Need a guide for unregulated/secured credit and cca application

[Amethyst]

Re: Need a guide for unregulated/secured credit and cca application

Well I dont feel so bad getting confused in the first place now, thanks LE, and Curly.

You know when you have thought something for so long and then suddenly feel like you must have been wrong the whole time because so many people are saying the opposite. So only thing to do is get back to the basics isnt it.

Good, so now I'm happy that unregulated agreements can't be unenforceable by virtue of 127(3), shall we have a look at the fairness aspects (lol sorry)


So for unregulated agreements.......

PPI - misselling = unfair = refund of PPI / recalc of loan and refund of ppi and interest. Not a core term so agreements can stand alone if term is removed - is that right firstly ?

IF in the agreement the PPI isn't seperate at all from the main loan (ie included in amount of credit &/or charge for credit without reference like unenf regulated CCA's) then you COULD have an argument that if you remove the PPI elements the entire agreement collapses as its impossible to seperate them and could lead to the agreement being unfair under UTCCR ? (ie is that what they are arguing?) and is it the same principle applying to brokers fee/undisclosed commissions ?

[Londoneye]

Re: Need a guide for unregulated/secured credit and cca application

Looks about right to me, I wouldn't expect a full balance to be negated, a more likely result would be that the credit agreement be re-written to not include the unfair elements. One of the big CMC's Cartel I think, claim to have written a mortgage balance off! It was a very small mortgage of @£40k I think, possibly a secured loan, not sure of the details, but this may be why CMC's are showing such an interest.

[Ruby]

Re: Need a guide for unregulated/secured credit and cca application

Hi all, Just spoken to CMC challenging them with some questions. Their stance is that the lender (IGroup in my case) would have paid the broker £2500 to put business their way but to re-coup that cost they(the lender) charged me £2500 and added it onto my loan, which indeed is what happened. £2500 over 25 years - just imagine the juicy interest at 5.75 % (variable). I have written a letter to IGroup (please see my thread) however with the postal strikes I'm not holding my breath for a quick response.

[Amethyst]

Re: Need a guide for unregulated/secured credit and cca application

If you cant pay the brokers fee up front, you opt to add it to the loan and pay interest on it.

It is clearly stated on your agreement.

[zizzyfit]

Re: Need a guide for unregulated/secured credit and cca application

If brokers fees are added to the loan then it should be shown separately in a breakdown. Please read the dilemma I am currently in and feel free to comment



* 1.….I contacted Ocean Finance with the view to borrowing £35,000 and placed my full trust in Ocean Finance believing that for paying them a fee (brokers’ fees) they would in return, act and advise me and guide me in obtaining the best deal they could, and that the advice would be unbiased and fair. It was made absolutely clear to Ocean Finance and the Lender who duly received the form that this was the sum of money I wished to borrow.

2.….I then duly filled in a loan application form for £35.000.

3.…After passing their criteria checks I received a loan agreement from Blemain Finance Ltd which I duly signed.
.Because I had placed my full trust in Ocean Finance and the Lender that everything would be exactly as I had requested, I did not completely read all the terms and conditions of the agreement, one of the reasons for this was that that they were too small to read, but as I believed that other borrowers had the same agreement, and it had been scrutinised by my broker before hand if it had not been as I had applied for, I would have been advised so by the broker.
However having now magnified the terms and conditions, I am of the opinion:
There are certain terms and condition that could be realistically considered grossly unfair and that the agreement is not as it is stated to be under Consumer Statutes.

AS the loan sum is over £25000 (£35000 the sum applied for) on its own it is an unregulated unrestricted use Creditor -Debtor agreement and covered only by Common Contract law.
However
1...The total loan shown is more than what I applied for….I have been misled and misrepresentations have been made to me.
I was led to believe that the brokers fees would be taken out of the sum applied for as per Term 11
2...I was also led to believe that the acceptance fee would also be taken out of the sum I applied for as per Term 2 (a)
3... I was also led to believe that the Solicitors costs would be taken out of the sum applied for as per Term 18
4...I was also led to believe that the Title Insurance would be taken out of the sum applied for as per Term 2 (b)
It is now quite apparent that this is/was not the case.
It has been ruled by the Courts irrespective of an agreement being regulated or unregulated that Brokers fees are considered charges for credit and therefore cannot be considered as a loan nor can they be added to or included in a Total Loan Amount under any circumstances
It has been ruled that Charges for credit must either be paid before an agreement commences or at the end of an agreement, furthermore as it is a charge for credit no interest can be applied to it as in truth that is what it is NOT a loan.
Should Blemain Finance claim that it is indeed a loan in this instance, then it is considered another separate loan and would make the agreement a “Partly Regulated” agreement and should/must be stated as such at the top of the agreement, this would make the agreement a multiple agreement and the brokers fee treated as a separate loan agreement.
This would have to be shown clearly and would require its own breakdown in monthly payments and the rate of interest shown clearly having its own interest rate shown as an APR. variable and not stated as just an interest rate.

This loan would be construed as a Restricted use Creditor-Creditor-Supplier agreement falling into sections 11.1(b) and section 12(b) of the Consumer Credit Act 1974
It would also need to conform to the Consumer Credit Regulations, format of Credit agreements.
The same set of rules would apply to the Solicitors fees and the Admin fee and title indemnity insurance.

If they are claimed by Blemain Finance that they are charges for credit the agreement must state that they are indeed charges for credit…………..and it has been ruled in the Courts that Charges for credit cannot be added to the loan facility and interest cannot be charged on such charges..Wilson v First Counties Trust Ltd.
Under these circumstances I believe that my loan agreement has too many flaws in it to be rectified by a Court and is and would be declared unenforceable.

[Amethyst]

Re: Need a guide for unregulated/secured credit and cca application

Yep I completely agree in regulated agreements brokers fees are a charge for credit and shouldnt be included in total amount of credit.

What about in unregulated agreements ?

[Ruby]

Re: Need a guide for unregulated/secured credit and cca application

Surely it should make no difference whether it is regulated or unregulated in this instance. It can't be suggested that because it is unregulated companies can get away with what they want.

[Londoneye]

Re: Need a guide for unregulated/secured credit and cca application

Being an unregulated agreement doesn't mean they can get away with what they want, it just means you have to dig deeper than the CCA to establish precedent. I seriously doubt you would obtain a declaration of unenforceability, but you may well succeed in getting some/all the fees refunded.

[fallenangel]

Re: Need a guide for unregulated/secured credit and cca application

Hi

I have been reading this thread with interest - however I am a little confused.

Zizzyfit says and i quote

"It has been ruled by the Courts irrespective of an agreement being regulated or unregulated that Brokers fees are considered charges for credit and therefore cannot be considered as a loan nor can they be added to or included in a Total Loan Amount under any circumstances
It has been ruled that Charges for credit must either be paid before an agreement commences or at the end of an agreement, furthermore as it is a charge for credit no interest can be applied to it as in truth that is what it is NOT a loan."

This is my confusion:

I have a regulated loan agreement for £25000 - it is a secured loan.

A brokers fee of £600 has been added to the total loan amount BUT it doesn't appear that interest has been added on the £600 as the £600 is also included in the total charge for credit as pointed out to me on another forum.

But it has confused me immensly. Why are they able to refer to it as being the total loan amount on the Agreement ?

Zizzyfit says that "it has been ruled by the courts ..... that it cannot be added or included to the total loan amount under any circumstances"

Yet it has been included on my agreement in the other financial info box and referred to as total loan amount £25000 + £600.

I am just trying to get my head round it and find it very confusing