the right of action 'by fraud', it is not necessary to show that he took active steps to conceal his wrongdoing or breach of contract. It is sufficient that he knowingly committed it and did not tell the owner anything about it.

He did the wrong or committed the breach secretly. By saying nothing he keeps it secret. He conceals the right of action. He conceals it by 'fraud' as those words have been interpreted in the cases. To this word 'knowingly' there must be added recklessly': see Beaman v ARTS Ltd [1949] 1 KB 550, 565-566.

 

Like the man who turns a blind eye. He is aware that what he is doing may well be a wrong, or a breach of contract, but he takes the risk of it being so. He refrains from further inquiry least it should prove to be correct: and says nothing about it. The court will not allow him to get away with conduct of that kind.

It may be that he has no dishonest motive: but that does not matter. He has kept the plaintiff out of the knowledge of his right of action: and that is enough: see Kitchen v Royal Air Force Association [1958] 1 WLR 563.

[Suetonius]

Sorry Sparkie, I was up late last night and I think I am having a thick day today.

 

What is the point you are making with regard to securitisation and the Fraud Act 2006.

[Sparkie1723]

Sorry Sparkie, I was up late last night and I think I am having a thick day today.

 

What is the point you are making with regard to securitisation and the Fraud Act 2006.

.

 

HI suetonious,

 

What I'm getting at is that by securitisation/asignment if the borrower has not be officially informed of the scuritisation/assigment/transfer....irrespective of whether or not there is any detriment/loss to the borrower, the mere action of the unknown transfer is construed as fraud by failure to disclose information.

he original creditor is no longer the owner of the debt..........maybe they could be considered as administrators of it.... but this also would have to have been made perfectly clear to the borrower so that he is "in the picture" of what has happened to his original agreement, and be assured that nothing has changed ........when in fact and truth it had. The whole budle no longer belonged to the original creditor.

 

 

Hope you understand my ramblings:grin:

sparkie

 

 

 

In order to show that he 'concealed' the right of action 'by fraud', it is not necessary to show that he took active steps to conceal his wrongdoing or breach of contract. It is sufficient that he knowingly committed it and did not tell the owner anything about it.

He did the wrong or committed the breach secretly. By saying nothing he keeps it secret. He conceals the right of action. He conceals it by 'fraud'

 

 

In this instance substitute owner with "Borrower"

[enoughisenough]

Hi All

 

Unfortunately as some of you may have noted already a bereavement has kept me away from the threads. I'll be back up and posting soon though.

 

This, by the way, is very interesting. Keep up the good work. Has anyone noted them behaving themselves recently? I think the prying eyes of the FSA are having a close look at our friends. Pity it's not yet SFO. Not yet anyway. For anyone who hasn't yet do so check out the Fraud Act 2006 thread.

 

Keep the faith. EiE.

[Suetonius]

A better path to go down, as me and sue have said before, is the fact that when these mortgages are sold off with the expectation that they all will be paid off within 4-5 years and that in reality there was never any intention to lend you the money for 25 years.

 

I think you mean Superslueth and not Sue.

 

As I don't agree with this argument. Most mortgage rate products (tracker, fixed, discount etc) are for 1,2,3 and 5 years. Therefore, as per the securitisation prospectus, the same mortgage will be repurchased and then resecuritised every 1,2,3 or 5 years.

 

It is not that there is an expectation that the mortgages will be paid off by the borrower in 4-5 years, I feel that there is more of an expectation that the mortgages will be repurchased by the lender within 5 years.

 

After all,

 

1) How many people have had a mortgage with the same lender for more than 5 years ? (some people remain with the same lender for the entire term)

2) How many people, know someone that has had a mortgage with the same lender for more than 5 years? (can anyone honestly say they don't know anyone ?)

3) Why do lenders (more High St than Sub Prime) have what they call Customer Retention Department, specifically created to retain mortgage customers.

4) Subprime lenders are not offering rate switches etc, as the did before as the majority of them are in the process of reducing/closing their loan books. They want you to move to another lender, not because of securitisation, but because if you repay your mortgage, they will receive more money (early repayment charges etc) than they would if they sold their loan books.

5) Some Lenders (GMAC etc) are so desperate to reduce the size / close their loan books that they are offering discounts to people that move to a different lender

 

 

Source

 

3 Mortgage Introducer 24 March 2007

4 Mirror.co.uk 3 April 2009

5 Telegraph 22 June 2009

[Suetonius]

.

 

HI suetonious,

 

What I'm getting at is that by securitisation/asignment if the borrower has not be officially informed of the scuritisation/assigment/transfer....irrespective of whether or not there is any detriment/loss to the borrower, the mere action of the unknown transfer is construed as fraud by failure to disclose information.

he original creditor is no longer the owner of the debt..........maybe they could be considered as administrators of it.... but this also would have to have been made perfectly clear to the borrower so that he is "in the picture" of what has happened to his original agreement, and be assured that nothing has changed ........when in fact and truth it had. The whole budle no longer belonged to the original creditor.

 

 

But the lender is still the owner of the legal title (at least in my view). You would first have to establish, which as far as I am aware has not been proved thus far that the legal title does not remain with the lender

[Suetonius]

But it does.

 

That is the point Crapstone.

[Liz Southern]

I sincerely think that won't happen.

 

 

Oops, there goes another rubber tree plant!

Liz

Edited July 11, 2009 by Liz Southern
wording

[Liz Southern]

But the lender is still the owner of the legal title (at least in my view). You would first have to establish, which as far as I am aware has not been proved thus far that the legal title does not remain with the lender

 

Forgive me, I have yet to read back through the thread.

 

So, I ask the judge to put the mortgagee to strict proof that it owns the mortgage. The action then cannot proceed without proving ownership, and it cannot proceed in the County Court, as the amount in dispute is the entire mortgage - so I apply for a transfer and a prelim in the High Court.

 

Then I get myself a pro bono barrister wanting to make a name for himself, or a silk wanting to be bigger - because then I make it very public.

 

Just thinking out loud here, peeps. A few like-minded people - class action - umm.

Regards

Liz

[Suetonius]

Forgive me, I have yet to read back through the thread.

 

So, I ask the judge to put the mortgagee to strict proof that it owns the mortgage. The action then cannot proceed without proving ownership, and it cannot proceed in the County Court, as the amount in dispute is the entire mortgage - so I apply for a transfer and a prelim in the High Court.

 

Then I get myself a pro bono barrister wanting to make a name for himself, or a silk wanting to be bigger - because then I make it very public.

 

Just thinking out loud here, peeps. A few like-minded people - class action - umm.

Regards

Liz

 

What proof would you require that the lender still owns your mortgage?

 

Another way to look at the situation, is to ask is there any there any evidence that it does not own the legal title ?

[Liz Southern]

What proof would you require that the lender still owns your mortgage?

 

Another way to look at the situation, is to ask is there any there any evidence that it does not own the legal title ?

 

When you put your opponent to "strict proof" the onus is on them to prove something - in this case that they do own the mortgage. I don't speak first to specify to the judge what proof I consider acceptable. The opponent must first prove ownership (strict proof) to the satisfaction of the court, during which I can challenge the "proof". The matter will then hopefully be tied to ownership, not repossession, and should end up in a higher court.

 

Asking "is there any evidence that it does not own legal title" puts the onus on me, and the idea is to put them in the hot seat and make them prove they have the right to be taking the action they are taking.

 

"Strict proof" works in the same way as asking a company to provide a CCA agreement. "Prove it if you want to proceed", basically. (Otherwise get the hell out of my court and stop wasting my time.)

 

Regards

Liz

[Suetonius]

When you put your opponent to "strict proof" the onus is on them to prove something - in this case that they do own the mortgage. I don't speak first to specify to the judge what proof I consider acceptable. The opponent must first prove ownership (strict proof) to the satisfaction of the court, during which I can challenge the "proof". The matter will then hopefully be tied to ownership, not repossession, and should end up in a higher court.

 

Asking "is there any evidence that it does not own legal title" puts the onus on me, and the idea is to put them in the hot seat and make them prove they have the right to be taking the action they are taking.

 

"Strict proof" works in the same way as asking a company to provide a CCA agreement. "Prove it if you want to proceed", basically. (Otherwise get the hell out of my court and stop wasting my time.)

 

Regards

Liz

 

Here is some food for thought Liz, taken from a case heard in the Court of Appeal

Paragon V Pender

(I would respectfully ask people to refrain from saying these judgements are flawed, unless they are prepared to say why)

 

"It is common ground that Paragon, as registered proprietor of the Legal Charge, retains legal ownership of it. One incident of its legal ownership – and an essential one at that – is the right to possession of the mortgaged property"

[Suetonius]

Another way to look at the situation, is to ask is there any there any evidence that it does not own the legal title ?

 

My reason to ask the above is that I have still not seen anything posted thus far on these forums that proves that the legal title passes to a 3rd party as a result of securitisation. I thought you might be in possession of evidence to the contrary

[kegi]

I think you mean Superslueth and not Sue.

 

As I don't agree with this argument. Most mortgage rate products (tracker, fixed, discount etc) are for 1,2,3 and 5 years. Therefore, as per the securitisation prospectus, the same mortgage will be repurchased and then resecuritised every 1,2,3 or 5 years.

 

It is not that there is an expectation that the mortgages will be paid off by the borrower in 4-5 years, I feel that there is more of an expectation that the mortgages will be repurchased by the lender within 5 years.

 

After all,

 

1) How many people have had a mortgage with the same lender for more than 5 years ? (some people remain with the same lender for the entire term) I will put ten hands up for that one

2) How many people, know someone that has had a mortgage with the same lender for more than 5 years? (can anyone honestly say they don't know anyone ?) more than ten hands up for that

3) Why do lenders (more High St than Sub Prime) have what they call Customer Retention Department, specifically created to retain mortgage customers.

4) Subprime lenders are not offering rate switches etc, as the did before as the majority of them are in the process of reducing/closing their loan books. They want you to move to another lender, not because of securitisation, but because if you repay your mortgage, they will receive more money (early repayment charges etc) than they would if they sold their loan books.

5) Some Lenders (GMAC etc) are so desperate to reduce the size / close their loan books that they are offering discounts to people that move to a different lender

 

my reply in blue for what its worth sue

 

kegi

[Crapstone]

Suetonius

 

3) Why do lenders (more High St than Sub Prime) have what they call Customer Retention Department, specifically created to retain mortgage customers.

4) Subprime lenders are not offering rate switches etc, as the did before as the majority of them are in the process of reducing/closing their loan books. They want you to move to another lender, not because of securitisation, but because if you repay your mortgage, they will receive more money (early repayment charges etc) than they would if they sold their loan books.

 

The sub-prime lenders did/do everything they could/can to stop anyone getting a remortgage. I don't believe for one second that they want you to move to another lender because of the repayment charges v loan book. In ordinary economic conditions it takes a few years to get back to the High St, post sub-prime, with a perfect record. These lenders have made it impossible to escape entrapment. They know that by inventing arrears and charges you have no option other than to sell or be repossessed. Remortgaging just isn't going to happen, they make sure of that however you try to address the situation.

 

It's far more lucrative to repossess and take all the remaining equity through far fetched charges (£115 per month before they start) than it is to take a piffling 1% in early repayment charges.

[Crapstone]

My reason to ask the above is that I have still not seen anything posted thus far on these forums that proves that the legal title passes to a 3rd party as a result of securitisation. I thought you might be in possession of evidence to the contrary

 

I agree there isn't an arguement for the 3rd party legal title as yet but the detriment to the consumer is clear. Capstones income is charge based and any buildings insurance must be noted in the interest of the 3rd party, not the mortgage lender. That in itself should be enough to say the material of the property and land belongs to the 3rd party and not the original lender.

[Suetonius]

4) Subprime lenders are not offering rate switches etc, as the did before as the majority of them are in the process of reducing/closing their loan books. They want you to move to another lender, not because of securitisation, but because if you repay your mortgage, they will receive more money (early repayment charges etc) than they would if they sold their loan books.

 

5) Some Lenders (GMAC etc) are so desperate to reduce the size / close their loan books that they are offering discounts to people that move to a different lender

 

The sub-prime lenders did/do everything they could/can to stop anyone getting a remortgage. I don't believe for one second that they want you to move to another lender because of the repayment charges v loan book. In ordinary economic conditions it takes a few years to get back to the High St, post sub-prime, with a perfect record. These lenders have made it impossible to escape entrapment. They know that by inventing arrears and charges you have no option other than to sell or be repossessed. Remortgaging just isn't going to happen, they make sure of that however you try to address the situation.

 

It is a documented fact that several Lenders, do want to reduce the size of / close their loan books and not sell to another lender.

 

"Hundreds of lucky home owners are being told that part of their home loan will be paid off if they remortgage elsewhere. Hard-pressed lenders, desperate to reduce the size of their loan book, are offering to pay off up to 20pc of some customers' outstanding mortgages. In some cases this can reduce the mortgage debt by up to £25,000."

"But by writing off a proportion of the debt, lenders hope that customers will be able to take advantage of cheaper mortgage deals offered by rivals, enabling the entire mortgage debt to be taken off their books."

 

"These lenders all specialised in providing mortgage deals to the subprime, near-prime, self-employed and buy-to-let markets – in other words, riskier borrowers who might not have been offered decent rates from a high street bank or building society."

 

Telegraph 22 June 2009

 

"Struggling mortgage firms are so desperate to offload borrowers that they are offering to write off a sizeable chunk of customers' home loans if they move to a rival bank. In some cases, tens of thousands of pounds are being paid off to give customers a better chance of finding an alternative lender willing to take them on. The offer is being made by some of Britain's biggest mortgage firms who are willing to take a hit of as much as £25,000 to get the loans off their balance sheets to see them through the credit crunch."

 

 

Mail Online 23 June 2009

 

 

 

It's far more lucrative to repossess and take all the remaining equity through far fetched charges (£115 per month before they start) than it is to take a piffling 1% in early repayment charges.

 

Is it really far more lucrative ?

 

Lets look at Northern Rock as a prime example. It offered mortgages with a loan to value of 125%. These mortgages were often taken as "interest only", to make the monthly payments affordable. If a mortgage is interest only, the capital balance does not decrease. Therefore, the borrower is in negative equity from day one.

 

Now, if we look at value of property. This has dropped in recent years. Therefore, the negative equity for these specific borrowers has further increased. (this situation is not limited to Northern Rock customers)

 

Between the reduction in the market value of properties and the fact that lenders sell properties at auctions, in some instances at a loss (search CAG for numerous threads of people that have been left with a shortfall following repossession and the sale of their home).. It does not sound all that lucrative to repossess.

Edited July 12, 2009 by Suetonius
Added More

[Crapstone]

What a kind offer made to those that they think stand a chance of moving to the High St. 'Hope' seems to be the operative word and with deluded speculation. Just who is going to take them on?

 

Your idea of sub-prime and mine are very different. Northern Rock, interest only and negative equity are a different kettle of fish as well as 125% mortgages. Negative equity has no effect unless you plan to move or get repossessed. And you forget that the mortgage debt can be chased for 12 years post repossession so it's unlikely the consumer will be able to move on. Nationwide have launched 125% mortgages to existing borrowers that want or need to move but again that's not in the remit of this thread.

 

As my example I will use SMPL/ Capstone and the problems encountered by numerous caggers.

 

In my case a £60k mortgage which hasn't moved in 6 years and despite winning with the FOS they still apply charges. They have lost all the original files and there is only the deed and a mortgage offer that they rely on (which is not the correct one). I have paid back over 30k. They would not let us capitalise the arrears and have done everything they can to mislead, lie and take full advantage of the situation. Mine is one of many with the true evil of sub-prime lenders.

 

Look at it the other way. You may remortgage with considerable equity and they can see that. There are many caggers' that have relatively small mortgages but the entire equity has been taken by under-selling and charges.

 

It doesn't take a genius to work out that for every person with negative equity (minority) compared to those still with equity (majority) make the repossessions worthwhile. These are not usually first time mortgages and so the consumer will have equity as the LTV with these companies comes in at the lower end which is usually not more than 65% but the property will be under valued in the first instance.

 

House prices have fallen but in the sub-prime sector, usually the lower end of the market, the difference is negligible.

Edited July 12, 2009 by Crapstone

[gustavius rex]

What is not discussed here is the actual situation for lenders like Preferred, SPML, BM, Platform and so on. They are all in a terrible condition with mortgage books that they cannot sell off. Recent valuation of Preferred/SPML is less than 50p on the £ and they have still not managed to sell it off to investors. The rate of repos and the accumulated arrears does make them virtually bankrupt. Of course they want to reduce their exposure, particularily those loans with serious arrears and quickly too if they are going to get rid of their books. Preferred/SPML are virtually dead and gone and the problem for all of us is what is going to happen when they finally go bust. If that happens and investors can pick up the existing mortgage books at say 15 to 20 p on the £ then we shall all see an ever increasing amount of repo's as even 90% mortgages with negative equity of say 20% will be profitable at an auction.

 

Finally, when we speak about sub-prime we should recognize that the market for those type of mortgages is much larger than anyone thinks. With average London house prices in 2007 of £320,000.00 and average income of £32,000.00 how many mortgages were approved with self cert?

l do not think we've seen anything near the final collapse yet. lt will come when the interest rates start to increase and when a saturated rental market finally goes belly up. Speculators with readily available cash will make a killing and the rest of us will be on the streets. Anyone with the slightest problem with mortgage payments or other negative credit record will find it impossible to re-mortgage until we have another round of sub-prime lending at extortionate interest rates. The cycle will repeat itself out of sheer necessity as properties must be sold and prices increase to guarantee profit. The government will not change anything as they are in desperate need of tax income and their biggest source is the financial ''industry''. The fact is that to date nothing has been done to change the system and as far as l can determine, no significant changes are forthcoming either.

GR

[Hungryforinfo]

Could someone offer thoughts on a scenario whereby if a Mortgage Lender has securitised mortgage debt without contractual authority to do so and the property is repossessed via a court order (I didn't know about the court hearing a year ago, the lender chose to ignore my change of address notice) could such action be considered as fraud and therefore grounds to overturn or annul the courts decision (I am referring to the court action to repossess the property)? I am assuming the original mortgage lender had not retained the rights to repossess and sell the property in the securitisation process although I am checking documentation to verify the facts.

[gustavius rex]

Could someone offer thoughts on a scenario whereby if a Mortgage Lender has securitised mortgage debt without contractual authority to do so and the property is repossessed via a court order (I didn't know about the court hearing a year ago, the lender chose to ignore my change of address notice) could such action be considered as fraud and therefore grounds to overturn or annul the courts decision (I am referring to the court action to repossess the property)? I am assuming the original mortgage lender had not retained the rights to repossess and sell the property in the securitisation process although I am checking documentation to verify the facts.

 

l think Suetonius has made this point very clear on more than one occasion here. As long as the lender has securitized the debt only and not sold it on (including the legal title) without informing you, there is no case. l am pretty sure that there are not many lenders who would not include the right to securitize in their mortgage agreement, this as most, if not all, will use their mortgage books as security for the loans they need to provide further morgages. Mortgages are nothing but investment vehicles with a fairly safe and regular profit. The biggest problem right now is not the lenders per se, but, the lack of capital investment, i.e. access to investors and money.

GR

[Hungryforinfo]

Thanks for the reply.I'll have another trawl through the documents. In my case the original lender sold the mortgages to another lender who look like they have securitised the debt so I'll have another trael through the original lenders Terms & conditions.

[Sparkie1723]

Thanks for the reply.I'll have another trawl through the documents. In my case the original lender sold the mortgages to another lender who look like they have securitised the debt so I'll have another trael through the original lenders Terms & conditions.

 

 

 

HI everyone

My view of securitisation.

The reason why lenders securitise these transactions is to enable them to raise further capital to re lend out.

There is no way any “secuitiser” ( A Larger Bank) will securitise a debt alone, they will insist on the transfer of the legal charge also.

 

Look at it logically:

If the Bank just securitises just the debt ( of the borrower) us (“Joe Public”) and we do not pay that debt………… the securitiser is left to pusue the debt alone and has got no lever to force payment except common contract law “you owe us the money”… we can’t take your house because we have no legal charge on it …we haven’t got it…the original lender has ………. the original lender can’t pursue you for the debt, because they have transferred it…. they do..... but that is the argument they have no legal right to pursue you on their own ......on all the Court documents the securitisers name must be included because one holds the debt...the other the security for that debt without them together the claim is flawed.....if they are not the application is defective in law.……………No way ….I don’t accept that any Large "Securitser "would just securitise the debt. They would insist on the security of the property relating to the loans as well or there would be no deal.

 

That’s only my opinion but I think it has substance.

 

sparkie

[gustavius rex]

HI everyone

My view of securitisation.

The reason why lenders securitise these transactions is to enable them to raise further capital to re lend out.

There is no way any “secuitiser” ( A Larger Bank) will securitise a debt alone, they will insist on the transfer of the legal charge also.

 

Look at it logically:

If the Bank just securitises just the debt ( of the borrower) us (“Joe Public”) and we do not pay that debt………… the securitiser is left to pusue the debt alone and has got no lever to force payment except common contract law “you owe us the money”… we can’t take your house because we have no legal charge on it …we haven’t got it…the original lender has ………. the original lender can’t pursue you for the debt, because they have transferred it…. they do..... but that is the argument they have no legal right to pursue you on their own ......on all the Court documents the securitisers name must be included because one holds the debt...the other the security for that debt without them together the claim is flawed.....if they are not the application is defective in law.……………No way ….I don’t accept that any Large "Securitser "would just securitise the debt. They would insist on the security of the property relating to the loans as well or there would be no deal.

 

That’s only my opinion but I think it has substance.

 

sparkie

 

 

l am afraid that you are wrong. Securitization was and still is big big business and does not concern individual mortgages, but, bundles of mortgages (or tranches). As has been shown here it is even difficult to find out exactly who is holding the beneficial part of your particular mortgage. The legal title is always with the original lender or there would be a case of costs such as stamp duties etc. Further, there are in most transactions guarantees re. the ''investment'' and in case the mortgage does not pay as it should it will return to the original lender, why so many banks who got themselves involved in the sub-prime market are functionally bankrupt today. This type of investments are not straight forward dealings and as has been proven by the collapse of the sub-prime market, even the most ''clever'' of investment bankers got it wrong and actually did understand very little of what trading in this type of financial instruments entailed. Ask the investment bankers at Royal Bank of Scotland, Bank of Scotland, Barclays and so on. You are now the proud owner of the majority share holding in most of these institutions.

GR

One thing is clear, though, it is perfectly legal in this country and the lender does not have to inform you as long as he ''owns'' the legal title.