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Mortgage Securitisation Question


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Hi everyone:)

 

Apologies if this question has been answered elsewhere - I have had a brief scan of the huge 'Securitisation' thread but cannot see the answer to my question and its a lot to take in for someone who is still getting to grips with understanding securitisation.

 

We had a mortgage on which we defaulted and were issued with court papers for repossession.

 

We paid off our arrears before the date of the hearing and avoided this happening.

 

Six months later we sold our house and repaid the mortgage.

 

Recently we did a Subject Acess Request on our old mortgage company and discovered in the notes that 3 months after taking out the mortgage our account was transferred to another company, which I have discovered shares the same address and is obviously connected in some way to our original lender.

 

When our original lender issued proceedings against us it was after this transfer had taken place and yet there was no mention of the second company's name in any of the paperwork we received in relation to their claim.

 

We are now in the process of reclaiming arrears charges etc from the mortgage company.

 

I am just wondering if the mortgage company ever had any right to take us to court and if there is any way I can prove this or use it to my advantage - the mortgage company put us through a terrible time as my OH attempted suicide as a result of their actions and I would like to see justice done!

 

If anyone can offer any advice I would be most grateful, thank you.

 

Regards,

 

Landy x

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in short from the huge thread, banks only sell the right to collect interest through securitisation and via it's SPV but not the right to issue proceedings as they still hold the legal title and interest at the land registry.

 

the SPV must legally own the mortgages to be able to sell them to investors.

 

so somewhere along the line, regulators and people are being fooled.

 

no-ones yet really figured out how to take the banks on in this issue. Unless i've missed something on the forum.

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in short from the huge thread, banks only sell the right to collect interest through securitisation and via it's SPV but not the right to issue proceedings as they still hold the legal title and interest at the land registry.

 

the SPV must legally own the mortgages to be able to sell them to investors.

 

so somewhere along the line, regulators and people are being fooled.

 

no-ones yet really figured out how to take the banks on in this issue. Unless i've missed something on the forum.

 

Hi tifo:)

 

Many thanks for your response - it's most appreciated.

 

I've been gradually working my way through the huge thread and trying to get my head around the many complex issues.

 

So basically what you're saying is that although the lender has securitised, they are still legally within their rights in issuing proceedings as they have only passed some of the rights to the spv - thank you for simplifying this for me!

 

You say that the spv must legally own the mortgage to sell to an investor - I take it that this is where the search of the Land Registry comes in? Also is it possible to find out such info retrospectively, ie, we sold the property in question, so I assume its too late now to find out exactly who held the legal title at the time (18 months ago)?

 

Furthermore, with our property we had over £350,000 equity as well as two mortgages totalling another £250,000 - in a case like that I presume both our name and the two lenders names would be on the title at the Land Registry? (We only had a mortgage of £50,000 with the lender who issued proceedings)

 

Prior to these mortgages we had owned the property outright and had never had a mortgage so I have never needed to question this before.

 

Therefore I suppose its not worth bringing up the securitisation subject with our former lender during the charges reclaim process?

 

Apologies for all the silly questions, but I've never dealt with anything like this before and now I'm trying to get to grips with it all:eek:

 

Regards,

 

Landy x

Edited by landy_alert
Missed a bit!

LTSB PPI on various loans (current/settled) - Refunded inc 8%

 

MBNA 1 Charges - Refunded inc CI

 

MBNA 1 PPI - Refunded

 

MBNA 2 Charges - Refunded inc 8%

 

MBNA 2 PPI - Refunded

 

MBNA 2 Accident Ins - Refunded

 

Swift Advances (settled) Mortgage Charges -Partially refunded

 

Swift Advances (settled) Mortgage PPI - Refunded inc CI & 8%

 

Sainsburys (settled) Loan PPI - Refunded inc CI +8%

 

Sainsburys (closed) Card Charges - Refunded inc CI + 8%

 

M&S Money (closed) Card Charges - Refunded inc CI

 

M&S Money (closed) Card PPI - Refunded inc 8%

 

Direct Line (settled) Loan PPI - Refunded inc CI + 8%

 

Debenhams Card (closed) PPI - Refunded inc 8%

 

Swift Mortgage Charges -Refunded

 

Hitachi Finance (closed) Charges - Refunded

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So basically what you're saying is that although the lender has securitised, they are still legally within their rights in issuing proceedings as they have only passed some of the rights to the spv - thank you for simplifying this for me!

 

You say that the spv must legally own the mortgage to sell to an investor - I take it that this is where the search of the Land Registry comes in? Also is it possible to find out such info retrospectively, ie, we sold the property in question, so I assume its too late now to find out exactly who held the legal title at the time (18 months ago)?

 

Hi Landy,

 

The bank sells the benefit and right to collect the interest and principle sum on the mortgage, which is what investors pay for through the SPV. It still keeps the legal title and some obligations so it can issue proceedings and have its name on the registry. It then acts as an administrator for the SPV and the Trust, on behalf of the investors, to collect mortgage payments and pass them on, minus its own fee.

 

You need to know who the SPV is and this can be gleaned from bank records. You then need to see the prospectus which included your mortgage. You then need to check Companies House for records relating to the SPV and its interest in land.

 

You can send a SAR to the bank and it is obliged to send you everything it holds on you. This should give details of the mortgage transfer.

 

I myself haven't figured out a lot of the additional work that needs to be done but do understand the concept to some extent.

 

Good luck!

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Hi tifo

It is complex enough on a first mortgage but most people are concerned with their second charge mortgage's ( sub prime lenders) that is where the issue complexity becomes enonourmous. the clause in question on most of these agreement is "We have the right to transfer all our rights and obligations under the agreement to third parties" and in the firm in question's operations, they have done this many times, even before the first payment has been made by the borrower in order to borrow/obtain more funding.,

I am struggling to get to grips with all this, as it is very important to a lot of people.

 

I know for a fact that they also do not notify the First mortgage security holder either who hold first priority

 

sparkie

Edited by Sparkie1723
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Hi Sparkie,

 

That term "we may transfer ....." normally refers to them passing on the debt by assignment to an agency for collection. I'm not sure it applies to securitisation which is a whole different ball game?

 

It's easier in the US, as there the mortgages are transferred with legal title and right to collect, no splitting of responsibilities like here. That's why homeowners have had success in hearings when the sueing bank's been asked to "show the note that they own the mortgage".

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Hi Sparkie,

 

That term "we may transfer ....." normally refers to them passing on the debt by assignment to an agency for collection. I'm not sure it applies to securitisation which is a whole different ball game?

 

It's easier in the US, as there the mortgages are transferred with legal title and right to collect, no splitting of responsibilities like here. That's why homeowners have had success in hearings when the sueing bank's been asked to "show the note that they own the mortgage".

 

Hi tifo

What its all about the subprime lender in my case had not in the true sense of the word securitised but had obtained funding by means of a fixed and floating charge debenture on all the secured accounts, they then transferred our account to another Ltd Loan company within the group, this other company then obtained further funding by way of these transfers..and I suspect some more than dubious practiceswithin this whole group we are talkinh of 100's of millions of pounds.

I know it sounds complex and it certainly is........ because to obtain this further funding of some more £200.000.000 .......they MUST have transferred the legal security as well of the previous £400.000.000......no bank will lend £600.000.000 without any security. and that is is original borrowers house's by way of the security of them ( Bulk legal charge transfer....of course I am still "Digging":D

 

sparkie

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this is what i say, how can an SPV sell something it does not legally own (the mortgage) but only has the right to collect money from it. I assume this right can be passed along, but somehow it seems unbelievable that investors pay so much money for something the SPV does not legally own (the mortgage).

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I think that, probably, the SPV doesn't sell the mortgage per se. Instead it sells the right to collect the payments made by the mortgagee, or rather the payments made by a large number of mortgagees.

 

It can only sell the right to payments made by the mortgagees, because that's all it has.

Edited by tifo
wrong info
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But i bet the prospectuses say they legally own the mortgage ....

 

 

Please let me take that bet Tifo.....:D

 

Each of the prospectuses posted on CAG todate very clearly state the original lender retains the legal title.

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