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#repossessions : Important changes to the mortgage reposession pre-action protocol


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Hi all.

 

As of 6th April the pre-action protocol for mortgage arrears was strengthened. It used to be that a lender should have followed the rules, this has now been changed to state that they MUST follow the rules. In addition, as part of the proceedings the lender would need to submit a n123 form outlining to the court what they've done to adhere to the rules.

 

Here's a copy of the form:

 

http://www.hmcourts-service.gov.uk/courtfinder/forms/n123_e.pdf

 

Here's a copy of the pre-action protocol:

 

http://www.justice.gov.uk/guidance/courts-and-tribunals/courts/procedure-rules/civil/contents/protocols/prot_mha.htm

 

It's all very good for the consumer (for once!) check out sections 5 & 6 of the protocol.

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Erm!

Both links don't work mate :|

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  • 3 weeks later...

Watching this one closely for my clients. The copy I have doesnt state 'Must' in every point. most notably 7.2 where it says "Starting a possession claim should normally be used as a last resort" but then goes on to say "A claim 'Must' not normally be started unless all other reasonable attempts to resolve the position have failed".

 

Interestingly they have added, to the stadard 4 things to consider, a line stating "Make use of any government forbearance initiatives in which the lender chooses to particpate. Since the demise of HMS, that pretty much only leaves Mortgage rescue, and our zone agent is going to be restricing eligibility to prioritising 3 bed need or properties adapted for disability. So not too hopeful about the new changes.

 

A couple of articles I have read, on solicitors websites, dont seem to see much change because they state most lenders are following the protocol anyway. This is complete nonsense. 99% of the cases I deal with the lenders still go for possession without looking into alternatives and also fall fould of 5.5, the requirement to turn donw an offer in writing within 10 business days.

 

So I am hoping that once the new cases come under the new protocol, any day now, we may be able to get applications struck out, rather than just going for suspensions and adjournments based on Norgan offers.

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1. Does this apply to cases started before April, but not yet heard?

2. How does the Defendant know if form N123 has been submitted? Is the Defendant entitled to a copy?

If my comments have been useful please click the scales and let me know.

 

Me vs Rockwell/Tessara/RBofS: pending.

Me vs MBNA/1st Crud: Discontinued.

First Direct Overdraft: CCJ won.

IR: 2 CCJs 1 won.

Birmingham Midshires: pending

BT: pending

others to come....

 

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Yeah its for claims after that date so we should start seeing them come in soon.

 

The lender has to submit an N123 with their court paperwork and yes, the borrower is allowed a copy. The thing is I have yet to see one proferred up front. The first I see of them is when I turn up at court to defend. You can see the blank form on the courts website.

 

Common mistakes I see so far, and several judges are commenting on this, is for point 3 of the form which states "Do you have evidence that the defendant has made a claim for Support for Mortgage Interest payments, the Mortgage rescue Scheme, Mortgage payment protection (insurance). If yes, please explain why possession proceedings are continuing".

 

Point 7 is often breached too. This asks if an offer has been rejected by them within the past 3 months and if they have complied with point 5.5 of the pre-action protocol. 5.5 states refused offers must be in writing and sent within 10 business days of receipt of offer. Many times they just say no over the phone and dont follow up with letter in required time....if at all.

 

Up until now these common breaches were often not taken that seriously by the judges (speaking solely from my own experience in the 3 courts I go to), in that I have never had a case struck out on basis of a breach but in making the protocol a set of rules, defence advocates or borrowers should be able to mount a serious challenge based on breaches, probably even basis for a complaint to FSA. I have noticed judges asking to see the N123 more regularly in the last few weeks so maybe things are going that way.

 

I will be attending our local county court users group meeting soon and will be able to ask the judges how they will view this and report back on here.

Edited by Ben Reeve-Lewis
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So if defendant hasn't seen one, should he ask the claimant or the court for a copy?

If my comments have been useful please click the scales and let me know.

 

Me vs Rockwell/Tessara/RBofS: pending.

Me vs MBNA/1st Crud: Discontinued.

First Direct Overdraft: CCJ won.

IR: 2 CCJs 1 won.

Birmingham Midshires: pending

BT: pending

others to come....

 

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No reason why you shouldnt ask the claimant before court. they have to have one to show the court so should be able to supply one. If you ask them for one and they dont give you one, bring this to the judges attention. Bear in mind that all paperwork being used in court for possession should be shared with the claimant before the hearing so that the defendant has an opportunity to prepare their defence.

 

As I said though, the first time I get to see them is usually 2 minute before we go in, thats why I have developed the habit of focussing quickly on those points I mentioned and asking the defendant if this is as stated. The most difficult part is where the claimant lists all phone calls and letters. If there is a long list it is often difficult for the defendant to agree or dispute what is set down while we are sitting in the waiting area.

 

When I begin negotiating with lenders I write asking for all the information that would normally go on an N123 anyway, on the basis that they will have to provide it at some point. They just ignore the request haha

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Hello all,

 

this thread is good news.

However, does the protocol apply to cases where there has been a Suspended Possession Order granted? Or can they go still go straight for the jugular if they have one?

 

yeats

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Not enough info in your post to be able to tell Yeats.

 

The pre-action protocol (including submission of an N123) should have taken place before the SPO was granted. If possession was granted then the judge was probably satisified with the pre-court procedure (although not always and it is worth checking to see if it slipped by a judge desperate to get to lunch)

 

SPO's are usually granted 'on terms'. The terms commonly being that the defendant pay the contractual monthly installment (CMI) plus an agreed amount off of the arrears. In mortgage cases usually based on what is called the Norgan figure.

 

If it was an SPO that the defendant didnt keep to, then the claimant can go straight for Bailiff's warrant using an N325 but if possession was 'postponed' (PPO), then the claimant cant go direct to bailiff's without further permission of the court.

Edited by Ben Reeve-Lewis
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Thanks Ben.

So the rules just don't apply at SPO stage, as it is at the original repossession hearing that any objections would need to be aired?

 

yeats

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Ben,

 

I've posted thanks twice but it hasn't stuck. Not sure if I'm being moderated or what... :-(

If my comments have been useful please click the scales and let me know.

 

Me vs Rockwell/Tessara/RBofS: pending.

Me vs MBNA/1st Crud: Discontinued.

First Direct Overdraft: CCJ won.

IR: 2 CCJs 1 won.

Birmingham Midshires: pending

BT: pending

others to come....

 

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I think the rules apply to suspended possession order. Here is my story. I had a Suspended Possession Order on my property in 2007 and a warrant for possession was schedule for May 3 2011. I wrote the Lender (Barclays) that their action was a violation of Mortgage Conduct of Business Rules( MCOB) 13.3, 13.4 and 13.5. I also told them that the possession warrant not according to CCR 26 (Rule 17) 3A. I asked them to provide me details of all the charges applied to my account and that if I did not receive the information as requested I will ask the judge for an order "Putting Barclays to strict Proof".

The solicitor replied me with some bogus breakdown via email. (NB: I will soon file a third party complain against this solicitor to the solicitor regulations board for this bogus breakdown) I ignored the breakdown and filed my application notice (N244) and the hearing was scheduled for April 27 2011. At the end of my witness statement I stated " THE CLAIMANT MUST BRING 2 COMPLETED COPIES OF FORM 123 (PROTOCOL CHECKLIST) to the hearing. The solicitor that came for the hearing asked the judge to adjourned the hearing because he did not know much about the case. The judge adjourned the hearing and suspended the eviction asking them to make sure they carefully look into the payment breakdown that I provided.

After the hearing I received a letter from the solicitor dated 21st April 2011, which was the same date I filed my application that the eviction has been withdrawn. I think the warrant was quickly withdrawn because I stated that they must bring 2 completed copies of Form N123 but I didn’t receive the letter until after the hearing. Also, I noticed when Barclays received my letter requesting for breakdown, they carefully sorted my account and capitalize the arrears with details of my monthly payment and this was dated April 11 2011 which was the date they promised me they were going to reply my letters but I didn’t receive the statement and my new monthly installment until after the hearing.

I also think it is better to deal directly with the lender instead of their solicitor.

Below is an extract from my witness statement

 

1. The Claimant’s claim for possession of the mortgages premises is falsely premised

and vexatiously sought.

2. It is falsely premised because:

a) The eviction warrant issued by the Claimant on 17th March 2011 is a violation of MCOB 13.4 & CCR 26 Rule 17 (3A). The Claimant letter of March 24, 2011 claimed the arrears of £5313.90 and its solicitor letter of March 22 2011 claimed £7705.48 in arrears. I requested for breakdown of the arrears but the Claimant refused. The Claimant requires under MCOB 13.4 to provide (1) current FSA information sheet on my mortgage arrears;

(2) a list of the due payments either missed or only paid in part; (3) the total sum of the payment shortfall; and (4) the charges incurred as a result of the payment shortfall. Exhibit 1 are details of my correspondences requesting for these information

………………etc

 

3. The claim is vexatiously sought, as the lender has not observed the Civil Justice Council’s pre-action protocol on mortgage repossession. Specifically: “The court takes the view that starting a possession claim is usually a last resort and that such a claim should not normally be started when a settlement is still actively being explored. Discussion between the parties may include options such as:

a) extending the term of the mortgage;

b) changing the type of a mortgage;

c) deferring payment of interest due under the mortgage;

d) or capitalising the arrears”

I respectfully submit that the Claimant has explored none of these options. I cite Norgan V Cheltenham & Gloucester 1996 as an authority creating precedent from the Court of Appeal that the terms of the mortgage contract can be varied to allow repayment of the genuinely constituted arrears over the remainder of the mortgage term.

...........................etc

Hearing

 

The Claimant must bring 2 completed copies of Form N123 (Protocol Checklist)

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Cant help but wonder if this would allow a SPO to be set aside? I have good evididence to show that nearly every point was not met prior to acting on a SPO from 5 years previous....where the orginial arrears had been cleared!

Please overlook my typos and spelling mistakes, sometimes my fingers arent in sync with my brain :)

I am just a consumer and have no legal training. My posts are opinion only, based on my own limited experience. If in doubt you should seek legal advice from a qualified practitioner.

 

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At my application hearing, I told the judge that the arrears on the SPO were previously cleared and that the SPO is no more valid. The judge said as long as the mortgage is still with the same lender the SPO still valid. But my argument was not based on the lender's failure to follow the MCOB rules before the SPO.

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At my application hearing, I told the judge that the arrears on the SPO were previously cleared and that the SPO is no more valid. The judge said as long as the mortgage is still with the same lender the SPO still valid. But my argument was not based on the lender's failure to follow the MCOB rules before the SPO.

I dont want to diviate too far from the topic, but I now know that a SPO is forever valid, even if the arrears are cleared. The only way to avoid this is to apply to have the SPO discharged as soon as the arrears are cleared. I didnt know that then, and of course the bank wasnt going to volunteer the info.

 

I have been debating whethe ror not to try to get my SPO set aside as the arrears amount was disputed in the hearing, the judge instructed (but didnt order) the bank to provide a break down of the arrears. 6 months later, multiple SAR letters, a CCA request, and I still dont have a breakdown. But I think the court wouldnt entertain setting the SPO aside as there are arrears, just the amount is wrong.

Please overlook my typos and spelling mistakes, sometimes my fingers arent in sync with my brain :)

I am just a consumer and have no legal training. My posts are opinion only, based on my own limited experience. If in doubt you should seek legal advice from a qualified practitioner.

 

Activ Kapital - Disputed £4,000.00 - 04/04/2011 Settled! WON!

HSBC Current Account - Defaulted for £200.00 Charges. - 19/05/2011 Charges Refunded Default Removed! WON!

HSBC Loan Account - £16,000.00 Unsecured Loan - 05/07/2011 Disputed No Further Contact WON! (for Now)

Barclaycard Account - Disputed account and £1500.00 Charges. - 18/07/2011 Charges Refunded! WON!

London Scottisht - Disputed account and Charges. £25,000.00 - 06/2011 Balance reduced by 95% WON!

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At my application hearing, I told the judge that the arrears on the SPO were previously cleared and that the SPO is no more valid. The judge said as long as the mortgage is still with the same lender the SPO still valid. But my argument was not based on the lender's failure to follow the MCOB rules before the SPO.

Hi - generally I think that whatever has been already been judged has been accepted and then there are time limits for taking action if that is wrong - maybe applying for a variation order to the payments or something - I was interested in what your judge said about SPO being valid still with the same lender as I have a new lender (mortgage sold on again) that is using the previous SPO -?? If you take up issues about your contract and the pre action compliance then there might be a risk of then paying for all that extra legal work if you dont win - maybe you could ask for a redetermination hearing?

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Hi - generally I think that whatever has been already been judged has been accepted and then there are time limits for taking action if that is wrong - maybe applying for a variation order to the payments or something - I was interested in what your judge said about SPO being valid still with the same lender as I have a new lender (mortgage sold on again) that is using the previous SPO -?? If you take up issues about your contract and the pre action compliance then there might be a risk of then paying for all that extra legal work if you dont win - maybe you could ask for a redetermination hearing?

Mortgage sold to a new lender is still the same mortgage. You were not involved in the changes. I think what the judge meant was a fresh new mortgage, though the judge asked me if I sought legal advice regarding this issue. I hope to ask for a re-determination hearing but at the moment I have an application before FOS once the FOS makes its final decision I will decide.

I also have another question, at the hearing the judge suspended the eviction but the letter from the court stated Notice of Adjourned hearing. It says the hearing has been adjourned to June 28 2011. I called the court to asked for the reason for this Notice and the court said the eviction was suspended and the hearing was adjourned. But I have a letter from the lender solicitor dated before the hearing stated the eviction warrant was withdrawn. Do I have to ask the court to cancel my application or adjourn the hearing until after FOS decision? In my witness statement I raised some other issues regarding the debt and asked the SOP to be set aside.

Attached is my witness statement.

Thanks

Edited by bossy
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Hi - it looks like you have covered it all in your statement just try to make it a bit more concise and not repeat stuff, put it in date order and everything related to that date/time. Deal with each issue separately and number your points, make it easy to understand. There is a guide on all this somewhere on CAG at the front. Some of this is too complex for me, sorry not a legal person just had a few arguments wtih lenders myself over the years. Check the wording of the previous judgements to see if they say anything like: with liberty to restore. You ideally want an order that says as soon as you have paid x amount the order is discharged - you can apply to have an order discharged with evidence that you have met the terms now. Things that went with previous hearings and notices etc are unlikely to be looked at now as there are time limits for taking them back into court - they might well say why didnt you bring it back at the time...dont know. Hope you get it sorted out as you have done a lot of work on this. Good Luck.

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