Mortgage Express appoint LPA Recievers Walker Singleton to scare tenants off!

[chillinlong]

Hi Patrick,

 

Good to hear you are back, hope you are feeling better!

 

Thanks again from all of us for your help towards the posts. Trying to understand the last one now, does this process mean that we can set it up so that LPA cannot touch?

 

Thanks again!

[patrickq1]

its something worth looking at ,might be possibilities in creating an a Commonhold Association (CA) worth a look have five or six of you join forces and create the association ?

[chillinlong]

I understand this is only for flats as most mine are houses so it would be difficult to do with if I undersand correctly.

 

Thanks

[patrickq1]

ime reading through the spec now so will conclude tommorrow what it entails ,

see ya tommoz night night chilli

patrickq1

[patrickq1]

just had a thought,if you find you can afford so much towards making payments of any arrears then you are entitled to use this part 36 ,this will now start your legal negotiations and they can either comply and accept the offer or go to court and more than likely the judge will look more favourably towards your offer and most likely accept ,it will also mean that costs against you will not hapen due to their refusal...

 

In any litigation, considering offers of settlement is crucial. If you make an offer under part 36 of the Civil Procedure Rules (CPR) (Part 36) and your opponent does not accept it but then fails to obtain a more (or equally) advantageous outcome at trial, you are likely to be awarded your costs. For a claimant, this can include indemnity costs and enhanced interest on those costs. Failure to make or accept a reasonable Part 36 offer of settlement at an appropriate time can therefore have serious costs consequences.

But, can a defendant be a claimant under Part 36 so as to benefit from the enhanced costs (and interest) provisions? Also, can a Part 36 offer be withdrawn by implication? The courts have answered both questions in the affirmative in the cases of AF v BG and Whitstance v Valgrove Ltd.

A defendant is a claimant on its counterclaim

In AF v BG, the issue the court had to consider (for the first time) was whether an offer made by a defendant in respect of its counterclaim could constitute a "claimant's" Part 36 offer? The benefit for a defendant if the answer is yes would be where the defendant then goes on to obtain a judgment which is at least as advantageous as its offer. As a "claimant" could it then, unless the court deemed it unjust, be entitled to interest on the judgment sum at a rate not exceeding 10%, indemnity costs and interest on those costs, all from the date 21 days after the offer was made? Part 36 only provides for such enhanced provisions being available where a claimant has made an offer.

The defendant's offer had stated on its face that it was intended to have the consequences of a claimant's offer to settle. Part 20, which deals with counterclaims and other additional claims, provides that such a claim should be treated as if it were a claim for the purposes of the CPR. Part 36 applies equally to Part 20 claims. The Court of Appeal held that on a proper construction of Part 36 and Part 20, the defendant's offer to settle the counterclaim, having taken account of the claim, did constitute a "claimant's" Part 36 offer and could, in principle, carry with it the penal costs consequences provided by 36.14(3) as referred to above.

The counterclaim was to be treated as if it were a claim and the defendant, as the party bringing the counterclaim, was to be treated for the purposes of the offer as the claimant. In relation to its position in defending the proposed counterclaim, the claimant was treated as the defendant. The court found that "only in this way can the rule apply in an even-handed way, as it plainly should, and so as not to have any arbitrary results according to which party brought proceedings first."

The fact that the counterclaim in question had not been pleaded at the time the offer was made was not relevant, as a Part 36 offer can be made at any time, including before proceedings are commenced.

Any offer made under Part 36 must make it clear whether it is in relation to the whole of the claim and whether it takes into account any counterclaim. The offer in this case made it clear that it was put forward on a net basis and that acceptance of it would constitute full and final satisfaction both of the proposed counterclaim and of all claims asserted by the claimant. The court held that it followed that where 36.10 (1) speaks of the costs of the proceedings being recoverable where a "claimant's" offer is accepted within the relevant period, it meant, in the present case, the costs of both the counterclaim and of the claim.

Comment

This decision should prove useful where a defendant is pipped to the issuing post by a speedier opponent. Where a defendant genuinely has a substantive claim and can frame its Part 36 offer as a "claimant's" offer, this case confirms that the court can award a defendant enhanced interest and costs as envisaged in 36.14(3). This is unlikely to be the position though where the court considers the counterclaim merely tactical.

Implied withdrawal of Part 36 offer

The second case, Whitstance v Valgrove Ltd, relates to an "implied" withdrawal of a Part 36 offer.

Part 36.9(2) provides that a Part 36 offer may be accepted at any time (whether or not the offeree has subsequently made a different offer) unless the offeror serves notice of withdrawal on the offeree. By 36.3(7), notice of withdrawal has to be written.

The rules are silent on the situation where the offeror makes a second offer without formally withdrawing the first offer. The issue in this case was whether the offeree could still accept the first offer when a subsequent offer had been made but which made no specific reference to the first offer being withdrawn?

Whitstance made a pre-proceedings Part 36 offer to settle the proceedings for £3,000 (first offer) which was rejected by Valgrove. Whitstance made an increased Part 36 offer to settle for £7,900 (second offer) after the issue of proceedings. The second offer did not expressly withdraw, or make specific reference to, the first offer but simply referred to "previous correspondence". Valgrove quickly thereafter sought to accept the first offer. Whitstance refused to accept that Valgrove could do so and an application to court was made. The judge confirmed Valgrove could accept the earlier offer as it had not been withdrawn. Whitstance appealed.

Valgrove contended that the first offer had never been withdrawn as there had been no compliance with 36.3(7). Whitstance contended that withdrawal could readily be inferred because the second offer left the reader in no doubt that the offeror no longer intended to deal with the offeree on the terms of the first offer. The second offer therefore constituted the requisite written notice under 36.3(7).

On appeal, the judge held that the Part 36 regime is not directly analogous to contract law, that the overriding objective of the CPR should be borne in mind at all times and caution exercised in adopting too technical an approach. Part 36 is silent as to the position where a party makes a further offer without an earlier one being specifically withdrawn. However, the judge held that to his mind it was self-evident that if a claimant makes a revised Part 36 offer, he is intending to rely on that latter offer, not the earlier one. Common sense implied that the second offer in this case necessarily replaced the first offer and no other interpretation of the second offer was possible. It would be too confusing for the second offer to co-exist with the first. The first offer was therefore impliedly withdrawn by the second and was no longer available for acceptance.

Comment

This is clearly a common sense judgment on the facts of the case. However, the most appropriate and less risky strategy when making a second Part 36 offer (or amending an earlier one) continues to be that all or any previous offers should be formally withdrawn by giving written notice of the withdrawal to the offeree. This can be done in the second offer as Part 36 is silent as to what form the written notice has to take. There is then no room for dispute or issues of interpretation in more complex cases

[patrickq1]

Originally Posted by Suetonius

 

Ownership

 

Legal and Equitable titles are derived from ownership. Ownership is the state or fact of exclusive rights and control over property, which may be an object, land/real estate or intellectual property. Ownership involves multiple rights, collectively referred to as title, which may be separated and held by different parties.

 

Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document that serves as evidence of ownership. Conveyance of the document may be required in order to transfer ownership in the property to another person. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, both possession and title may be transferred independently of each other.

 

The equitable title refers to the actual enjoyment and use of a property, whereas a legal title implies actual ownership. An example of such is a trust. In a trust, one person may own the legal title, such as the trustees. Another may own the equitable title such as the beneficiary.

 

A trust is the separating of the legal (legal title) and the beneficial (equitable title) ownership of property. A trust consists of three parties:

 

 

• Settlor (the owner of both the legal and equitable title aka absolute owner)
  
• Trustee (Administor of the trust, which owns the legal title)
  
• Beneficiary (the owner of the equitable title)
  

In UK securtisation, the settlor and the trustee is usually the same party (i.e mortgage lender). Therefore, the trustee is granted the legal powers to enforce any rights in relation to the property.

 

The beneficiary is the SPV, which purchases the equitable title to the property. However, as beneficiary and the owner of the equitable title, it does not have any legal powers to enforce any rights in relation to the property.

 

Trusts have always been used as a method of limiting the exposure of assets to taxes and other legal claims as well as to specify the use of those assets in ways not otherwise recognised under the law.

In the scope of a trust, the trustee (mortgage lender) acts to protect the interests of the beneficary (SPV).

 

Therefore, when a mortgage lender instigates repossession proceedings (and the mortgage has been securitised), it is doing so as the trustee of the trust. Therefore, any actual financial loss directly to the mortgage lender is immaterial.

 

I think that Her Majesty's Revenue & Customs (HMRC) explains far simplier than I can:

 

What is a trust?

 

The law of trusts is based upon the concept of English law that property rights can be split into:

 

• the legal ownership,
  
• and the beneficial interest.
  

A person who is the absolute owner of property has both the legal and beneficial interest in it.

 

This means that the owner will show up as legal owner, e.g. on a land register or on a company register, and will also enjoy any benefit produced by the property.

 

The absolute owner may split the legal interest from the beneficial enjoyment. This can be done by giving the legal ownership to trustees and the beneficial interest to a named beneficiary (or beneficiaries). Alternatively the owner can retain the legal title and make himself a trustee."

 

Legislation

 

Two important pieces of legislation to consider.

 

• Law of Property Act 1925
  
• The Financial Collateral Arrangements (No. 2) Regulations 2003
  

Section 136 of the Law of Property Act 1925 states:

 

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—

 

Any absolute assignment of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, is effectual in law to pass and transfer from the date of such notice.

 

For an absolute (legal) assignment to be effectual in law a notice has to be given to the debtor.

 

Section 4(3) of the The Financial Collateral Arrangements (No.2) Regulations 2003 says:

 

(3) Section 136 of the Law of Property Act 1925 (legal assignments of things in action) shall not apply (if it would otherwise do so) in relation to a financial collateral arrangement, to the extent that the section requires an assignment to be signed by the assignor or a person authorised on its behalf, in order to be effectual in law.

 

Section 4(3) does not affect the requirement of a notice of assignment being sent to the borrower, it only states that it does not have to be signed by the assignor.

 

In summary, legislation states that for an absolute (legal) assignment to be effectual in law, a notice of assignment has to be given to the borrower.

 

Court Cases

 

The Importance of Judicial Precedence

 

The doctrine of judicial precedent involves application of the principle of "stare decisis", which means to 'stand by cases already decided'. Decisions made in the House of Lords bind all courts in the Country except the House itself. The House of Lords will usually follow its own decisions but will depart where it seems right to do so.

 

Decisions made in the Court of Appeal bind courts below it and usually bind itself, unless its own previous decisions conflict, are incompatible with a decision made in the House of Lords even if not expressly overruled, or were made "per incuriam" (by mistake). The precedent is followed less rigidly in the criminal division where a person's liberty is at stake.

 

It is the "ratio decidendi" of a case which gives the principle of law that becomes binding under the doctrine of judicial precedent. "Ratio Decidendi" is a latin phrase meaning 'the reason for the decision'. It refers to the way a court reasons and applies the law in order to come to a particular decision. The ratio of a case will only be binding on a later case where the legal principle involved is the same and the facts are sufficiently similar. Any other reasoning within the case is said to be "obiter dicta", meaning 'by the way'.

 

Comments made "obiter dicta", together with decisions of lower courts, dissenting judgements, legal journals and text books, roman law, and decisions of courts in Scotland, Ireland, the Comnwealth and the USA may all be persuasive precedent. Persuasive precedent is not binding but may be considered, particularly where there is no authority on the point of law.

 

There have been relatively few cases that have directly resulted in judgements being handed down with regard to Securitisation and the impact (if any) on the right to instigate litigation.

 

Paragon v Pender

 

Time Line of Events

 

* 5th January 1995, an order of possession was granted to Paragon Finance

* 21st January 2002, Mr & Mrs Pender applied unsuccessfully for a set aside

* 9th January 2003, oral application for appeal dismissed

* 17th February 2003, stay of execution granted

* 25th November 2003, application for permission to appeal

* 29th July 2004, limited permission to appeal granted

* 27th June 2005, Appeal heard

* 31 January 2006, a petition to appeal was submitted to the House of Lords. The House of Lords refused to give leave to appeal.

 

Notable Judgements

 

Pender 2003

 

137. I am only concerned of course with the taking of possession, because there was no monetary judgment. I do not see that either section 114 LPA 1925 nor the provisions of the LRA 1925 have impact on the enforcement of the mortgage debt. For there to be a legal assignment of that it seems to me self evident that it must be completed by notice under section 136 LPA 1925 and until so done, even by virtue of section 114, it will remain an equitable assignment only.

Pender 2005 (paragrapgh 109 onwards)

 

1) In my judgment Mr and Mrs Pender's case on this issue is misconceived. 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. I can see no basis upon which it can be contended that an uncompleted agreement to transfer the Legal Charge to the SPV (that is to say an agreement under which, pending completion, the SPV has no more than an equitable interest in the mortgage) can operate in law to divest Paragon of an essential incident of its legal ownership. In my judgment as a matter of principle the right to possession conferred by the Legal Charge remains exercisable by Paragon as the legal owner of the Legal Charge (i.e. as the registered proprietor of it), notwithstanding that Paragon may have transferred the beneficial ownership of the Legal Charge to the SPV.

 

2) 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.

 

3) 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.

 

4) 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. Nor, in my judgment, can the fact that Paragon has failed to describe itself as suing in its capacity as trustee affect the validity of the proceedings or of the orders made in the proceedings (in particular, the possession order). In any event, even if that failure could be said to amount to a formal defect in the proceedings (and I do not regard it as such) the court has ample powers under the CPR to correct such defects (e.g. under CPR Pt 17).

 

5) In my judgment Mr Page's reliance on section 114 of the Law of the Property Act 1925 is wholly misplaced, for the reason which the judge gave: viz. that section 114 is concerned with transfers of mortgages of unregistered land (transfers of mortgages of registered land being dealt with by section 33 of the Land Registration Act 1925). To interpret section 114 as applying also to transfers of mortgages of registered land would produce a fundamental and wholly illogical conflict between the two regimes in relation to transfers of mortgages. Bearing in mind what Lord Oliver of Aylmerton said in Flegg (quoted in paragraph 85 above), I can see no conceivable basis for interpreting section 114 in a way which produces that result and every reason for not doing so. Accordingly I respectfully agree with the observations of this court in Marks with reference to the instant case (see paragraph 95 above).

 

6) Nor, in my judgment, can Mr Page find any support for his submission in the Land Registration Act 2002, or in the Law Commission Report which preceded it. In my judgment it is verging on the absurd to seek to interpret a provision in a statute by reference to a provision in a different statute enacted some eighty years later.

 

In any event, I agree with the judge that the administration agreements demonstrate a clear contrary intention, sufficient to disapply section 114 if (contrary to the conclusion which I have just expressed) the section would otherwise apply.

 

GMAC RFC LIMITED - v - SINCLAIR

 

1. During the course of the argument my attention has been drawn to an interesting case, namely City Mortgage Corporation Ltd v Reilly and Reilly, which was an unreported decision of Judge Rubery in the Stroke-on-Trent county court, dated 28th November 1997. On analysis that decision does not, in my judgment, assist the applicant for this reason. There the claimant was City Mortgage Corporation Ltd, which was the original lender and mortgagee. The original mortgage was dated 15th March 1996. On I think the same day a transfer of what Judge Rubery held to be the legal and beneficial interest in the charge was transferred to another company called Greenwich International Ltd. The transfer was not dated and it was submitted on behalf of the claimant, which was City Mortgage Corporation Ltd, that it took effect only in equity and not in law. I should add that notice to the defendants of the transfer was given on the same day, 15th March 1996.

 

2. The judge rejected the claimant's submission and held that the transfer operated as a transfer of the legal interest and that notice of that transfer had been given to the defendant, so that the transferor or assignor, City Mortgage Corporation Ltd, no longer had any rights under the charge. Those rights were vested in the transferee or assignee, namely Greenwich International Ltd. Accordingly, the claim failed.

 

City Mortgage Corporation Ltd v Reilly and Reilly

 

An unreported decision, details of judgements as detailed above

Additional Information

 

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.

 

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.

 

Capital One tribunial

 

As mentioned above. (please see point one)

 

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"."

 

Halsbury (as in Halsbury's Laws of England

 

586. Securitisation of mortgages.

 

Securitisation is the sale of a package of mortgage debts to a corporate vehicle (the 'issuer') established for the purpose of issuing securities usually in bearer form such as bonds1. One or more mortgagees (the 'originator') may agree to sell debts and related security to the issuer.

 

This effects an equitable assignment of the mortgages which is not perfected by notice to the mortgagors or by registration. The issuer is entitled to call for a legal transfer of legal title to the mortgages in certain circumstances such as the persistent default or insolvency of the originator.

 

The issuer is given an irrevocable power of attorney to effect the transfer and for certain other purposes2. The originator retains the powers of the mortgagee, including the right to possession3 but agrees to act in accordance with the instructions of the issuer in relation to matters such as interest rates and enforcement.

 

The undertaking and assets of the issuer, including the mortgages, are in turn charged in favour of a security trustee for the benefit of the holders of notes or bonds issued by the issuer4. The security trustee is given custody of the charge certificates or, in the case of unregistered land, mortgages and title deeds, and is given an irrevocable power of attorney to effect a legal transfer of the mortgages.

 

 

1 See companies; financial services and institutions.

2 See the Powers of Attorney Act 1971 s 4; and agency vol 1 (2008 para 175.

3 See Paragon Finance plc v Pender [2005] EWCA Civ 760, [2005] All ER (D) 307 (Jun).

4 The charge takes effect as an equitable sub-charge.

 

This view would appear to be supported by HM Revenue & Customs (well at least in relation to credit card debt securitisation)Guidance for specific trade sectors: Finance: Securitisation arrangements

 

"The credit card company transfers the beneficial interest (not the legal interest) in the receivables on a block of accounts to the trust."

 

AND

 

"The credit card customer is not informed of these arrangements and the contract between the company and the cardholder is unchanged (i.e. there is no novation of the contract). This means that the exempt supply is still between the credit card company and the cardholder.

 

This was confirmed by the Tribunal in Capital One Bank (Europe) Plc (COBE) [VTD19238] and the High Court in MBNA Europe Bank Ltd."

 

I have also found this from the House of Commons

 

House of Commons - Explanatory Note

 

11. If, as expected, the loans eventually sold are securitised, legal structures will be created to hold the legal and equitable interests in the loans in the names of different parties. Lords amendment 6 would make clear that the provisions of clause 3 relating to onward sale of the loans do not apply to the creation or transfers of equitable rights that occur in a securitisation. Rather, it clarifies that clause 3 relates only to the onward transfer of legal title to the loans. The amendment ensures that the transfers of equitable interests that occur as a normal part of a securitisation are separate from the onward transfer of legal title, and which do not require the same protections.

 

 

The following extracts are taken from the attached document Holmes Financing (NO.5) PLC

 

Page 44

The sale by the seller to the mortgages trustee of the mortgages has taken effect, and any sale of mortgages in the future will take effect, in equity only. This means that legal title to the loans in the trust property remains with the seller, but the mortgages trustee has all the other rights and benefits relating to ownership of each loan and its related security (which rights and benefits are subject to the trust in favour of the beneficiaries).

 

Page 101

Under the mortgage sale agreement, on 26th July, 2000 the seller transferred by way of equitable assignment to the mortgages trustee its interest in a portfolio of loans, together with all of the related security to those loans.

 

Page 104

The loans in the current portfolio were assigned, and any new loans (including the new loans to be assigned on the closing date) will be assigned, to the mortgages trustee by way of equitable assignment. This means that legal title to the loans and their related security remains with the seller until notice of the assignment is given by the seller to the borrowers.

 

Page 206

The sale of the mortgages by the seller to the mortgages trustee will take effect in equity only.

 

Page 269

The principal purpose of the Company is to acquire an equitable interest in a portfolio of mortgages and enter into all financial arrangements in that connection.

 

Page 277

The principal purpose of the Company is to acquire an equitable interest in a portfolio of mortgages and enter into all financial arrangements in that connection

 

Mortgage Solutions - GMAC RFC announces first transaction in an alternative exit strategy

 

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

The House of Lords take on securisitation

 

http://www.publications.parliament.u.../2008121en.pdf

 

Lords Amendment 6 would make clear that the provisions of clause 3 relating to onward sale of the loans do not apply to the creation or transfers of equitable rights that occur in a securitisation. Rather, it clarifies that clause 3 relates only to the onward transfer of legal title to the loans. The amendment ensures that the transfers of equitable interests that occur as a normal part of a securitisation are separate from the onward transfer of legal title, and which do not require the same protections.

The following relates to the attached document SPVs and Securitisations.

 

 

 

The following extract was taken from Mortgage Backed Securitisation in the United Kingdom(attached to this post)

 

 

 

The following two extracts are taken from An Analysis of the Law and Practice of Securitisation (copy attached to this post)

 

 

 

 

 

The following extract is taken the attached file - Loan securitisation and risk transfer

 

 

 

Not a judgement or a decision, but an extract from Pender.

 

"As Dr Eilis Ferran MA (presently Reader in Corporate Law and Financial Regulation at Cambridge University) points out in a book entitled 'Mortgage Securitisation – Legal Aspects' (Butterworths, 1992) to which we were helpfully referred by Mr Ali Malek QC (for Paragon) in the course of argument, if the transfer of the mortgages is not completed by registration, the SPV acquires an equitable title to the mortgage but the transferor retains the legal title, albeit as trustee for the SPV (assuming, as will usually be the case, that the full consideration has been paid). Dr Ferran goes on to point out that, for reasons essentially of administrative convenience and cost, transfers by way of securitisation are usually left uncompleted, but with provision being made for completion in certain specified circumstances, e.g. if the transferor persistently defaults on its obligations under the securitisation arrangements. Typically, such obligations will be contained in an 'administration agreement' between the transferor and the SPV. These general observations about securitisation (for which I am indebted principally to Dr Ferran's book) are not the subject of dispute in the instant case."

 

 

To place the above extract into context, Dr Eilis Ferran is a Professor of Company and Securities Law at the University of Cambridge:

As you would anticipate with someone with her credentials, she is published:

 

'The Place for Creditor Protection on the Agenda for Modernisaiton of Company law in the European Union' (2006) 3 European Company and Financial Law Review 178

'Transatlantic Financial Services Regulatory Dialogue' (with K Alexander, HE Jackson and N Moloney) (forthcoming European Business Organization Law Review Building an EU Securities Market (CUP, 2004)

'Financial Assistance: Changing Policy Perceptions but Static Law' [2004] Cambridge Law Journal 225 - 243

'The Role of the Shareholder in Internal Corporate Governance: Enabling Shareholders to Make Better-informed Decisions' [2003] European Business Organization Law Review 491 - 516

'Examining the UK Experience in Adopting the Single Financial Regulator Model' (2003) 28 Brooklyn Journal of International Law 257-307

'Dispute Resolution Mechanisms in the UK Financial Sector' [2002] Civil Justice Quarterly 135-155 (also published in a report to the Korean Stock Exchange, Self-Regulation in the Korean Securities Market Korean Securities Law Association, 2002)

'Corporate Law Codes and Social Norms - Finding the Right Regulatory Combination and Institutional Structure' [2001] Journal of Corporate Law Studies 381-409

Ferran and Goodhart (eds) The Challenges Facing Financial Regulation (Hart Publishing, 2001)

'Company Law Reform in the UK' (2001) 5 Singapore Journal of International and Comparative Law 516-568

Boyle and Birds Company Law (Jordans, 2000) (with Boyle, Birds and Villiers)

Company Law and Corporate Finance (OUP, 1999)

 

Employment History:

 

Reader in Corporate Law and Financial Regulation (2000 – 2005)

University Lecturer, (1991 – 2000)

University Assistant Lecturer, (1988–1991)

Director of the Centre for Corporate and Commercial Law, (April 1999 – September 2003)

Assistant Director, Centre for Corporate and Commercial Law, (1997–1999)

College Lecturer, St Catharine’s College, Cambridge (1986–1988 )

Trainee Solicitor, Clifford Chance, solicitors (1984–1986)

 

Qualifications

 

PhD, University of Cambridge, 1992, (by special regulations)

BA, University of Cambridge 1983 (Law Tripos First Class with Distinction)

 

Securitization: The Financial Instrument of the Future by Vinod Kothari

 

• Publisher: John Wiley & Sons; Har/Cdr edition (18 Aug 2006)
  
• Language English
  
• ISBN-10: 0470821957
  
• ISBN-13: 978-0470821954
  

Page 611 (continued on Page 612)- Equitable Assignment

 

"Why Equitable Assignment?

 

"Why do entities resort to equitable assignment? Essentially, to avoid the difficulties involved in full-scale legal transfer. These difficulties may either include having to notify the debtor (as under U.K. or Hong Kong law) or the stamp duties associated with a conveyance that the receivables (as in U.K. and India). Some preconditions for effecting an equitable transfer are:

 

 

• There must be an express intention on the part of the transferor to assign receivables.
  
• The receivables must be identified
  
• The buyer must have paid the consideration
  
• Though the obliger is not notified, the transaction must be carried out between the transferor and transferee as if full scale transfer had taken place. Therefore, the seller must not be paying from his general funds, but out of a specific fund or collections from the receivables.
  
• To allow the transferee to proceed against the obligors if the need arises, the transferor should be given a power of attorney authorizing the transferee to collect payments from the obligors.
  
• To support and strengthen the power of attorney specified above, a mandate should also be given requiring the obligors to pay the transferee."
  

And.......

 

Securitization Law and Practice: In the Face of the Credit Crunch (International Banking & Financial Law Series) by Jan Job de Vries Robbe

 

 

• Publisher: Kluwer Law International (30 Jun 200:cool:
  
• Language English
  
• ISBN-10: 9041127151
  
• ISBN-13: 978-9041127150
  

Page 399 - 9.26 Legal Risks

 

"In English Law governed securitization transactions, one of two forms of assignments are used, equitable or legal assignment. If the assignment is equitable only, without notification to the borrower, then it only allows for protection under equity to the SPV as assignee. To ensure full protection at law however, the underlying borrowers must be notified of the assignment. The is generally done after the occurance of certain trigger events, which could indicate an increased risk of insolvency of the seller"

 

 

 

 

In my opinion, the important segments of the above securitisation structure are:

 

1) "Equitable Assignment of mortgage loans. The legal title is retained by the Originator (trustee) and the SPV aquires an equitable one (beneficary)"

 

2) "The SPV, who is the issuer of the MBS (mortgage backed securities) and a bankruptcy remote vehicle, creates, owns in equity and manages the pool of mortgages. He is the new equitable mortgagee."

 

Point 1, confirms that the originator retains the legal title and the SPV aquires the equitable title. Point 2, confirms that the SPV becomes the new equitable mortgagee, which may explain the letters some caggers have received relating to insurance policies.

 

3) "He (trustee of the issue) receives a mortgage over the pool of mortgage loans (sub-mortgage) and a floating charge over the SPV's assets in warranty of the over the MBS holders."

 

The above diagram was taken from:

 

 

Innovation in Securitisation: Yearbook 2006 (International Banking & Finance Law) (International Banking & Finance Law Series)

• Publisher: Kluwer Law International (1 Jun 2006)
  
• Language English
  
• ISBN-10: 9041125337
  
• ISBN-13: 978-9041125330
  

Page 126 - Section 3.2 The Role of the Trust in an English Securitisation Process.

 

Book Description:

 

"Despite fears that regulators around the world would act to curtail securitisation severely in the aftermath of the collapse of Enron, WorldCom, and Parmalat, the securitisation industry has witnessed what can only be described as relentless innovation. Securisation remains one of the most important means for financial institutions to diversify their funding, transfer credit risk and manage solvency requirements.

 

This volume, the second in a series focusing on the latest innovations in the global securitisation industry, provides advisers with detailed guidance on key structural and legal issues of innovative securitisations, as well as describing the most recent developments in the accounting and risk-capital treatment of securitisation transactions.

 

The contributors represent a wide range of expert participants in the design, execution, and regulation of securitisation transactions. Among the critical features of contemporary securitisation covered are the following: project finance CLOs; securitisation of equity risk; securitisation of commodity risk through commodity trigger swaps; the convergence of structured credit and securitisation markets; innovation in RMBS: negative equity transactions; innovation in CMBS: A/B structure; new markets in Europe, Japan, and Islamic countries; catastrophe risk securitisation; effect of recent US bankruptcy legislation on synthetics; microfinance loan securitisation in emerging markets; public sector securitisation; securitisable intellectual property; application of accounting standards in a rapidly changing environment, and updated analysis of Basel II.

 

The above is not based purely upon my own personal opinion. I have provided a number of sources that I have quoted them directly. I have not felt the need to interpret or translate as others continually do to support their arguments.

 

But it is ok the following listed below and above in great detail can be ignored.:confused:

 

Case Law (common law)

Leglisation

Halbury's

House of Commons

Securitisation Documentation

House of Lords

A Cambridge Professor

Author's

[Meerkat One]

Patrickq1

Thank you - I really do not know how you do it. This will keep us occupied for while!

 

Do not over do it.

 

Meerkat One

[patrickq1]

introduction

 

 

A guide to endeavours clauses

 

The majority of commercial contracts these days will often contain an obligation on one party to use some form of endeavours or effort to achieve a specified objective. Such a clause is often referred to as an endeavours clause and will usually require the party concerned (the obligor) to use their best or reasonable endeavours to achieve a particular objective or procure its achievement. In certain circumstances the contract may require the obligor to take ‘all reasonable’ endeavours to fulfil a particular contractual obligation. Whilst such clauses invoke an expectation of performance on the part of the obligor there is also the risk that such a party may not be able to perform the contractual obligation in question depending on the level of effort required of them in order to fulfil the obligation in question.

There has been some uncertainty as to what efforts each different endeavours clause requires since the satisfaction of such a clause will also be assessed by reference to other factors such as other provisions contained in the contract, the surrounding commercial context and the applicable facts at the time of the performance of the obligation in question.

This article briefly considers some of the key characteristics of each type of endeavours clause in light of case law and provides guidance on the steps that ought to be taken by a party in order to fulfil its obligations under such a clause.

Best Endeavours

An obligation on a party to use its best endeavours will usually require that party to do all that it can within its powers to ensure the fulfilment of a particular contractual obligation. The Court of Appeal has stated that such a clause would require the obligor “to take all those steps in their power which are capable of producing the desired results...being steps which a prudent, determined and reasonable [person], acting in his own interests and desiring to achieve what result, would take”.

Whilst this may be an onerous obligation on the part of the obligor, the courts have pointed out that it is not an absolute obligation nor is it the next best thing to an absolute obligation. It is interesting to note, however, the reference to reasonableness which requires a person to at least be doing that a reasonable person could do in the circumstances.

It has been held that while a best endeavours clause may require the obligor to incur expenditure in the fulfilment of the obligation in question, the obligor will be permitted to have some regard for his own commercial interests in determining what course of action to take and he may in certain circumstances be able to override a best endeavours obligation. For example, an obligation on the directors of a company to use their ‘best endeavours’ to pass a resolution does not require them to give bad advice to their shareholders and recommend the resolution as soon as it ceases to be in the company’s best interests.

In practice, however, a company that is subject to a best endeavours obligation will usually be required to (a) take all commercially practicable action, (b) incur reasonable expenses in the performance of that obligation and © if necessary, divert resources from elsewhere within its business in order to fulfil that obligation.

Reasonable Endeavours

An obligation on a party to use ‘reasonable’ endeavours, on the other hand, allows that party to balance the weight of the contractual obligation imposed upon it against all relevant commercial considerations (i.e. its relations with third parties and its reputation) in determining the particular course of action it is required to take. The considerations are subjective and are based on the circumstances of the obligor who is not required disregard his own commercial interests. It has been held by the courts that this obligation does not extend to taking legal action which the obligor is doubtful may have a successful outcome. Of course, there may well be circumstances where taking legal action or appealing against a decision would be necessary to the fulfilment of such an obligation.

It has been suggested in one particular case, that a reasonable endeavours obligation will only require a party to take one reasonable course of action rather than many. In addition, the courts have stated that where a particular course of action is specified in the reasonable endeavours clause, they will expect that course of action to be taken before the reasonable endeavours obligation is fulfilled even if it is not in the commercial interests of the obligor. This appears to be a caveat from the principle that no action which is detrimental to the commercial interests of the obligor needs to be taken.

In practice, a company that is subject to a reasonable endeavours obligation will usually be required to take all commercially practicable action (but only to the extent that this does not cause the company to act to the detriment of its commercial interests) and unlike a best endeavours obligation will not require the company to divert resources from elsewhere within its business in order to fulfil such an obligation.

There are several variations to a reasonable endeavours clause. Such clauses may require a party, for example, to use ‘commercially reasonable endeavours’ or ‘reasonable commercial endeavours’. The courts have given very little guidance on the interpretation of such terms or indeed how they would differentiate between such terms, particularly as reasonable endeavours obligations already permit an obligor to consider all relevant commercial factors.

All Reasonable Endeavours

The term all reasonable endeavours is often adopted during the course of negotiations as a compromise between best and reasonable endeavours. The orthodox view has been that such an obligation implies something more than reasonable endeavours but less than best endeavours which reflects the ordinary and natural meaning of the phrase.

The High Court in a recent case has given some useful guidance on the factors that may be considered in what is meant by all reasonable endeavours. This case involved a group of companies that were obliged pursuant to the terms of an exclusive distribution agreement to use all reasonable endeavours to promote and sell a supplier’s products in the UK and Eire. The judge found that the reasonable endeavours clause imposed an obligation on the distributor to do everything that a reasonably competent and energetic distributor would do to promote the products of the supplier knowing that the supplier was entirely dependent on the efforts of the distributor to achieve sales over the course of the exclusive distribution agreement which was for a minimum term of 20 years.

Although the judge allowed distributor a reasonable margin of discretion in determining how to discharge its obligation under the exclusive distribution agreement, he nevertheless held the distributor to be in breach of its obligation to use all reasonable endeavours to promote and sell the supplier’s products. The judge found the following facts to be relevant in reaching in his decision: (i) sales of the supplier’s products had declined at a time of significant growth in the rest of the comparable UK market, (ii) the distributor had failed to produce any structured marketing plans, (iii) the distributor had inadequate systems for forecasting and logging sales and (iv) the supplier had failed to produce marketing materials and attend trade seminars.

Although this case appears to have been decided on its facts, it does provide a useful example of the factors it will take into account in determining whether a party has complied with its obligation to use all reasonable endeavours to fulfil a contractual obligation.

Practical Considerations

As can be seen from the above, it is not always easy for a party to determine what steps an endeavours clause may actually require them to take in any given case. In considering the steps that the relevant party should take, the parties to the contract should have regard to the following: (i) whether the obligor will be required to incur expenditure to achieve the objective and if so how much, (ii) the specific activities the obligor is not expected to carry out, (iii) whether it is necessary for the obligor to take legal action to fulfil its obligation and (iv) the period which the obligor should pursue that objective.

The parties ought to be bear in mind that whichever type of endeavours clause is adopted, the obligor will not be under absolute obligation to fulfil the relevant task unless the endeavours clause expressly provides for a particular course of action to be taken.

[mungos mum]

Hi Everyone

 

As you know a lot of us have been struggling with Mortgage Express & the various LPA receivers they have instructed to 'manage' our properties for a while now.

 

A small group of us have got together & are now using a highly regarded Solicitor & Barrister to help us with our fight.

These guys have been brilliant & have supported us even though they know we have very little money with which to fight.

We have been sorting through all the paperwork we have from both the lender & the receivers and we have all done a lot of research.

A junior solicitor in the practice has collated all of this info & we now have a few, quite organised, folders full of things both the lender & receiver have done wrong either legally or morally.

Our Solicitor has asked if we know of any other people who would be interested in setting up a class action/pressure group to fight against MeX & their receivers.

He's thoughts are that maybe a group of us could perhaps meet in a central location (as we are all scattered across the country) to discuss ways of making this work & then take it from there.

 

If anyone has any thoughts or comments about this then please do let me know...I have no idea how these things work & certainly do not pretend to have any answers but I do feel that as a group we stand a much better chance of making 'them' sit up & pay attention.

 

If anyone is interested then please send me a private message.

Many thanks

Mungos Mum x

[patrickq1]

ive Sent A Request Asking The Mods To Turn This Into A Sticky

Action Group Against Bradford And Bingley And Other Buy To Let Mortgage Companies

[patrickq1]

this is the correct procedure now start an action group and involve the Lawers i will help with some research as much as i can...

patrickq1

[mungos mum]

Hi patrickq

 

How are you feeling at the moment? any joy with your test results?

 

Thanks for asking the mods to start a 'sticky' for us but what does that mean?

Will the caggers who read these particular posts still read it easily?

I'm a bit worried now as I am comfortable here & know people...oh heck!

 

MM x

[patrickq1]

yes this thread will carry on

it just means (if the mods listen)that anyone with problems with mex and B&B and others will be directed to the sticky this thread will carry on whats hoped for is the action group will be able to input on the sticky thread ,sticky just means a headline thread really ...lol something like that

[Dunnin]

Hi all, I have been reading all your comments recently, and though technically it is a lot to take on, my husband and I are so grateful to you all for sharing your stories. This is the first time I am actually responded, but have been following the various threads since Jan 2010. We are in a very similar predicament with regards to MX and LPA Receivers. The repossession of our property has put us in so much debt we are on the verge of bankruptcy. We are more than happy to join your action group and would love to meet you all at some stage. Like you, there is little money around but collectively I guess we can get there. MX are heartless people who have an agenda which does not consider the damage that they cause within families.

 

Patrick, you are a don, and have so much offer, Mungo's Mum, I love your directness. We no longer feel alone in this world, though it is still pretty difficult to concentrate on anything but MX and their thuggish ways.

 

Thanks for giving me this opportunity to vent and also hope that we can take these people to task.

[patrickq1]

your welcome dunnin,i geuss you are almost at the end of your tether,i can imagine but stay strong and stay on here,first of all have you SENT A SAR NOTICE TO MORTGAGE EXPRESS IF NOT DO SO IMMEDIATTELY

PATRICKQ1

http://www.consumerforums.com/resources/templates-library/48-bank-templates/110--data-protection-act-1998-subject-access-request

[Dunnin]

No, we have not sent a subject access request, will do so tomorrow. Guess I do this in writing and by recorded delivery?

 

Will read the link and follow the instructions.

 

Thanks for the welcome

 

dunnin

[pigland]

Well, hi all,

 

Been watching with entertainment the goings on here. Patrick....wow! MM you already know my trotters raised and I am in support of any action that you bring.

 

Dunnin, there is so much more support than you realise, so please don't despair! If you've made telephone calls to Mex, make a note of dates, times and who you've been speaking to. Please note they have been known to tell porkies and mislead you!

 

Kind regards,

 

PL

 

p.s. Patrick. Mex are not sending me copies of my calls even though I sent an SAR last August. How can I take the data controller to court? IMHO Mex knows the system so the Information Commissioners Office is a waste of time!

 

Has anyone had any success?

Edited June 8, 2010 by pigland

[patrickq1]

Yes Also Send 10.00 Pounds Postal Order Or Cheque...and Registered Post,you Need Now To Keep A File And Enter Dates Times And Contacts And All Letters Including Envelopes And Itemise Each Letter In Date Order...i Say This Because It Makes It So Much Easier To Go Back On Reference Numbers With Dates...and Then You Wont Get All Cluttered Up And Lose Paperwork...

If Anyon Has A Copy Of The Mortgage Certificate From B And B And A Seperate One From MX Could You Pm It To Me Keep All Identifying Marks And Names Of It Though

Patrickq1

[patrickq1]

FSA fines Kensington Mortgages £1.2m | Money | guardian.co.uk

[patrickq1]

dont forget everyone to send a serious complaint to the FSA concerning MEX

[supersleuth]

Walker Singleton, alas I know them well, unconscionable to say the very least.

I could write a book on this shower, but to name but a few: -

1. I have evidence that shows a senior director/partner actually invited a Bank to appoint two of his fellow Directors as LPA receivers over a particular property. (not Mortgage Express)

2. Further evidence reveals that Walker Singleton Receivers helped the Bank avoid payment of VAT.

3. I have it in writing that Walker Singleton's (lower) fees reflect the volume of work undertaken for the Bank.

4. Sent a SAR to WS, was advised I was free to examine documentation at their office. Appointment duly made, but WS cancelled.

 

Do you want me to go on?

 

Hi there diddled,

 

Yes I would like you to go on. Please could you look at my thread here:

 

http://www.consumeractiongroup.co.uk/forum/mortgages-secured-loans/262954-expose-your-lender-horror.html#post2969717

 

The conflicts of interests issue and corrupt practices are things that would be of great interest if you could help with the research to expose the issues.

[patrickq1]

thanks Super great work ,lets hope this all comes to fruition and brings in the FSA to do what they should have done long ago and also the police,the horrors these people have had to endure,

let super know all you can guys and gals ,

this is the start you have been looking for...MM now you can introduce new evidence for a class action on what information super can bring to the table...

patrickq1

[patrickq1]

http://www.consumeractiongroup.co.uk/forum/attachment.php?attachmentid=18945&d=1275996479

[patrickq1]

Any of the below circumstances may constitute mortgage mis-selling.

• Questioned to ascertain all the key facts about your mortgage application
  
• Offered a choice of mortgage products
  
• Offered Self Certification Mortgage when employed or self employed
  
• Told that you only qualified for a sub-prime mortgage
  
• Advised the mortgage end date went past your retirement age
  
• Offered PPI on your mortgage or loan
  
• Charged a Broker and Lender fee
  
• Encouraged to change your income or include benefits
  
• Asked about all your financial liabilities
  
• Advised to increase the size of your mortgage
  

[pigland]

THE LAW OF PROPERTY ACT 1925

Execution of instruments by or on behalf of corporations

74.(1) In favour of a purchaser a deed shall be deemed to have been duly

executed by a corporation aggregate if its seal be affixed thereto in the presence of and attested by its clerk, secretary or other permanent officer or his deputy, and a member of the board of directors, council or other governing body of the corporation, and where a seal purporting to be the seal of a corporation has been affixed to a deed, attested by persons purporting to be persons holding such offices as aforesaid, the deed shall be deemed to have been executed in accordance with the requirements of this section, and to have taken effect accordingly.

(2) The board of directors, council or other governing body of a corporation

aggregate may, by resolution or otherwise, appoint an agent either generally or in any particular case, to execute on behalf of the corporation any agreement or other instrument which is not a deed in relation to any matter within the powers of the corporation.

(3) Where a person is authorised under a power of attorney or under any statutory or other power to convey any interest in property in the name or on behalf of a corporation sole or aggregate, he may as attorney execute the conveyance by signing the name of the corporation in the presence of at least one witness, and such execution shall take effect and be valid in like manner as if the corporation had executed the conveyance.

THE LAW OF PROPERTY ACT 1925

Execution of instruments by or on behalf of corporations

74.(1) In favour of a purchaser a deed shall be deemed to have been duly

executed by a corporation aggregate if its seal be affixed thereto in the presence of and attested by its clerk, secretary or other permanent officer or his deputy, and a member of the board of directors, council or other governing body of the corporation, and where a seal purporting to be the seal of a corporation has been affixed to a deed, attested by persons purporting to be persons holding such offices as aforesaid, the deed shall be deemed to have been executed in accordance with

the requirements of this section, and to have taken effect accordingly.

(2) The board of directors, council or other governing body of a corporation

aggregate may, by resolution or otherwise, appoint an agent either generally or in any particular case, to execute on behalf of the corporation any agreement or other

instrument which is not a deed in relation to any matter within the powers of the corporation.

(3) Where a person is authorised under a power of attorney or under any statutory or other power to convey any interest in property in the name or on behalf of a corporation sole or aggregate, he may as attorney execute the conveyance by signing the name of the corporation in the presence of at least one witness, and such execution shall take effect and be valid in like manner as if the corporation had executed the conveyance.

 

 

Who else had their LPA receivers appointed by the admin assistant at Mex?