Bank of England Reduces Interest Rate But Will Sub Prime Lenders?

Let’s hope that the BoE reduction of one quarter of a percent interest rate will actually filter down to those who need it most?

Prime lenders like Halifax have already passed it on to their customers, but for those customers of sub prime lenders like Capstone, GE Money, Kensington, and the like, the results are unlikely to be so fast, and in some cases, not be a result at all.

Repossession House Keys

This is because many sub prime lenders are now actually bad risks themselves on the inter bank money markets where the interest rate is not set by the Bank of England and therefore reductions count little.

The irony is that the biggest repossessers are now themselves considered to have bad credit ratings. Poetic justice it may be, but they still have the power to charge some incredibly high rates and penalties which should see them in business for a long time to come.

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.