UK Land Registry Used by Sub Prime Lenders For Sham Claims

 We’ve recently been working on a problematic case to help a Ms L to be able to sell her property in order to pay off her 2 secured creditors, her mortgage and her secured loan.

At the point of exchanging contracts with her buyer, Ms L’s conveyancing solicitors discovered that there was a third charge against the property for approx £40,000. This charge was from Welcome Finance.

Ms L said she was unaware of any secured debts owed to Welcome Finance.

We stepped in to help her unravel the mystery, and this is where we discovered that sub prime lenders are abusing the Land Registry rules under Section 36 LRA 2002 regarding so called Unilateral Notices.

A standard charge against a property is registered by any mortgage lender or other secured lender at the time that the loan is taken out and with full knowledge of the borrower.

However, a Unilateral Notice also acts like a charge on the title of the property, the owner being unable to sell their interest in the property without satisfying the Unilateral Notice. Fair enough?

Well, actually, no. That is because anyone can apply for a Unilateral Notice to be placed on someone’s property without any proof whatsoever of the registered debt is either real, legal, or enforceable.

In the case of Ms L, we had a sympathetic judge some weeks ago who allowed us the maximum 56 days on a suspended possession order so that we could apply to the Land Registry to get this notice removed.

A simple form UN4 was submitted to the Land Registry free of charge (so it should be!), to request the removal of the Notice after which the beneficiary of the Unilateral Charge (in this case Welcome Finance) was given 15 days to respond to the LR with proof of a legitimate claim.

Incredibly, Welcome Finance did not have to prove that they had a legitimate claim before placing the Unilateral Notice on the Land Registry.

On day 15 at the eleventh hour, Welcome Finance responded to the LR with an ‘objection’ to the removal of the notice.

Beyond the simple words ‘we object’ Welcome Finance were unable to provide proof of any enforceable debt, any signed credit agreements, or anything else.

Concurrent to this process, Ms L had served Welcome Finance with letters quoting her statutory right (enclosing two £1 postal orders) to be sent true and exact copies of the two signed original credit agreements that Welcome Finance had referred to in previous correspondence to her directly.

They failed to provide any evidence.

Failure to do this within 12 days is a breach of the Consumer Credit Act 1974 (Sections 77−79) and failure to do so within a further 30 days is a criminal act.
Now Ms L is fighting a losing battle with time running out.

Despite the County Court Judge having suspended the possession order for 56 days, the first and second charge lenders GE Money, and London Scottish respectively, have both been harrassing Ms L for payment of arrears, despite being informed by her solicitor that the order for possession has been suspended, and the reasons why.

Now the Land Registry are saying that because Welcome Finance have objected, despite them having never produced any evidence as to the validity of their claim, that the matter must go to ajudication.

This will mean that although Ms L will ultimately win (after all if Welcome Finance did have any proof or paperwork to back up their claims of debt, they would have provided it by now), that her first and second charge lenders are piling on huge penalties and legal fees for arrears, whilst she fights a notice against HER property by a company that did not have to prove its case before the Land Registry accepted the charge, and still have yet to prove that money is legitimately owed to them.

To make matters worse, during this period Welcome Finance have even contacted Ms L, by phone, to try to sell her a (unsecured) loan.

It is extremely likely that this delayed action and the naive actions of the Government’s Land Registry in allowing anyone to register a charge without proof, will mean the loss of her buyer (the purchase price does not and cannot include the spurious £40k) and almost certainly the loss of her home.

3 Responses

  1. […] UK Land Registry Used by Sub Prime Lenders For Sham Claims […]

  2. Unknown to me my husbands former wife had a case against him for ancillary relief. I had put down the deposit for our home £155,000. We had some financial problems and I went to remortgage and found this charge on the property, I could not appeal it as the charge was against my husband I am about to loose my home and every thing now!!

  3. I have read the above blog and i must say i am not surprise as i found out the Welcome Finance did the same thing to me and i only found out through Nationwide in 2004.
    Welcome Finance denied the charge being there. I had to pay £10 for a copy from the Land Registry in leicester.

    The problem i have is that i have paid the 1999 secured loan that this charge relates to.But the charge is still with the Land Registry. I took out a unsecured loan in 2001 to pay the secured loan off.

    I have the Loan Agreement that has not been signed because it said secure loan on the paper work . My wife and I said to the advisor it’s an unsecured loan we have asked for and she said you can take these with you and I will post thAgreement to you which never came in the post.

    Citizen Advise Bereau spoke to Welcome Finance asking for my monthy payments to be reduced but Welcome wanted me to sign out a new loan. The advisor called Trading standards to complain only to be told that this company is known to them and that thier was a loop hole in the trading act so companies like welcome finance will continue to expliot it.

    I have requested a copy of my loan agreement as requested by Milton keynes Citizen Advise Bureau and i have been told to go to the county court to have the charge removed.

    Guess what ? I went to the local county court and the clerk or receptionist said she did not know what form I needed.

    I gave up in the end after spending 8 hours trying to sought what forms I needed to have a charge removed that should not be on my property in the first place.

    I cannot remorgage due to this ilegal charge by Welcome Finance who i haven’t paid anything payments to since 2006.

    Your help is needed please.

    with thanks,

    Peter Hospidales

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