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Secured loans and Acenden
The Acenden Action site has been closed down but had in just two years over 100000 hits. The site was supporting a large number of people to resist attempts at repossession by Acenden a DCA acting on behalf of a range of former Lehman companies such as Southern Pacific Personal Loans, Southern Pacific Mortgage, Preferred and London (or London Matlock) and others. All loans and mortgages are defined as non-conforming ie sub-prime although when they were offered for sale by the brokers they did not necessarily make this clear and not everyone had bad credit histories. In 2005 to 2007 there were a lot of so-called "independent" financial advisors who in reality offered only Lehman loans.
Unbeknowst to borrowers two things happened once they had signed the loan documents a) the debt was immediately placed with a DCA called Capstone (later Acenden) and b) it was sold to a special purpose vehicle or SPV, who did not register the sale with the Land Registry. Charitable trusts were set up by the new owners of the debt with the Bank of New York Corporate Trustee Services.
The unfortunate borrower thought they had a loan or mortgage but it never existed, it was a mortgage backed security. The customers of the SPV are the investors not the borrowers.
The job of the DCA was then to get the account into default. Of course, sometimes people were late paying or fell on hard times and fluffed some payments. This then triggered a barrage of excessive charges including a litigation fee of £115 which would be applied for every month the account was in arrears. Acenden had a rule that the property had to be insured by them if the borrower did not produce a copy of their house insurance and charged £50 to cancel theirs. Many people fell foul of this because they did not realise they were paying for two insurances.
Then applications for repossession. Usually they settled for a SPO and then pounced later. Even an adjourned application if you managed to beat them off before court, cost between £400 - £650 and a couple of those a year would really bounce up the charges.
Because all loans/mortgages were really MBS's the DCA would not entertain capitalisation of arrears or an extension to terms.
so what does this mean in reality? Well we got into a pickle when illness meant we could not make three payments. The first attempt at repossession occurred during the period when we were claiming on PPI, the second whilst the payments were being made by their insurers. The third attempt was when we were three weeks late paying. Although we speedily made up the payment we were still taken to court three months later. The costs of three adjourned court actions total £1700.
According to the Acenden Action site our experience is typical and many lose their homes. If they do properties are marketed at a 60% discount as they have to be sold within 90 days. Fees have reportedly been as high as £40000 on top of the loss in equity.
so what are the issues
1. Securitisation including the misselling, the registration gap, the creation of a MBS from a loan without the knowledge or consent of the borrower is a dead duck. It appears legal and if it isn't no-one will challenge the legality.
2. The first charge issues concern the FSA who have been worse than toothless. The second charge issues are in the province of the OFT -which is where I think you guys might have some useful insights as the agreements are CCA 1974 even though they are secured loans.
3. Unenforceability is not possible. The documentation is robust, bearing in mind these guys expect to take the borrower to court.
4. The CCA 1974 issues are:
a) does the SPV the owner on paper of the charge need a CCL? Eurosail INC let theirs lapse in March this year. CAG advice is that they don't need one as long as the DCA has one.
b) Terms and conditions have a tarif of charges, all excessive and unfair. There is no clause that says they have the right to vary them. But they have three times over. The FSO reportedly has ruled that their charges are "fair" though they are higher than Swift, Kensington, Deutsche Bank, Gmac all of whom were fined for having charges that do not reflect the true cost of any enforcement action. The FSO have completely failed to address a complaint from me about the variation of the tarif of fees (I did not make a complaint they were unfair)
c) The OFT guidelines apply on Unfair Practice. Amongst other things a company should take into account illness of the borrower when considering enforcement, apply for repossession only when all attempts to reach a negotiated agreement have failed, repossess only when it is in the interests of the borrower, gives consideration to an extension of the term of the mortgage or other variation which would help the borrower. They are prohibited for applying for possession when there is a dispute about the level of charges and so on.... Acenden say quite openly they do not have to pay any heed to the OFT .... and the FSO have ignored a complaint from me on this point.
The point I am at is that I have had a final letter from FSO which I have challenged. I haven't been successful on the issue of legal fees as the FSO say they can go to court if there are arrears without taking into account that the unfair charges he has insisted they remove would have meant there were no arrears. The FSO won't tell me if the company needs a CCL, nor will it agree that the OFT guidelines apply. We are currently in an arrangement to pay back the legal fees.
I really would like someone to take a squint at my terms and conditions and tell me where and how it says they can charge what they like.
Unbeknowst to borrowers two things happened once they had signed the loan documents a) the debt was immediately placed with a DCA called Capstone (later Acenden) and b) it was sold to a special purpose vehicle or SPV, who did not register the sale with the Land Registry. Charitable trusts were set up by the new owners of the debt with the Bank of New York Corporate Trustee Services.
The unfortunate borrower thought they had a loan or mortgage but it never existed, it was a mortgage backed security. The customers of the SPV are the investors not the borrowers.
The job of the DCA was then to get the account into default. Of course, sometimes people were late paying or fell on hard times and fluffed some payments. This then triggered a barrage of excessive charges including a litigation fee of £115 which would be applied for every month the account was in arrears. Acenden had a rule that the property had to be insured by them if the borrower did not produce a copy of their house insurance and charged £50 to cancel theirs. Many people fell foul of this because they did not realise they were paying for two insurances.
Then applications for repossession. Usually they settled for a SPO and then pounced later. Even an adjourned application if you managed to beat them off before court, cost between £400 - £650 and a couple of those a year would really bounce up the charges.
Because all loans/mortgages were really MBS's the DCA would not entertain capitalisation of arrears or an extension to terms.
so what does this mean in reality? Well we got into a pickle when illness meant we could not make three payments. The first attempt at repossession occurred during the period when we were claiming on PPI, the second whilst the payments were being made by their insurers. The third attempt was when we were three weeks late paying. Although we speedily made up the payment we were still taken to court three months later. The costs of three adjourned court actions total £1700.
According to the Acenden Action site our experience is typical and many lose their homes. If they do properties are marketed at a 60% discount as they have to be sold within 90 days. Fees have reportedly been as high as £40000 on top of the loss in equity.
so what are the issues
1. Securitisation including the misselling, the registration gap, the creation of a MBS from a loan without the knowledge or consent of the borrower is a dead duck. It appears legal and if it isn't no-one will challenge the legality.
2. The first charge issues concern the FSA who have been worse than toothless. The second charge issues are in the province of the OFT -which is where I think you guys might have some useful insights as the agreements are CCA 1974 even though they are secured loans.
3. Unenforceability is not possible. The documentation is robust, bearing in mind these guys expect to take the borrower to court.
4. The CCA 1974 issues are:
a) does the SPV the owner on paper of the charge need a CCL? Eurosail INC let theirs lapse in March this year. CAG advice is that they don't need one as long as the DCA has one.
b) Terms and conditions have a tarif of charges, all excessive and unfair. There is no clause that says they have the right to vary them. But they have three times over. The FSO reportedly has ruled that their charges are "fair" though they are higher than Swift, Kensington, Deutsche Bank, Gmac all of whom were fined for having charges that do not reflect the true cost of any enforcement action. The FSO have completely failed to address a complaint from me about the variation of the tarif of fees (I did not make a complaint they were unfair)
c) The OFT guidelines apply on Unfair Practice. Amongst other things a company should take into account illness of the borrower when considering enforcement, apply for repossession only when all attempts to reach a negotiated agreement have failed, repossess only when it is in the interests of the borrower, gives consideration to an extension of the term of the mortgage or other variation which would help the borrower. They are prohibited for applying for possession when there is a dispute about the level of charges and so on.... Acenden say quite openly they do not have to pay any heed to the OFT .... and the FSO have ignored a complaint from me on this point.
The point I am at is that I have had a final letter from FSO which I have challenged. I haven't been successful on the issue of legal fees as the FSO say they can go to court if there are arrears without taking into account that the unfair charges he has insisted they remove would have meant there were no arrears. The FSO won't tell me if the company needs a CCL, nor will it agree that the OFT guidelines apply. We are currently in an arrangement to pay back the legal fees.
I really would like someone to take a squint at my terms and conditions and tell me where and how it says they can charge what they like.
Did the Acenden Action website seek collective legal advice on these mortgage products or was it more of a group hug for victims of possible unlawful repossessions 
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