(Viscount Haldane, Lord Chancellor, 1913)
1. I am a British Citizen resident in the
UK who qualified as a lawyer that was admitted to practice in
New York, U.S.A. I have an LLB Laws from the London School of
Economics and a JD (Juris Doctor) from Columbia University, New
York. I practiced securities law at Sidley Austin LLP New York
office from September 2006 to December 2007 where I gained experience
working on various structured finance transactions, including
mortgage securitisations. I am also a consumer of a mortgage product
that has been securitised. Reference is made to evidence that
I submitted to the Committee in February 2009 in respect of its
Banking Crisis Inquiry.
2. This memorandum is submitted as evidence
in response to the Committee's call for forecast evidence on the
trend in mortgage repossessions over the medium term. This evidence
will discuss the Government's policy, which if implemented will
repossessions to plummet; and
3. The manifestation of the forecast repossession
reductions will predominately be achieved through the Government's
legislative proposed reform of the mortgagee's power-of-sale.
See, Ministry of Justice, Consultation Paper 55/09, Published
29 December 2009 (hereinafter referred to as the "Consultation
Paper"). Whilst this reform proposal may achieve the reduction
in repossession figures, it is a worthless achievement
when its effect is to exacerbate societal carnage from seriously
elevated levels of evictions and the consequent homelessness of
4. The Government's promulgated objective
of the reform is to protect borrowers. That is the spin. The reform
will enhance lenders powers to the detriment of borrowers. Once
enacted, lenders will have a virtually automatic and streamlined
procedure going direct from a court order for sale to a certain
eviction, which procedure will by-pass the repossession process.
5. Accordingly, repossessions will plummet
and evictions will soar.
6. This Memorandum will draw the Committee's
attention to the proposed reform as a factor designed to reduce
repossession statistics and draw attention to the real detrimental
impact on both owner-occupied mortgagors and tenants of mortgaged
landlords. Moreover, the Committee's attention should be drawn
to the strategies lenders will employ in the practical application
of such reformed legislation to their sole and absolute advantage.
Accordingly, the proposed reform and its practical effects are
discussed under the headings:
Introduction and Background.
Significant Changes in Lenders Practices.
Lenders Opportunities for Profiteering.
More Opportunities for Profiteering.
Levels of Lenders Repossessions.
7. The Government propose to enact reform
legislation in the context of residential owner-occupied borrowers,
to legislatively ensure that lenders cannot exercise its power
of sale without a court order. At first blush, assuming the Government
intends this to mean a court repossession order, this sounds desirable,
but the proposal intends to introduce the prospect of "an
order approving the sale",
ie, a sale without a repossession order.
This too may sound desirable at first blush but it is manner in
which the lenders will use this "court order for sale"
legislative reform and the lenders application of that legislative
change that is of extreme danger to all home owner mortgagors.
8. The Ministry of Justice ("MoJ")
Consultation Paper observes that the Law of Property Act 1925
section 101 provides lenders with a self-help remedy
whereby a lender, without a court order, may exercise its power
of sale. It further observes paradoxically that notwithstanding
that in practice lenders do not utilise, nor have any intention
of invoking of this self-help remedy against residential owner
occupier mortgagors; and despite no Government proposals to legislate
on the real injustices that borrowers do actually suffer and do
complain of; and despite the MoJ having no evidence whatsoever
that any residential borrower has ever suffered by the existence
of this technical self-help legal remedy;
the MoJ nonetheless, see fit to expend its finite resources on
this proposed reform.
9. Conspicuous by its absence,
the MoJ's Consultation Paper does not explore nor discuss any
reasons for the lenders apparent forbearance of its LPA section
101 self-help remedy. It would be a naivety to suggest that the
reasons for lenders' forbearance of its self-help remedy is due
to moral, ethical or altruistic tendencies. The reasons are found
in criminal and human rights law. Borrowers do not need the proposed
reform because residential owner occupier mortgagors are already
protected from their lender's forcible entry to their homes and
protected from eviction without due process of law, respectively
under, the Criminal Law Act 1977 section 6 and Protection from
Eviction Act 1977 section 1. Additionally, certain Convention
Rights under the Human Rights Act 1998
would, in the context of a residential owner-occupied mortgagor,
prevent a court from an ex post facto ratification of a lender's
sale of a home owner's property under of its power-of-sale self-help
remedy unless it had first obtained a repossession order. These
existing laws are the probable reasons that lenders do not, will
not, and indeed cannot, currently lawfully:
invoke the technically available section 101 self-help remedy
to sell a property without a repossession order.
10. The MoJ must therefore be aware that
these legal obstacles are the lenders' probable reasons for their
"apparent lack of useor indeed intention to use",
the power of sale without a repossession order in the context
of residential owner occupied mortgagors.
The Government also acknowledge that "from the lenders
perspective, the power of sale is essential".
It cannot be beyond the MoJ's comprehension that lenders would
like the force of a legislative right to sell a person's home
without a repossession order to trump the current legal obstacle
and revive the full scope of that power to include the sales of
residential owner occupiers' homes without a repossession order.
11. The MoJ asserts that the base case is
to do nothing
and the MoJ's only other stated option is to enact the proposed
reform which, they say, will merely "codify the current
declared practice of lenders not moving to sell a residential
property", and concludes that this option, "would
therefore result in no significant behaviour change in the practices
of a mortgage lender".
12. That conclusion, if truly believed is
a gross naivety and plain wrong. Lenders' practices will change
13. Following an enactment of the proposed
reform, Lenders will cease to seek repossession orders, and instead
seek orders for sale. Hence, it is readily foreseeable that repossession
statistics will plummet.
14. The Law of Property Act 1925 provides
that where the lender can show that the borrower is two months
in arrears, the court will have no alternative but to grant an
Order for Sale.
The mortgagee does not have to attend court, the borrower is statute
barred from dissent, and the court is statute barred from permitting
the borrower time to pay.
Thus: no exercise of judicial discretion; no borrower defences;
no delays from suspended possession orders; no warrants for execution;
no lender evictions; and no stay of eviction applications against
With its "order for sale" the lender will sell the family
home whilst the family are in occupation. No doubt, the court
order for sale will become the preferred course of action given
its simplicity and streamlined fait accompli. It follows
that the MoJ's conclusion that lenders current practices will
not result in significant behaviour change is an absurdity.
15. The "order for sale" reform
legislation is essential to lenders because, it is the only way
to circumvent the human rights obstacle. Government has the sovereign
right to regulate property rights and to make laws on the proportionate
control on the use of property.
That must be done through legislation. Consequently, the order
for sale legislative reform, will, on exercise of the State's
right to control the use of property, legislatively overcome borrowers
Convention rights under Articles 6, 8, and Article 1 to the First
Protocol. Moreover, the legislative reform would guarantee that
such sales fell within the ECHR's "principle of lawfulness"
jurisprudence. Hence, the proposed reform is essential for lenders
to clear these real legal obstacles.
16. The "order for sale" will
be a virtual rubber stamp procedure. Far too easy for lenders
and no real opportunity for the borrower to protect his home and
family. Borrowers do not need this reform. Lenders want this reform.
17. Therefore, a mortgagor's home may be
sold irrespective that his/her family remains in occupation of
the property. This naturally means that the property will be sold
at a fire-sale valuation price
but worse, at a fire-sale without vacant possession valuation.
The LPA section 101(i) provides that the lender may sell, auction,
and "buy in", without being answerable to the borrower
for any losses incurred in the exercise of its power.
Hence, in like manner by which lenders' designed-in the borrowers
default into the packaging and securitisation of their mortgages,
substantial mortgage shortfalls are designed-in to the lenders'
exercise of its power-of-sale under a court order for sale of
their physical home. In a sale on a "without vacant possession"
valuation, the lender and its purchaser will in effect, lawfully
appropriate the borrowers' equity in the property.
18. Once the lender has exercised its power-of-sale
under a court order for sale, the homeowner will be rendered a
trespasser in his own home. As a trespasser, a court ordered eviction
will be another simple mere formality for the purchaser.
The profit returns for the purchaser will be considerable. It
will buy at a "without vacant possession" valuation
with a virtual guarantee of vacant possession once the purchaser
secures a certain eviction order on the grounds of trespass. Additionally,
the purchaser could demand accruing occupation rent whilst at
the same time the mortgagee is demanding its accruing compound
interest. A double pecuniary punishment for homeowners.
19. If you are caused to ponder how these
properties may be sold without vacant possession, lenders have
the next financial innovation lined up once this legislative coup
is secured. It will come in the form of Special Purpose Vehicle
property companies, analogous to the SPV securitisation companies.
It will be a two step sale to "wash" the appropriated
borrowers' equity in the first step, and a second step "wash"
to ensure the purchaser seeking eviction will qualify for the
legal status of a bona fide purchaser for valuable consideration
Between these two sales, the mortgagor's equity will be extinguished,
the mortgagor only being credited with the lesser amount of the
20. That is the modus operandi of lenders
as is evident from past record in their securitisation structures
and from evidence in the structure employed in the Horsham
a case that heralds a firm example of things to come. In the Horsham
case, GMAC RFC Limited appointed a receiver,
who in turn sold the mortgagor's residential occupied home to
Costal Estates Limited. Costal was a special purpose vehicle that
for the purposes of the first step sale.
Costal executed the second-step sale to Horsham
on the same day it acquired the property from the receiver.
Horsham then brought claim against the home owner mortgagors for
eviction as trespassers on the grounds that their rights in the
property were overreached by the receiver's sale to Costal. The
court held in favour of the purchaser. Following the High Court's
determination of the Horsham case in October 2008, both Horsham
and Coastal, having served their special purpose, were dissolved
on 12 May 2009.
21. The precedent is set. All that remains
is for the lenders to clear the legal hurdles that currently prevent
employment of this strategy in the context of residential owner-occupied
homes. The proposed reform legislation achieves that aim.
22. Consequently, it is foreseeable that
lenders' practices will change significantly following the enactment
of the proposed reform in preference for an order for sale. Homes
will no longer be marketed on the open market, but will be washed
through an "auction" and the profit enhancing two-step
SPV property companies. Lenders will realise its security through
an order for sale followed with an eviction by the purchaser.
Hence, evictions will soar.
23. Having sold the property at under value,
deprived the mortgagor of his equity and created a contrived shortfall,
the lender will still have, yet more value out of the process.
It now holds a debt that would be larger than would otherwise
have been the case if the borrower had not been deprived of its
24. Moreover, the lender will systematically
inflate the shortfall adding unreasonable and excessive costs,
fees and expenses at any level it desires (as is their current
The lender may then package these inflated contractual shortfalls
and sell them on to a debt collection company. The proceeds from
this sale, even if sold at a discount, may, taking into account
the inflated alleged shortfall, be enough to render the lender
more than satisfied on its original debt and even with profits
to the lender in excess of the mortgage amount due. Thereafter
the borrower will be forever at the mercy of the debt collectors
demanding the lender's contrived and inflated alleged shortfall.
25. The Committee has received written evidence
from sources which criticise the Council of Mortgage Lenders'
understatements and manipulation of repossession statistics.
The Committee's attention is drawn to the tables below and the
CML estimated that the number of properties
in 2008 "taken into possession
would be 45,000". The CML then submitted
that the actual number was 5,000 less, ie 40,000 properties taken
Compare that CML testimony with the MoJ's actual figures evidencing
that 77,001 properties were taken into possession by mortgage
lenders in 2008.
Note also that there were a further 67,925
properties taken into possession by landlords. These figures include
the eviction of ex-mortgagors, who under threat of repossession
by the lender, had succumbed to the sale and rent back sector.
It also includes tenants whose landlords were repossessed under
a Buy-to-Let mortgage.
The CML testified to the Committee that
they had lowered their original estimation of 75,000 repossessions
for 2009 to £65,000.
Compare that CML testimony with the MOJ's statistics for 2009.
They show that lenders were granted a total of 102,086 suspended
and immediate possession orders. During 2009 mortgage lenders
were granted a total of 88,863 warrants for enforcement and 64,485
were granted to landlords, an aggregate total of 153,348 evictions.
MORTGAGE REPOSSESSION ACTIONS
NUMBER OF WARRANTS ISSUED FOR THE REPOSSESSION OF A PROPERTY
26. It is respectfully averred that the Committee, were
unfortunately, seriously misdirected by CML when it relied on
the veracity of CML's statistics in its Fifteenth Report of the
2008-09 Session, under the heading "The picture today: repossessions".
27. It is clear from the issuance of warrants statistics
that the levels of homelessness has increased and will continue
to increase irrespective of whether the proposed reform is enacted.
28. And, in the event that the proposed reform is enacted,
the issuance of enforcement warrants statistics will achieve catastrophic
levels albeit that the statistics will be unattributed to mortgagee
evictions given that the evictions will be effected by the lender's
purchaser. Nonetheless, the evictions will still, in reality be,
because of the lender.
29. Every institution of State
has systematically failed to protect the borrowing public in any
meaningful way. Whilst borrowers have a right to be heard in court,
in reality, because they predominately appear before the court
as litigants-in-person, they are often viewed by the judiciary
as a tiresome inconvenience
and consequently judges often do not listen and engage in the
substance of their points. This empirical fact is borne out by
the fact that the MoJ have been unable to identify even one single
example of a case where a borrower's defence in a repossession
case has prevailed over the lender.
The courts are no longer on the alert for injustices perpetrated
by the lenders for want of conscience as they did in Viscount
In today's justice system, the absolute failure of all mortgagor
defences is equivalent to a judicial guarantee that the lender
will be granted its repossession order in all events. That track
record is a harbinger that forewarns the judicial spontaneous
reaction to a lender's application for an order for salegranted.
30. Despite the shortcomings of the present repossession
procedure from the borrower's perspective, it does at least afford
a mortgagor a scintilla of an opportunity to resist the repossession.
By contrast, to enable the lenders to avail themselves of a reformed
and streamlined "order for sale" and eviction as trespassers,
circumvents all the borrowers rights and defences to add further
injustice on top of the already limited access to justice afforded
31. Consequently, in the event that the banking lobby
and their client lenders succeed in their endeavours to see this
reform enacted, the lenders and politicians may revel in their
public relations coup for the plummeting repossession figures
whilst the public will suffer the soaring evictions of families
from their homes.
32. The Committee is invited to consider the following
Not to rely on CML statistics.
Rely on independent statistics from the Ministry of
Justice or another credible independent source.
Make a recommendation to the Ministry of Justice that
it review and report on the current levels of judicial enforcement
of consumer protection law in actions against mortgagors, with
particular reference to:
the enforcement of the Unfair Terms in Consumer Contracts
Regulations SI 1999/2083;
the extent to which the judiciary continue to enforce
unfair charges and fees against borrowers
despite the FSA having held the charges unfair and contrary to
the MCOB rules; and
reforms by which, there is an effective and real deterrence
from lenders' breaches of law and MCOB regulations, including:
full disgorgement of all profits arising from such breaches; real
punitive fines and effective deterrence through personal liability
Make a recommendation to Government to reject its
For your convenience and ease of reference, appended hereto
(1) Ministry of Justice Consultation Paper 55/09.
(2) Horsham Properties Group Ltd v Clark EWCA  2327
(3) House of Commons Treasury Committee Fifteenth Report on
the 2008-09 Session.
Viscount Haldane, Lord Chancellor, House of Lords 1913 Kreglinger
v New Patagonia Meat Company Limited  UKHL 1. Back
It is recognised however that there is "worth" in the
reduced repossession figures when viewed in isolation of any other
indicators. Viewed in isolation, its "worth" is limited
to the public relations coup for lenders and politicians. Back
Ministry of Justice, Consultation Paper 55/09, Published, 29 December
2009 at page 6, para 1. Back
Id at page 9 para 16 "It is envisaged that where it is
not possible to reach agreement with the borrower either an order
for possession or an order for sale would be needed. There
would not be a requirement for both." (Emphasis in original).
See also page 14 para 40 "It is not necessary for a lender
to take possession of the property before exercising the power
of sale, because the sale may be with or without vacant possession." Back
See below under headings "Significant Changes in Lender Practices"
and Opportunities for Lender Profiteering. Back
Ministry of Justice, Consultation Paper 55/09, Published 29 December
2009 at pages 12 to 13, paras 30 to 36. Back
Id at page 19, para 70. Back
Id at page 18, para 65 "the practice was never used in
residential owner-occupier situations". Back
Id at page 8 para. 14, following an MoJ's inter-department review
after the Buy-to-Let Horsham case, a case concerning a commercial
mortgagor, the MoJ report recommended that: "no immediate
legislation was necessary in relation to lender's powers";
see also page 19, para 70. Back
Save that, the Consultation Paper has made one reference to the
borrowers' existing protective legislation buried in a footnote.
See, page 15 footnote number 7. Back
For example: Article 6, "In the determinationof his civil
rights and obligations ... everyone is entitled to a fair and
public hearing"; Article 8 "right to respect
for his private andfamily life, his home and correspondence";
and Article 1 to the First Protocol "Every natural ...
person is entitled to thepeaceful enjoyment of his possessions
... except subject to conditions provided by law." In
light of these minimum standards, a court could not ratify by
court order, a lender's exercise of its self-help remedyafter
the lender's sale, on the grounds that: a court cannot act in
violation of Convention Rights. The court's inability to ratify
the sale of an owner-occupied residential mortgagor's home by
operation of these convention rights, has effectively rendered
the mortgagee's self-help remedy an anachronism. Back
Consider also EU Directive 93/13 and the Unfair Terms in Consumer
Contracts Regulations S.I. 1999/2083. All borrowers are subjected
to standard form mortgage contract provisions and most of the
lender injustices are perpetrated through these standard provisions.
If the courts faithfully applied the rule of law, many of these
standard terms would be struck down as unfair pursuant to Article
5 as causing a "significant imbalance in the parties'
rights and obligations under the contract, to the detriment of
the consumer"; and consequently, void and unenforceable
against the borrower. Back
Ministry of Justice,Consultation Paper 55/09 page 19 at para 70. Back
See eg, Consultation Paper 55/09, MoJ's Evidence Base, page 40
at para 21 "Information from lending industry stakeholders,
obtained in preparing the review ordered by the Justice Secretary,
indicates that this practice [the self-help remedy] wasnever used
in residential owner occupier situations ... " (Emphasis
Id, page 19 para 71. Back
Id at page 22 para 81: The MoJ acknowledge that the HRA 1998 obstructs
the lender power. A Government's exercise of its legitimate right
to control the use of property through legislation is therefore
essential to lenders in order to overcome this human rights obstacle.
Thus, the proposed reform would circumvent both the human rights
obstacle and the criminal statutes to fully restore the lender
power to its original 1925 extent. It is the lenders that need
and want this proposed reform not the borrowers. Back
Id at page 41 para 25. Back
Id at page 41 para 26. Back
See Law of Property Act section 103 generally and 103(ii). See
also Consultation report at page 37 para 4. Back
See footnote below. Back
See Law of Property Act section 91(2) the court may order the
sale irrespective that the mortgagee does not appear; irrespective
of whether another person (such as the mortgagor) dissents; and
without allowing the mortgagor any time for payment of the money. Back
See HRA 1998 Article 8 "Everyone has the right to respect
for his private andfamily life, his home ... There shall be
no interference by a public authority with exercise of this right
except such as is in accordance with the law".
(Emphasis added). See also eg, Consultation Paper 55/09 page 25
para 99. Back
See House of Commons Treasury Committee Fifteenth Report of the
2008-09 Session, page 28 at para 68, where the Committee accepted
evidence from Shelter that the current practice of lenders was
to sell mortgaged properties typically at 15-20% below market
value and sometimes up to 40% below value. Back
Id. Ev 45. Written evidence of Mr and Mrs Peffer at para 9: "it
has been proved three levels of valuations exist ie private sale,
re-mortgage and repossession." A fourth valuation level
can be added viz: repossession without vacant possession. Back
See Law of Property Act 1925 section 106(3) and section 109(2). Back
Following the Banking Crisis, the SPV securitisation companies
all have a firm policy to wind-down ie, liquidate their assets,
as expressly stated in the majority of the SPV securitisation
company's directors' reports and accounts filed at Companies House.
The SPV's assets are the mortgages and their ultimate assets are
the borrowers' homes. Consequently, it is the borrower's home
that must be liquidated. Thus it was necessary for the SPVs to
contrive the borrower's default through excessive fees and interest
rates overcharges. The credit crunch has highlighted the slowness
of the current liquidation process (as perceived from the SPVs
perspective) and consequently, the order-for-sale process would
streamline and accelerate the SPVs liquidation policies. Borrowers'
homes could be packaged en-masse and sold to SPV property companies.
The real problem is not borrowers. The problem is that SPV securitisation
companies have no intention to honour their contractual obligation
to lend for the 25-year term. SPVs will liquidate their "assets"
(ultimately the borrower's home) within five to seven years, either
through the borrower's re-mortgage (not an option during a credit
crunch) or through repossession. Thus, the order for sale proposed
reform would enable the wholesale packaging of homeowners' properties
to speed up the securitisation company's liquidation process to
the benefit and advantage of mortgagees. Back
See footnote 89 above. The lender's appropriation of the borrower's
equity is already standard practice. However, as Shelter has already
observed, the currently, "sometimes" sales of properties
at 40% (or more) below market value would in future, become the
See Horsham Properties Group v Clark EWHC  2327 (Ch), as
per Mr Justice Briggs at para 37 "Furthermore, the case
that section 101 engages A1FP gains nothing from the undoubted
fact that the exercise by a mortgagee of a power of sale under
section 101, without first obtaining possession [or post reform,
an order for sale], will probably be a necessary and sufficient
preliminary to the easy obtaining of possession by the purchaser,
who will after the sale properly be able to characterise the mortgagor,
if still in possession, as a trespasser." (Emphasis
See LPA 1925 section 104(2) which provides that a purchaser is
not concerned to enquire of the lender's authority to sell and
that the mortgagor cannot impeach the purchaser's title on the
grounds that no case had arisen to authorise the sale or that
no notice was served on the mortgagor. Back
Horsham Properties Group Ltd v Clark EWCA  2327 (Ch). Back
See LPA 1925 section 109. Mortgagee's have a statutory right to
appoint a receiver and the receiver is, in substance, given statutory
immunity for any losses that the receiver may cause the mortgagor,
see eg section 109(2). In addition, the standard form terms and
conditions provide the lenders the contractual right to appoint
a receiver. Back
Costal Estates Limited was incorporated on 17 October 2006: Source
Companies House WebCheck http://wck2.companieshouse.gov.uk/290f1bf5b120b10730e4af2cd88436c6/compdetails Back
Costal apparently never traded and never filed accounts during
its short existence notwithstanding that it obviously did trade
in the purchase and sale of the property at issue. Moreover, Costal
Estates Limited was not a legal entity on the date it purported
to enter into contracts of sale. Both Coastal's purchase from
the GMAC appointed receiver and Coastal's sale to Horsham were
completed on 28 September 2006, ie, prior to the date that Costal
Estates Limited existed at law and on a date where Costal had
no lawful capacity to contract in any event. Accordingly, both
contracts were as a matter of law, void. Back
It is noteworthy that whilst the case was brought in the name
of Horsham Properties Group Limited there is no record
of such company at Companies House. If that is correct, such company
had no lawful right to bring any claim against anyone. It is therefore
assumed that Horsham's claim should have been brought in the name
of Horsham Properties Limited (Co Reg No 04079262). Back
ie 28 September 2006 see Horsham case at paras 4 and 5. Back
Source Companies House WebCheck: Costal Estates Limited (Co. Reg.
No.05969493) dissolved 12/05/2009 http://wck2.companieshouse.gov.uk/290f1bf5b120b10730e4af2cd88436c6/compdetails;
and Horsham Properties Limited (Co. Reg. No. 04079262) dissolved
12/05/2009 http://wck2.companieshouse.gov.uk/bba1bb34af88c0cff554f3e75b9ef1e4/compdetails. Back
Senior Costs Judge, Peter Hurst in his November 2003 update of
his Review of the Law of Costs in England and Wales. He said:
"thecosts payable by a borrower to a mortgage lender had
been giving rise to concern from the judiciary who have to deal
with debt collection and repossession cases ... Recent experience
shows that mortgage lenders are becoming far more aggressive in
their repossession claims, demanding possession in respect of
debtors who have been prompt payers for many years but who then
slip briefly into arrear.The lender is able to add a figure for
costs to the mortgage debt which the debtor (having agreed to
do so in the original deed) has no option but to pay. The amounts
added to mortgage debt in this way are frequently out of all proportion
to what is reasonable. In many cases the courts are effectively
powerless to intervene." (Emphasis added) Quoted from:
Cook on Costs 2007 at page 500. Back
House of Commons Treasury Committee, Fifteenth Report of Session
2008-09: see, Ev 94, written evidence of Mr Fulcher at para 2;
and Ev 114, written evidence of Home Saver at para 4.4. Back
Note the use of the CML's phrase "taken into possession"
as distinguished from the number of repossession orders granted
to lender they have not yet sought to enforce. From anecdotal
evidence of persons working within a lending organisation, it
is apparently, common practice for lenders to stock-pile their
repossession orders and seek enforcement when the housing market
revives ie, when the lenders re-commence lending. Back
See, House of Commons Treasury Committee, Mortgage Arrears and
Access to Mortgage Finance, Written Evidence: Council Of Mortgage
Lenders written evidence at page 55 para 10. Back
This is evidenced by the number of warrants granted to mortgage
lenders for enforcement of their repossession orders. The court
bailiff sets an eviction date following the lender's grant of
the warrant. The family is sent an Eviction Notice and evicted
on the court bailiff's appointed date, whereupon, the mortgage
lender "takes possession". Back
See, House of Commons Treasury Committee, Mortgage Arrears and
Access to Mortgage Finance, Written Evidence: Council Of Mortgage
Lenders written evidence at page 28 paras 64 to 69. Back
Id at page 55 para 11. Back
Source: Ministry of Justice. Back
Source: Ministry of Justice, HMCS Caseman system, Possession Claim
House of Commons Treasury Committee, Fifteenth Report of Session
2008-09: Mortgage arrears and access to mortgage finance at page
Including without limitation: the Government, FSA, FOS, OFT and
the law courts. Back
Lord Woolf observed in his June 1995 Interim Report on Access
to Justice "All too often the litigant in person is regarded
as a problem for judges and for the court system rather than a
person for whom the system of civil justice exists".
Nothing has changed since 1995. Back
Following enquiries of the Ministry of Justice, they have been
unable to identify even one example of a mortgagor defendant's
defence prevailing over a mortgagee claimant's claim. A fortiori,
the borrower defendant never defeats its mortgagee's repossession
claim. The correspondence and statistical information received
from the MoJ, can be made available to the Committee if requested. Back
See footnote 67 above and the quote at the top of this memorandum. Back
It is submitted that the currently the courts do not order mortgage
lenders to credit back the unfair charges (which often run into
thousands) and the borrower is forced to pay the unlawful unfair
charges with compounding interest, such charges being subsumed
into the judgment and order. Back