Mortgage Deed - Does it need to be signed by the lender ?

[bhall]

Halsbury's also states -

 

 

 

63. Effect of disclaimer.

 

If the other party or parties to a deed are under no obligation, independently of the deed, to execute it or abide by its provisions, the deed is liable to be avoided by his or their disclaimer of the benefit of it1. Thus a deed of grant or other assurance of property takes effect immediately upon its execution by the grantor or assuror, and then at once passes the property expressed to be assured to the grantee or alienee, although the latter has not executed or assented to the deed, subject, however, to the property revesting in the alienor in case the benefit of the assurance is disclaimed2. Further, an obligation or duty undertaken by deed is immediately binding on the person on whom it is incumbent from the moment of his execution of the deed, and before the person who is to take the benefit of the liability so assumed has expressed his assent to the transaction3 although the latter may subsequently disclaim the benefit of the obligation4.

 

 

1 YB 7 Edw 4, 20 (pl 21), 29 (pl 14); Littleton's Tenures ss 684-685; Butler and Baker's Case (1591) 3 Co Rep 25a at 26b, 27a, Ex Ch; Whelpdale's Case (1604) 5 Co Rep 119a at 119b; Shep Touch 70, 284-285; Thompson v Leach (1690) 2 Vent 198 at 202, 208; Wankford v Wankford (1699) 1 Salk 299 at 307 per Holt CJ; Siggers v Evans (1855) 5 E & B 367 at 380 et seq; Peacock v Eastland (1870) LR 10 Eq 17; Re Deveze, ex p Cote (1873) 9 Ch App 27 at 32; Standing v Bowring (1885) 31 ChD 282 at 286, 288, 290, CA; Re Birchall, Birchall v Ashton (1889) 40 ChD 436 at 439, CA; Mallott v Wilson [1903] 2 Ch 494 at 500-502. As to disclaimer see PARAS 74-75 post.

 

2 See note 1 supra.

 

3 Butler and Baker's Case (1591) 3 Co Rep 25a at 26b, 27a, Ex Ch; and see Hall v Palmer (1844) 3 Hare 532; Xenos v Wickham (1866) LR 2 HL 296.

 

4 Wetherell v Langston (1847) 1 Exch 634, Ex Ch; and see note 1 supra.

[bhall]

It has often been asserted by the other thread that s.23(2) of the Land Registration Act 2002 applies to the powers of the borrower and not the lender. Again Halsbury's confirms that this assertion is based upon a misunderstanding of the law.

 

http://www.legislation.gov.uk/ukpga/2002/9/section/23

 

 

(2)Owner’s powers in relation to a registered charge consist of—

 

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a legal sub-mortgage, and

 

(b)power to charge at law with the payment of money indebtedness secured by the registered charge

 

As confirmed by Schedule 2 of the Land Registration Act 2002

 

http://www.legislation.gov.uk/ukpga/2002/9/schedule/2

 

Creation of legal charge

 

8 In the case of the creation of a charge, the chargee, or his successor in title, must be entered in the register as the proprietor of the charge.

 

 

 

(iii) Statutory Power of Sale

 

443. Application of the statutory power.

 

A power of sale is conferred by statute1. The mortgage must be made by deed, but, subject to this, the power applies to any mortgage, charge or lien on real or personal property or any interest in it, or any thing in action2, except certain bills of sale3, and possibly debentures upon a statutory public utility company4.

 

The registered proprietor or person entitled to be registered as proprietor of a registered charge over registered land is entitled to exercise owners' powers5, which include power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a legal sub-mortgage6.

 

An equitable mortgagee under a memorandum of charge by deed containing an appropriate power of attorney7 can convey the legal estate on sale by him in exercise of the statutory power of sale8. The power of sale does not affect the right of foreclosure9, may be varied or extended by the mortgage deed, applies to the mortgage only so far as a contrary intention is not expressed in it, and has effect subject to the terms of the mortgage deed and to the provisions contained in it10.

 

 

1 See the Law of Property Act 1925 s 101(1)(i), (5). The power in s 101(1)(i) is subject to the Commonhold and Leasehold Reform Act 2002 s 21 (no disposition of part-units: see COMMONHOLD vol 13 (2009) PARA 350): Law of Property Act 1925 s 101(1A) (added by the Commonhold and Leasehold Reform Act 2002 s 68, Sch 5 para 2). As to mortgages of commonhold land see PARA 203.

 

2 See the Law of Property Act 1925 s 205(1)(xvi), (xx).

 

3 Ie bills of sale subject to the Bills of Sale Act 1878 (Amendment) Act 1882: see Calvert v Thomas (1887) 19 QBD 204, CA. See also FINANCIAL SERVICES AND INSTITUTIONS vol 50 (2008) PARA 1742.

 

4 In Blaker v Herts and Essex Waterworks Co (1889) 41 ChD 399 at 406, debentures of all companies were thought to be excluded; but Deyes v Wood [1911] 1 KB 806 at 818, CA, suggests that the exclusion is limited as stated in the text. As to enforcing a security under the Consumer Credit Act 1974 see CONSUMER CREDIT vol 9(1) (Reissue) PARA 220 et seq.

 

5 See the Land Registration Act 2002 s 24; and LAND REGISTRATION vol 26 (2004 Reissue) PARA 908.

 

6 See the Land Registration Act 2002 s 23(2).

 

7 See PARA 133.

 

8 See Re White Rose Cottage [1965] Ch 940, [1965] 1 All ER 11, CA.

 

9 Law of Property Act 1925 s 106(2). As to foreclosure see PARA 566 et seq.

 

10 See the Law of Property Act 1925 s 101(3), (4).

[bhall]

Finally in the other thread, it has been repeatedly asserted that securitisation results in the lender losing its right to possession. Halsbury's confirms that this is also a misunderstanding.

 

 

 

386. 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 bonds. 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 purposes1. The originator retains the powers of the mortgagee, including the right to possession2 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 issuer3. 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 mortgages4.

 

 

1 See the Powers of Attorney Act 1971 s 4; and AGENCY vol 1 (2008) PARA 175.

 

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

 

3 The charge takes effect as an equitable sub-charge. As to equitable charges see PARAS 106, 118 et seq, 139 et seq.

 

4 As to transfer of mortgages see PARA 364 et seq.

[Winged Piglet]

Even when you cross reference / take into account other legislation, there is still nothing that states that a mortgage deed (not including an obligation to provide a further advance) must be signed by the lender, otherwise it is void.

 

The simple explanation for this is that mortgage deed (except those that include an obligation to provide a further advance) when read, contain no obligations for the lender. The Lender does not need to sign it, as there is nothing within the actual mortgage deed that it is agreeing to do.

 

A mortgage deed, details the obligations of the borrower only.

 

I have posted this before in this thread and recently a CAGGER has been to Court and faced the same argument from the Lenders legal representative.

 

My view is that in terms of interest rates, lack of support in difficult times and repossession, it would make more sense to look at how these are adversely effected by securitisation and to look towards the fairness towards the borrower and how securitisation may have contributed or even led to repossession.

 

Examples

 

Following securitisation is the lender prevented from extending the term, providing a product switch, changing to interest only etc etc..

 

 

Better to use arguments based on the law rather than those that are contrary to it.

 

 

Hi Ben,

 

I wonder if you can supply a reason and where it says in law that a Lender must sign the charge which creates the Deed as well as the Borrower when they deem that there is an obligation to make further advances on the Lender?

 

You agree? It seems that in these circumstances, where there is an obligation placed on the Lender to make further advances the Lender should sign? yes?

 

As you know a note will be entered into the LR register to that effect presumably so that any subsequent charges by any other party will rank behnd any further lending to the Borrower by this lender. So, if you agree that in this circumstance the Lender should sign the Deed, where in law does this eminate from?

 

From my perspective ( I may be being simplistic but not simple ;-) ) in any ordinary relationship between Borower and Lender there is always obligations on the shoulders of each party i.e. The Borrower agrees to repay money which the Lender has lent at an agreed rate of interest under terms and conditions agreed between the parties and equally, there is therefore obligation on the Lender to fulfill the borrowing requirements and lend the stated amount of money at the agreed rate for no more or no less and could for not for eg alter the interest rate if it was not stated in the loan agreement etc

 

Likewise, the LR state on their own form of charge CH1 that if the obligation exists for the lender to make further advances, they require the Lender to sign i.e. execute. Where has this come from and if this is the requirement, why when LR approve forms of charge and issue MD nos do they not still require the Lenders signature in exactly the same circumstances?

 

On a note re Halsburys Law. It is just a voice and expression of overview of the current law. Judges can and do ignore what Halsburys says. It is not definitive and absolute.

[bhall]

Hi Ben,

 

I wonder if you can supply a reason and where it says in law that a Lender must sign the charge which creates the Deed as well as the Borrower when they deem that there is an obligation to make further advances on the Lender?

 

You agree? It seems that in these circumstances, where there is an obligation placed on the Lender to make further advances the Lender should sign? yes?

 

As you know a note will be entered into the LR register to that effect presumably so that any subsequent charges by any other party will rank behnd any further lending to the Borrower by this lender. So, if you agree that in this circumstance the Lender should sign the Deed, where in law does this eminate from?

 

From my perspective ( I may be being simplistic but not simple ;-) ) in any ordinary relationship between Borower and Lender there is always obligations on the shoulders of each party i.e. The Borrower agrees to repay money which the Lender has lent at an agreed rate of interest under terms and conditions agreed between the parties and equally, there is therefore obligation on the Lender to fulfill the borrowing requirements and lend the stated amount of money at the agreed rate for no more or no less and could for not for eg alter the interest rate if it was not stated in the loan agreement etc

 

Likewise, the LR state on their own form of charge CH1 that if the obligation exists for the lender to make further advances, they require the Lender to sign i.e. execute. Where has this come from and if this is the requirement, why when LR approve forms of charge and issue MD nos do they not still require the Lenders signature in exactly the same circumstances?

 

On a note re Halsburys Law. It is just a voice and expression of overview of the current law. Judges can and do ignore what Halsburys says. It is not definitive and absolute.

 

Hello WP

 

I have previously posted a nationwide mortgage deed that contains an expressed (not implied) term that the lender is obligated to provide a further advance. That particular mortgage deed, also unlike the others posted, does indeed include a place for the lender to sign. In terms of the law applicable to 'further advances' this case be found in the LRA 2002 and previous legislation.

 

In terms of Halsbury's it is based upon established case law and direct reference to legislation- I would place more strength on it than Apples interpretations and 'fanciful ideas'. Especially when Halsbury's shows so clearly how flawed those interpretations and fanciful ideas are.

Edited December 2, 2013 by bhall

[Winged Piglet]

Hello WP

 

I have previously posted a nationwide mortgage deed that contains an expressed (not implied) term that the lender is obligated to provide a further advance. That particular mortgage deed, also unlike the others posted, does indeed include a place for the lender to sign. In terms of the law applicable to 'further advances' this case be found in the LRA 2002 and previous legislation.

 

In terms of Halsbury's it is based upon established case law and direct reference to legislation- I would place more strength on it than Apples interpretations and 'fanciful ideas'. Especially when Halsbury's shows so clearly how flawed those interpretations and fanciful ideas are.

 

Where exactly in LRA 2002 and previous legislation? does it actually say?? i've had a look but cannot find. Can you direct me Ben to the exact place please. Many thanks. WP

[Peterbard]

Hi

 

i contributed to the other thread on this issue not realizing that it had undergone such rigorous debate previously, after reading this thread I have to say that I am content that I came to the correct conclusion , which IMO coincides with that expressed by bhall. I must admit that opinion was in absence of much of the further re enforcement to that view which is presented on here, and therefore to a degree dumb luck on my part.

 

As an aside I personally would like to thank applecart and others for arguing a view that largely differs, as without them this debate would not gave taken place and I for one would not now be in the possession of the knowledge i now have.

 

It is trite but none the less true to say knowledge is power.

Edited February 2, 2014 by Dodgeball
not purely "bunb lick"

[IS IT ME?]

23 Owner’s powers

 

(1)Owner’s powers in relation to a registered estate consist of—

 

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a mortgage by demise or sub-demise, and

 

(b)power to charge the estate at law with the payment of money.

 

(2)Owner’s powers in relation to a registered charge consist of—

 

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a legal sub-mortgage, and

 

(b)power to charge at law with the payment of money indebtedness secured by the registered charge.

 

(3)In subsection (2)(a), “legal sub-mortgage” means—

 

(a)a transfer by way of mortgage,

 

(b)a sub-mortgage by sub-demise, and

 

©a charge by way of legal mortgage.

ONWERS ie are the BORROWERS Ben NOT THE LENDERS

[bhall]

23 Owner’s powers

 

(1)Owner’s powers in relation to a registered estate consist of—

 

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a mortgage by demise or sub-demise, and

 

(b)power to charge the estate at law with the payment of money.

 

(2)Owner’s powers in relation to a registered charge consist of—

 

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a legal sub-mortgage, and

 

(b)power to charge at law with the payment of money indebtedness secured by the registered charge.

 

(3)In subsection (2)(a), “legal sub-mortgage” means—

 

(a)a transfer by way of mortgage,

 

(b)a sub-mortgage by sub-demise, and

 

©a charge by way of legal mortgage.

ONWERS ie are the BORROWERS Ben NOT THE LENDERS

 

The law says different (if I say that in capital letters will it help, i will give it a try, as you often do) THE LAW SAYS DIFFERENT

 

 

I think you need to take a little time to read the Land Registration Act 2002.

 

http://www.legislation.gov.uk/ukpga/2002/9/schedule/2

 

Creation of legal charge

 

8 In the case of the creation of a charge, the chargee, or his successor in title, must be entered in the register as the proprietor of the charge.

 

The law confirms that the chargee (that would be the lender) must be entered in the register as the proprietor of the charge

 

It is written in plain english and no matter how extensive Apples mysterious powers of interpretation and translation are, the meaning can not be changed.

 

So that is clear that the lender as chargee must be registered as proprietor of the charge, please refer to the explanatory notes for the Land Registration Act 2002 - You should rely upon the official explanatory notes - not what Apple wants things to mean (just some friendly advice)

 

http://www.legislation.gov.uk/ukpga/.../division/4/14

 

Creation of legal charge

 

223.Paragraph 8 relates to a newly created charge over a registered estate or a registered rentcharge. The charge must be recorded in the register relating to the registered estate and show the chargee (typically the lender) as proprietor of that charge.

 

Notice the words 'registered estate' ?

 

Anyway, so the law is clear that the lender as chargee must be recorded in the register as the proprietor of the charge - This is not even disputable, nevermind how much Apple may try - it says what it says....

 

So now we have established beyond any reasonable question that the lender must by law be registered as the proprietor of the charge, we go back to the Land Registration Act 2002.

 

http://www.legislation.gov.uk/ukpga/2002/9/section/23

 

I will focus on s.23(2) as I think it is accepted by everyone that s.23(1) relates to the borrower.

 

"(2)Owner’s powers in relation to a registered charge consist of—

 

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a legal sub-mortgage, and

 

(b)power to charge at law with the payment of money indebtedness secured by the registered charge."

 

Please note the law 'owner's powers in relation to a registered charge'

 

The biggest hint for you (and for that matter Apple) is that it says registered charge - This is a charge that is effective at law as it has been completed by registration. If the charge is registered, the estate must also be registered (blowing Apples fanciful theories apart)

 

Anyway returning back to the LRA 2002

 

http://www.legislation.gov.uk/ukpga/2002/9/section/24

 

24 Right to exercise owner’s powers

 

A person is entitled to exercise owner’s powers in relation to a registered estate or charge if he is—

 

(a)the registered proprietor, or

 

(b)entitled to be registered as the proprietor.

 

A person is entitled to exercise owner's powers in relation to a registered charge if he is the registered proprietor.

 

Now who must by law be recorded as the proprietor of the charge ?

 

Oh yes, I remember, by law the lender must be recorded as the registered proprietor of the charge. Therefore, by law, the lender as the registered proprietor of the charge is entitled to exercise the owner's powers in relation to that registered charge.

 

Nice, simple, straightforward and undeniable.

 

I hope that is now very clear for you that the owners powers in regard to the registered charge.

 

Ben

[bhall]

To confirm that the above is not just my personal opinion

 

Halsbury's Laws of England/mortgage (VOLUME 77 (2010) 5TH EDITION)/8. RIGHTS AND LIABILITIES OF THE MORTGAGEE/(4) SALE OUT OF COURT/(iii) Statutory Power of Sale/443. Application of the statutory power.

 

(iii) Statutory Power of Sale

 

443. Application of the statutory power.

 

A power of sale is conferred by statute1. The mortgage must be made by deed, but, subject to this, the power applies to any mortgage, charge or lien on real or personal property or any interest in it, or any thing in action2, except certain bills of sale3, and possibly debentures upon a statutory public utility company4.

 

The registered proprietor or person entitled to be registered as proprietor of a registered charge over registered land is entitled to exercise owners' powers5, which include power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a legal sub-mortgage6.

An equitable mortgagee under a memorandum of charge by deed containing an appropriate power of attorney7 can convey the legal estate on sale by him in exercise of the statutory power of sale8. The power of sale does not affect the right of foreclosure9, may be varied or extended by the mortgage deed, applies to the mortgage only so far as a contrary intention is not expressed in it, and has effect subject to the terms of the mortgage deed and to the provisions contained in it10.

 

 

1 See the Law of Property Act 1925 s 101(1)(i), (5). The power in s 101(1)(i) is subject to the Commonhold and Leasehold Reform Act 2002 s 21 (no disposition of part-units: see COMMONHOLD vol 13 (2009) PARA 350): Law of Property Act 1925 s 101(1A) (added by the Commonhold and Leasehold Reform Act 2002 s 68, Sch 5 para 2). As to mortgages of commonhold land see PARA 203.

 

2 See the Law of Property Act 1925 s 205(1)(xvi), (xx).

 

3 Ie bills of sale subject to the Bills of Sale Act 1878 (amendment) Act 1882: see Calvert v Thomas (1887) 19 QBD 204, CA. See also FINANCIAL SERVICES AND INSTITUTIONS vol 50 (2008) PARA 1742.

 

4 In Blaker v Herts and Essex Waterworks Co (1889) 41 ChD 399 at 406, debentures of all companies were thought to be excluded; but Deyes v Wood [1911] 1 KB 806 at 818, CA, suggests that the exclusion is limited as stated in the text. As to enforcing a security under the Consumer Credit Act 1974 see CONSUMER CREDIT vol 9(1) (Reissue) PARA 220 et seq.

 

5 See the Land Registration Act 2002 s 24; and LAND REGISTRATION vol 26 (2004 Reissue) PARA 908.

 

6 See the Land Registration Act 2002 s 23(2).

 

7 See PARA 133.

 

8 See Re White Rose Cottage [1965] Ch 940, [1965] 1 All ER 11, CA.

 

9 Law of Property Act 1925 s 106(2). As to foreclosure see PARA 566 et seq.

 

10 See the Law of Property Act 1925 s 101(3), (4).

[Peterbard]

23 Owner’s powers

 

(1)Owner’s powers in relation to a registered estate consist of—

 

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a mortgage by demise or sub-demise, and

 

(b)power to charge the estate at law with the payment of money.

 

(2)Owner’s powers in relation to a registered charge consist of—

 

(a)power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a legal sub-mortgage, and

 

(b)power to charge at law with the payment of money indebtedness secured by the registered charge.

 

(3)In subsection (2)(a), “legal sub-mortgage” means—

 

(a)a transfer by way of mortgage,

 

(b)a sub-mortgage by sub-demise, and

 

©a charge by way of legal mortgage.

ONWERS ie are the BORROWERS Ben NOT THE LENDERS

 

How would the borrower do this ?

[bhall]

Hello Is It Me?

 

I am sorry, I forgot to also previously mention the Land Registration Rules 2003

 

http://www.legislation.gov.uk/uksi/2003/1417/article/9/made

 

Contents of the charges register

 

9. The charges register of a registered estate must contain, where appropriate—

 

(a)details of leases, charges, and any other interests which adversely affect the registered estate subsisting at the time of first registration of the estate or created thereafter,

 

(b)any dealings with the interests referred to in paragraph (a), or affecting their priority, which are capable of being noted on the register,

 

©sufficient details to enable any registered charge to be identified,

 

(d)the name of the proprietor of any registered charge including, where the proprietor is a company registered under the Companies Acts, or a limited liability partnership incorporated under the Limited Liability Partnerships Act 2000, its registered number,

 

(e)an address for service of the proprietor of any registered charge in accordance with rule 198,

 

(f)restrictions under section 40 of the Act, including one entered under section 86(4) of the Act, in relation to a registered charge,

 

(g)notices under section 86(2) of the Act in relation to a registered charge, and

 

(h)such other matters affecting the registered estate or any registered charge as are required to be entered in the charges register by these rules.

 

 

 

Firstly, you will note 'registered estate'

 

Secondly, take a look at your own property documents - In relation to (d) above, who in the charges register for your property is detailed as the proprietor of the charge ? Is it you, or is it your lender ?

 

Don't worry you don't need to answer that question, as I already know it is your lender.

[bhall]

To prove my point - this is a link to an example of a title register, used by the land registry

 

https://eservices.landregistry.gov.uk/www/wps/QDMPS-Portlet/resources/example_register.pdf

 

This is the charges register

 

 

 

 

which clearly notes the lender and not the borrower as the proprietor of the charge