Does s140 CCA apply to mortgages?

[patrickq1]

Re: Does s140 CCA apply to mortgages?

Animal:

Surely most mortgages taken out prior to the changes in FSA regulation wouldn't be CCA regulated by virtue of the fact that they would be over the financial limit for regulation?

Patrick:

Be careful, they may try and recover their monies from the proceeds of the house sale.

they have had 20 years and were instructed to begin their legal action which they did,but it got complicated when they had to admit to libel,which they did in the local papers and tried to apoligise but they did not apoligise to me they informed the newspaper they had apoligised I aint seen one yet ,also they were in breach of contract and terminated the agreement six weeks before its time,they also rung suppliers in spain italy and germany warning these companies i was financially unsound ?,every dirty trick in the book came out because it became personal from the bank managers point of view as he was one of my customers and tried to get out of paying and used me to get his own discounts or say freebies and when i would nt have that it turned nasty ....their is a lot to this more than i could put on here anyway i digress from the origional thread...but i fear not they can try but i will see it in court first as i have every scrap of paper in my files even the skeleton fax lol
patrickq
------------------------------- merged -------------------------------
ps my agreement is hear in front of me and it states regulated by the cca act, it was only for twenty thou but he let it run to 25 000 ,i paid in 12500 in one week told him i would see him in court fro the rest ,they dropped the case in 1992..have nt heard a peep since

[Animal]

Re: Does s140 CCA apply to mortgages?

It's not retrospective though, is it? So by then first mortgages would have been regulated by the FSA and would have to adhere to the rules set within MCOB rules ??

S140A is partially retrospective. Any unfairness that manifests after the act becomes law can be challenged AFAIK. The law that made mortgages regulated is a different act and is not retrospective and nothing to do with CCA.

If you look at s16 CCA, this defines exemptions such as mortgages. The 2006 amendment removed the 25k limit and added s16 7A which removes s16 for the purposes of s140A. S140A 5 reintroduces the exemption for FSA regulated mortgages.

Bentley vs Blemain is the only case that I am aware of that is based on a mortgage and his loan was taken out prior to s140A becoming law. Obviously out of court settlement, so cannot be used as a precedent.

I should add that this is my current understanding, so if you know or think different, then please feel free to add your argument with references :-)

[banker_rhymes_with]

Re: Does s140 CCA apply to mortgages?

Hello Folks!

I think the key with Peter Bentley was the Mortgage in question was a Second Charge Mortgage, not a First Charge Mortgage, so it was covered by the Consumer Credit Act 1974/2006 and not by the FSA/FSMA.

This is the FSMA:

Financial Services and Markets Act 2000

Just to clarify, a First Charge Mortgage being effectively the first charge on the Deeds, and the one that gets paid first when they come for your Assets. A Second Charge Mortgage is just one that comes after a First on the Title Deeds, so is second in the queue when they divide up the plundered spoils that was once your home.

To further clarify, if you have a First Charge Mortgage, and you re-Mortgage for, say, more money or a better rate, if the new Mortgage replaces the old, then it's also a First Charge Mortgage. All that happens is one is deleted and replaced by the other on your Title Deeds. The later Mortgage is not, in that case, a Second Charge Mortgage, it's just another First Charge Mortgage.

Thus, a Second Charge Mortgage is one added when a First Charge Mortgage is already there on your Title Deeds.

It has nothing to do with when Mortgages were arranged, which is perhaps what confuses people. It is solely concerned with the order of the Security in terms of which one gets paid first.

When someone says they took out their first Mortgage in 1992, their second in 2000 and their third in 2008, then if each one replaces the other, they are all First Charge Mortgages.

Whereas if they kept adding Secured Debt without wiping out the original one, then the 1992 Mortgage would be a First Charge Mortgage, and the ones taken out in 2000 and 2008 would be Second Charge Mortgages, albeit that the 2008 one would be third in line.

I assume Peter Bentley therefore had another already existing First Charge Mortgage, and that was already secured ahead of the later £40,000 Secured Loan, so he was therefore able to bring s140A to bear, with excellent results.

Sadly, I do not think this helps anyone with a First Charge Mortgage if regulated by the FSA/FSMA although there are issues that may alter that, depending on when the First Mortgage was taken out.

This is a link to the Council of Mortgage Lenders (CML) Web Site that sets out the recent changes to the Mortgage Regulation issues reasonably well. But do allow for the fact that it is a Debt Industry site, so please do bear in mind it will be looking at the issues from the enemy's perspective, not from the borrower's perspective:

Mortgage regulation – background

The following link is quite useful, it's a PDF from the Citizens Advice Bureau (CAB) that covers many of the issues that differentiate First and Second Charge Mortgages:

CAB PDF on Mortgage Regulation

The killer for FSA/FSMA Mortgages is s16(6C) of the 2006 Act (CCA 2006):

CCA 1974/2006:

s16

(6C) This Act does not regulate a consumer credit agreement if—

(a) it is secured by a land mortgage and entering into the agreement as lender is a regulated activity for the purposes of the Financial Services and Markets Act 2000; or...

In summary, at least as far as I can tell. s140 is therefore off-limits for anyone fighting a First Charge Mortgage that is Regulated by FSA/FSMA.

I'd like to be corrected, so if anyone has another view, I would enjoy being told I am wrong.

Cheers,
BRW

[Animal]

Re: Does s140 CCA apply to mortgages?

The killer for FSA/FSMA Mortgages is s16(6C) of the 2006 Act (CCA 2006):

In summary, at least as far as I can tell. s140 is therefore off-limits for anyone fighting a First Mortgage that is Regulated by FSMA.

I do agree, however regulated mortgages started on M Day, 31 Oct 2004 (anyone confirm this date?), so anyone with a first mortgage completed prior to 31 Oct 2004 does have s140A to fall back on. Section 16.7.A clearly states:

S16 7A Nothing in this section affects the application of sections 140A to 140C.”

Section 140A.5 re-inserts the exemption for regulated mortgages:

(5) An order under section 140B shall not be made in connection with a credit agreement which is an exempt agreement by virtue of section 16(6C).”

Section 16.6.C

(6C) This Act does not regulate a consumer credit agreement if— (a)
it is secured by a land mortgage and entering into the agreement as lender is a regulated activity for the purposes of the Financial Services and Markets Act 2000; or

(b)
it is or forms part of a regulated home purchase plan and entering into the agreement as home purchase provider is a regulated activity for the purposes of that Act.]

I have traced the SIs related to regulated mortgages and the last one refers to article 61 (which defines regulated mortgages) as coming in on a date specified and published by the treasury, but I've been unable to confirm the day. There are references to m day as 31 Oct 2004, but I cannot find anything official that explicitly states this date.

Here's a reference to the countdown to m-day http://www.newsontheblock.com/articl...n-of-mortgages

I would also add that the FSA rules also have similar provisions to s140A, but I think FSA and FOS have jurisdiction over the county court in relation to regulated mortgages (anyone correct me if I am wrong). This means if you are making an allegation of unfair relationship in defence of a repossession under a regulated mortgage you can ask the complaint to be transferred to the FSA/FOS.

IMHO self certified mortgages prior to regulation, and possibly some after, are open to an attack of unfair relationship. Just beware, that if you've self certified, then you could be open to charges of mortgage fraud - a criminal and jail-able offence.

[Animal]

Re: Does s140 CCA apply to mortgages?

Can anyone point me to the legislation that Bentley was relying on to show his agreement was unenforcable due to irresponsible lending?

[Amethyst]

Re: Does s140 CCA apply to mortgages?

Blemain v Bentley ? unfair relationship provisions 140a CCA afaik. It wasn't written off, but was an agreement made on the steps of the courts, ie wasnt judged on. It was very widely reported eg BBC NEWS | Business | Five-year block on repossession (as you'd expect with Cartel).

[Animal]

Re: Does s140 CCA apply to mortgages?

Blemain v Bentley ? unfair relationship provisions 140a CCA afaik. It wasn't written off, but was an agreement made on the steps of the courts, ie wasnt judged on. It was very widely reported eg BBC NEWS | Business | Five-year block on repossession (as you'd expect with Cartel).

Yes I know that :-)

But his defence argument was that the agreement was unenforceable and I haven't been able to locate any legislation which backs that up, apart from s26-30 FSMA which only applies to regulated activities under FSMA.

Basically I'm trying to build a defence argument similar to Bentley as I think this will help many people subject to repossession...

[amelia33]

Re: Does s140 CCA apply to mortgages?

I do agree, however regulated mortgages started on M Day, 31 Oct 2004 (anyone confirm this date?), so anyone with a first mortgage completed prior to 31 Oct 2004 does have s140A to fall back on. Section 16.7.A clearly states:
Section 140A.5 re-inserts the exemption for regulated mortgages:
Section 16.6.C
I have traced the SIs related to regulated mortgages and the last one refers to article 61 (which defines regulated mortgages) as coming in on a date specified and published by the treasury, but I've been unable to confirm the day. There are references to m day as 31 Oct 2004, but I cannot find anything official that explicitly states this date.

Here's a reference to the countdown to m-day http://www.newsontheblock.com/articl...n-of-mortgages

I would also add that the FSA rules also have similar provisions to s140A, but I think FSA and FOS have jurisdiction over the county court in relation to regulated mortgages (anyone correct me if I am wrong). This means if you are making an allegation of unfair relationship in defence of a repossession under a regulated mortgage you can ask the complaint to be transferred to the FSA/FOS.

IMHO self certified mortgages prior to regulation, and possibly some after, are open to an attack of unfair relationship. Just beware, that if you've self certified, then you could be open to charges of mortgage fraud - a criminal and jail-able offence.

there are I believe some unregulated first charge products 'out there' so would not be exempt IMHO - as regulated are since they are expected to be covered and dealt with via FSA/FOS
1.4 The unfair relationships provisions apply to credit agreements whether
regulated or not.6 The sole exception is where an agreement is exempt
under section 16(6C) of the Act because it is a regulated mortgage
contract or a regulated home purchase plan under the Financial Services
and Markets Act 2000 (FSMA). The provisions otherwise apply to
agreements which are exempt under sections 16, 16A (high net worth
borrowers), 16B (business lending for more than £25,000) or section
16C (buy-to-let agreements) of the Act.
(my underlining) - I am reading this as meaning, the fsma provisions subject to.

[InCourt]

Hi i realise this is an old thread but i have come across it doing my research as it is something affecting me and thought i could update it with some correct information, maybe i'll also get corrected but it will add to the knowledge base as it is still relevant information and i still have gaps in my knowledge (big ones !!) :

First off its not correct to say first charge mortgages are not regulated by the CCA, they may or may not be. The starting point is the amount of credit.....£15k prior to 1998, £25k after 1998. [we'll come to later changes in a bit].

Exemptions: S16 of the CCA seems to be a sticking point looking at the above posts, and appears to be read that Building Societies are exempt from Regulation under the Act. Quoted thus :
16 Exempt agreements.

(1)This Act does not regulate a consumer credit agreement where the creditor is a local authority . . . F1, or a body specified, or of a description specified, in an order made by the Secretary of State, being—

(g)a building society.

There seems to be agreement above that Building Societies [and others] are exempt. But thats not the case. Read in its entirety as i have replicated there needs to be "an order made by the Secretary of State". In other words, its not a blanket exemption. Here is one example of an Order by The Secretary of State............[and if your "body" is specified then its exempt. If its not then its not exempt]

Consumer Credit Exempt Agreements Order 1989 [there are others]
https://www.legislation.gov.uk/uksi/1989/869/made

I'm not going to get too hung up on the FSMA,Mortgage Credit Directive, Regulated Activities Order etc... right now or even Regulated Mortgage Contracts. Because a lot of this regulation is centered around the regulation of lenders and because this question was asked in 2010 and a lot of the answers are in relation to contracts entered into before 2016 or 2004........ both may have different outcomes. You'd need to complile a flow chart for it all really.

If you have identified that your agreement was regulated by the CCA 1974 (as ammended) you'd do well to note a fundamental point of the Act. ; S173 Contracting out is forbidden.

Moving into more modern legislation and its incorporation of the CCA in todays relevance to the more recent legislation and acts, we have the Mortgage Credit Directive Order 2015: [transitional Provisions]
https://www.legislation.gov.uk/ukdsi/2015/9780111127742

Particular point to note are S2 and S29. You will see that all the relevant protections of the CCA are still included for S77/S78 etc.......

FCA produced a report in 2019, specifically on this subject.."Retained Provisions of the CCA" :

https://www.fca.org.uk/publication/c...nal-report.pdf


Odd thing to do if Mortgages where not covered by the Consumer Credit Act :-)

[pt2537]

Hi i realise this is an old thread but i have come across it doing my research as it is something affecting me and thought i could update it with some correct information, maybe i'll also get corrected but it will add to the knowledge base as it is still relevant information and i still have gaps in my knowledge (big ones !!) :

First off its not correct to say first charge mortgages are not regulated by the CCA, they may or may not be. The starting point is the amount of credit.....£15k prior to 1998, £25k after 1998. [we'll come to later changes in a bit].

Exemptions: S16 of the CCA seems to be a sticking point looking at the above posts, and appears to be read that Building Societies are exempt from Regulation under the Act. Quoted thus :
16 Exempt agreements.

(1)This Act does not regulate a consumer credit agreement where the creditor is a local authority . . . F1, or a body specified, or of a description specified, in an order made by the Secretary of State, being—

(g)a building society.

There seems to be agreement above that Building Societies [and others] are exempt. But thats not the case. Read in its entirety as i have replicated there needs to be "an order made by the Secretary of State". In other words, its not a blanket exemption. Here is one example of an Order by The Secretary of State............[and if your "body" is specified then its exempt. If its not then its not exempt]

Consumer Credit Exempt Agreements Order 1989 [there are others]
https://www.legislation.gov.uk/uksi/1989/869/made

I'm not going to get too hung up on the FSMA,Mortgage Credit Directive, Regulated Activities Order etc... right now or even Regulated Mortgage Contracts. Because a lot of this regulation is centered around the regulation of lenders and because this question was asked in 2010 and a lot of the answers are in relation to contracts entered into before 2016 or 2004........ both may have different outcomes. You'd need to complile a flow chart for it all really.

If you have identified that your agreement was regulated by the CCA 1974 (as ammended) you'd do well to note a fundamental point of the Act. ; S173 Contracting out is forbidden.

Moving into more modern legislation and its incorporation of the CCA in todays relevance to the more recent legislation and acts, we have the Mortgage Credit Directive Order 2015: [transitional Provisions]
https://www.legislation.gov.uk/ukdsi/2015/9780111127742

Particular point to note are S2 and S29. You will see that all the relevant protections of the CCA are still included for S77/S78 etc.......

FCA produced a report in 2019, specifically on this subject.."Retained Provisions of the CCA" :

https://www.fca.org.uk/publication/c...nal-report.pdf


Odd thing to do if Mortgages where not covered by the Consumer Credit Act :-)

Simple answer is, no, the 1974 Act doesnt apply to first charge mortgages

[InCourt]

Simple answer is, no, the 1974 Act doesnt apply to first charge mortgages

Why would the FCA produce a Policy Statement on the " Future Regulatory treatment of CCA regulated first charge mortgages" ?

https://www.fca.org.uk/publications/...d-first-charge

[atticus]

They answer that question at the very beginning!

Why are we issuing this policy statement?

In November 2015 we consulted on the future regulatory treatment of first charge mortgages which were entered into before 31 October 2004 and are regulated under the Consumer Credit Act 1974 (CCA) and our Consumer Credit sourcebook (CONC).

This Policy Statement (PS) summarises the feedback we received on the consultation and our response. In general, respondents agreed with our proposed amendments. We are now publishing final rules which come into effect on 21 March 2016; however, they will only apply when the affected loans become regulated mortgage contracts on 21 March 2017, unless the firm in question takes steps to apply the relevant rules before that date.

[InCourt]

They answer that question at the very beginning!

Hi Atticus, yes the important bit being the words "affected loans".
Its important to set out what that Policy Guidance actually does. It sets out the framework for dealing with CCA mortgages, and how to bring them into the Regulated Mortgage Contract regime for Regulated Activities with regards to Administering them. What it does not do is "disapply" the 1974 Act to any Consumer Credit Agreement mortgage.
GoughSq Chambers have a write up on this very thing :

https://goughsq.co.uk/wp-content/upl...PLC-Jan-20.pdf

And in fact my own mortgage lender sets out the full legal position in their Base Prospectus 2019 (start at page 45):
https://www.santander.co.uk/csdlvlr/...nt-Disposition

As you will see the 1974 Act does very much apply to CCA mortgages, still, assuming thats what they where when they where executed.

[atticus]

You asked a question. I answered it.

[InCourt]

You asked a question. I answered it.

For clarification: I'd like to thank you for agreeing with me. I only felt the need to explain further as i imagined (based on experience) that people thought this was a no go.