Blemain Finance Possession Claim

[jumper999]

Re: Blemain Finance Possession Claim

It seems that if you have an arguable case that the lender has contributed in someway to the loss of their own loan and funding that the courts will look in to this.....and we all know that sub prime lenders were given out loans like confetti....and rightly so they should at least be made to bear some losses for doing that.....

In my case Blemain loaned to us without asking for a single piece of documentary evidence to support my OH's self certified earnings......and I mean not a single piece of evidence. OH stated he was earning £30k a year......now if the court were to ask Blemain what measures did they take to prove this....I can gurantee 100000% that will not be able to justify this. All they done was an Equifax report on the both of us.

We took this loan out through Ocean Finance....and when I sent OF an SAR...their call data log records clearly stated:

"POOR PAYMENT PROFILE"
"MORTGAGE IN ARRANGEMENT"
"DEFAULTS"

Will allow three months payment holiday to get them on their feet.........so..............Blemain cannot claim that they were not aware of our history and chose to loan knowing the full facts that we had a poor payment profile...........Blemain were also aware that I was not working....yet still loaned. OK I admit there was a long time where payments were not made....but I was in continuous correspondence with Blemain an complaining over many matters which I was not happy with.....so I will take what ever punishment the court gives me for this.....although I have been making regular contractual payments since Jan 12....plus £30 on top towards the arrears built up....but I am sure that the court will not look kindly on how Blemain loaned to us and they took a risk...so should be punished for their part in this mess I am in.

FSA principles



The importance of the FSA’s role, as regulator in all this, cannot be stressed enough. For sub-prime lenders, the news is particularly bad. Almost certainly, the FSA impact means that the risk of contributory negligence claims (from borrowers, professionals and other quarters) is markedly higher now than it was in the 1990s.
Faced (for now) with a dearth of authority on what amounts to imprudent sub-prime behaviour in law, defendants are likely to adopt the FSA’s principles and outcomes-based tests to serve as the relevant standard of non-negligent lending practice.


There was no real regulatory dimension to speak of in the 1990s cases. The FSA imposes a much stricter and more extensive regime than the law of negligence ever did.
Professionals (and other would-be recovery targets) are now poised to use the FSA’s recent investigation into the sub-prime sector as a springboard for counter-attacking claimants from that camp. There may well be evidence in this vein that customers have not been treated fairly. It is only a short stretch from there to argue that lenders should bear more personal responsibility for their own losses, when loans default.


The FSA enquiry did not reveal widespread mis-selling in the sub-prime market; nevertheless, it is easy to predict that the main focus for any counter-claims will be in the realms of application plausibility and affordability issues.


Building on the 1990s claims experience, this is essentially an issue over the depth of enquiries required into a borrower’s creditworthiness on any given application.
To what extent are lenders expected to protect (sometimes desperate) borrowers from themselves? Turning a blind eye to obvious discrepancies will readily be regarded as negligent behaviour. But where a borrower has, perhaps, ‘over-egged the pudding’ in his application, there must be limits on a lender’s duty to act as private detective and look behind the paper presentation.
Whether through the Ombudsman Service or the courts, we need to see some decided cases on these points before any reliable principles can bed down.
In the 1990s, there was some doubt that the issue of internal underwriting criteria could ever have a bearing in lending negligence assessments. Now, however, fuelled by the FSA’s recent concerns, defendants are likely to seize on the point once again.
Even if not negligent in itself, a lending guideline breach is likely to put defendants on the suspicion trail, to trawl for other more serious failings lurking underneath the surface.


Looking ahead


There has not yet been a surge in UK sub-prime borrower default, but those days may soon be upon us. If and when it happens, lenders will need to consider their options for clawing back security shortfalls.


The traditional routes of recovery – principally, against professional advisers – may be more hazardous this time around. Prospective recovery targets are ready to go on the counter-attack. The FSA regime, sweeping disclosure rules and the uncertain legal position could all work to the counter-claimant’s advantage.
Lenders really must be sure of a ‘whiter than white’ showing if they are to launch recovery actions with confidence.

[jumper999]

Re: Blemain Finance Possession Claim

Contributory negligence: the 1990s claims experience

Professional indemnity (PI) insurers still harbour painful memories from the 1990s, when lender litigation was rife and their policyholders (mainly solicitors and valuers) were badly mauled. This time around, PI insurers will be determined not to pick up the tab as the consequences of the recent easy money era start to unravel.

By the end of the 1990s claims period, professionals were starting to cross-claim, more and more, for contributory negligence on the part of the lender. In the event, lenders emerged from those contests relatively unscathed. The courts did find some degree of imprudent lending but typically, this would be reflected in a discount only of 10 or 20 per cent on the lender’s total damages recovery.
Some basic principles emerged from the 1990s cases about assessing lending practice for negligence.

The first of these involved the interplay between borrower suitability and the adequacy of security given. In the 1990s cases, many lenders were criticised for taking information supplied by applicants at face value and for not ‘digging deeper’. The courts tended to support those lenders but only where a comfortable margin of equity was available.

Even with the most generous provision of security, however, lenders would not be entitled to ignore something striking about an applicant’s status or circumstances, as Wright J made clear in HIT Finance Ltd v Lewis & Tucker Ltd (1993):
”I am not suggesting that the prudent lender, merely because he had the comfort of more than adequate security, is entitled to shut his eyes to any obviously unsatisfactory characteristics of the proposed borrower. Plainly a lender would not be acting prudently if he made a loan in circumstances where he had substantial reason for suspecting the honesty of the borrower.”
A number of other contributory negligence allegations in the 1990s centred on lenders’ departures from their own published underwriting guidelines.
This sort of problem drew a mixed response from the courts. PI insurers argued that a lender’s failure to follow its own internal controls (having taken the trouble to formulate them in the first place) was prima facie evidence of imprudence.

The courts tackled this sort of issue on a case-by-case basis. In Housing Loan Corp v William H Brown (1999), for example, the lender’s criteria required that – where two valuations were supplied at the application stage – underwriters should always adopt the lower figure for the lending decision. The Court of Appeal approved the following approach:
I fully accept that it is not necessarily negligent for an autonomous body to step outside self-imposed controls. What matters is whether or not the controls were in place for a sensible purpose. I judge it to be a sensible precaution to act upon the lower of two valuations. It is a precaution which acknowledges the difficulty in making an accurate valuation of certain properties and it is intended to safeguard the interests of the lender. In my judgment, it was foolish in the extreme to ignore [the lower] valuation.”

Interestingly, the Financial Services Authority’s (FSA) recent review of behaviour in the sub-prime sector revealed departures from lending policies to be a major failing. This issue is likely to be rekindled as a key indicator of imprudent lending in contributory negligence claims to follow.

Sub-prime lending and negligence

Towards the end of the 1980s, centralised lenders had arrived on the scene for the first time. Lawyers for PI insurers argued that non-status lending was, by its very nature, inherently imprudent. Some judges agreed with that analysis. Here is what Sir John Vinelott had to say in the 1996 case of Birmingham Midshires v Parry:

A new type of lender, the centralised lender with no high street presence and with ready access to finance, was attracted to the field. To establish a position in the market the centralised lender was willing to lend money on a non-status mortgage – that is to rely to an excessive extent on the value of the security and, as regards the personal covenant, to rely on self-certification. That was, in my judgment, a risky course.”
Sound familiar? One might readily take a similar view about the growth, in more recent times, of the sub-prime sector and adverse credit lending generally.

In practice, however, the courts will be a little more permissive. Lender behaviour is likely to be judged relatively. That is to say, a lender’s practice and procedures will be assessed by reference to the standards of those operating in the same niche sector. It would be inappropriate, in most cases, to judge sub-prime lending against mainstream underwriting principles.
The test of negligence, therefore, will be: “did this sub-prime lender behave in a way that no other prudent lender, in the same market, would have done?”

[jumper999]

Re: Blemain Finance Possession Claim

Good idea Tuttisi....I may just do that when I get a spare moment.

Re: Blemain Finance Possession Claim

Looks like that Andew Otchie can take on work directly from the public. Sometimes good to have a barrister with you or at least he maybe able to supply you with the links for the relevant cases. It might be worth giving him a call 0 that wont cost and see what he says.

• Blemain Finance v Dekalu [2012]

Successfully represented defendant at multi-track trial, in substantial claim for possession of her property and arrears, resulting in her being exonerated from an accusation of fraud, after relying on expert evidence and raising defence that mortgage was voidable.

http://www.12os.com/otchie



The above case sounds very interesting...not sure if this judgment was registered or not? anyone know if there is a way to get a hold of it?

[MIKE770]

Re: Blemain Finance Possession Claim

gets more and more interesting!

[jumper999]

Re: Blemain Finance Possession Claim

Lenders can face claims of contributory negligence

With the economy now officially in recession and lending agencies severely restricting new business, we can all hear the echo of the property market slump of the late 1980s

There is an increase in the incidence of mortgage arrears and consequently an increase in lenders attempting to enforce recoveries against borrowers through the courts. Lenders will be looking to recover these losses if they are unable to recover the money from their borrowers, so professionals who advise in relation to these subject transactions will find themselves in the firing line for recovery claims. However, in making such claims lenders are leaving themselves open to counter claims of contributory negligence.

The raft of case law which arose out of the last property market slump in the 1990s defines (amongst other issues) the concepts of causation, the scope of the duty owed by professionals and contributory negligence as mechanisms by which the courts can limit the liability of negligent professionals.

A plea of contributory negligence is not available to a professional defendant in every claim. For instance, if a claim is framed in contract or deceit alone contributory negligence is not available to a defendant as a means to reduce the level of recoverable damages. A plea of contributory negligence is available to a defendant by virtue the Law Reform (Contributory Negligence) Act 1945. Section 1 of the Act states that where a person suffers damage:

“as a result partly of his own fault and partly of the fault of any other person or persons…the damages recoverable in respect thereof shall be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage”

In the case of Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd (1997) a two stage test was used which will be applicable to most professional negligence cases:

• What was the overall damage suffered by the lender as a consequence of the defendant’s report?
• Which part of the loss is recoverable against the defendant?

In most claims against negligent surveyors or other such professionals where the lenders’ actual loss was greater than the overvaluation, the damages awarded by a court have been “capped” at the level of the overvaluation.

In the event that only part of a lender’s loss is recoverable from the professional then it might not be appropriate to apply for a further reduction for contributory negligence. The position was considered by the House of Lords in Platform Home Loans v Oyston Shipways Ltd (2000) following which the law appears to be that if the lender’s negligence contributes to the decision to lend then it can be considered contributory negligence, but the reduction in damages can only be applied to the lender’s total losses not to capped damages. For example, where a lender’s total losses are lower than the difference between a negligent and a non-negligent valuation of a property then the damages will be recoverable but are not likely to be reduced any further by the courts.

In Banque Bruxelles Lambert, the House of Lords concluded that the lenders total losses came within the scope of the Act and should be reduced for contributory negligence. A 20 percent reduction for contributory negligence was applied to total losses of over £600,000 resulting in an adjusted loss of just over £489,000. That sum was below the over valuation (£500,000) and therefore it was not just and equitable to reduce the over valuation figure further, as to do so would have been a double deduction.

When can a lender be criticised as being imprudent? To succeed in a plea of contributory negligence, a defendant will need to establish that the lender acted with a lack of care or in a manner which contributed to its own losses. It is possible for a successful plea of contributory negligence to result in a reduction of damages, or to even extinguish liability. Whether the lender is a bank or a building society will have an impact on the standards of lending deemed responsible by the courts, as will the nature of the loan and in particular whether it was a commercial or residential loan.

In the case of Housing Loan Corporation v William H Brown (1999) the Court of Appeal restated the approach to lender’s contributory negligence. In that case there had been a non-status loan and in the circumstances the court decided the lender’s contributory negligence merited a reduction in damages of 75 percent.

Whether or not there is a finding of contributory negligence against a lender will depend on all the facts surrounding a loan. The courts have not made findings that certain acts/omissions by lenders are of themselves always contributory negligent, so a non-status loan will not always be contributory negligent. The acts/omissions which have historically given rise to findings against lenders and which are likely to be relevant to the next round of lender claims are matters such as the following:

• The lack of investigation into the borrower’s means, either non-status loans or loans which are not fully investigated.
  
• Failure to take up references and to adequately investigate the borrower.
  
• Failing to ascertain the purpose for which a loan is required.
  
• Failing to pick up on warning signs from the transaction.
  
• Failure to comply with its own lending criteria/guidelines.
  
• Failing to properly consider a valuation.
  
• Lending an excessive percentage of the property valuation.

The two cases which set the scene for findings of contributory negligence against lenders and which again arose out of the property crash of the 1990s were Bristol & West Building Society v Fancy & Jackson(a Firm) (1997) and Nationwide Building Society v Balmer Radmore (1999). In Bristol & West the court reduced damages for contributory negligence where the lender had loaned more than 75 percent of the value of the security. In the Nationwide case there was a finding of 75 percent contributory negligence against the lender in circumstances which included failing to investigate the borrowers income, failure to obtain a bank reference or heed previous arrears, and making a loan of 90 percent of the valuation.

We are likely to see cases coming through the courts during the next few years in which there will be much higher reductions of damages for contributory negligence than we have seen in the past. In the period of boom leading up to the recent slump we have seen loans of 90 percent and above as common place. We have also seen an increase in non-status/self certified loans and buy–to–let (dubbed “lie-to-bet”) loans. The scene has been set for some interesting arguments concerning the appropriate level of reduction of damages, and on the back of that further debate concerning the entitlement of defendant professionals to disclosure of all lenders’ documents relevant to lending decisions.

Did we learn anything from the litigation which followed the property crash of the 1990s? It seems that if nothing else we have a framework of case law which will assist with the assessments of new cases.

[jumper999]

Re: Blemain Finance Possession Claim

• Blemain Finance v Dekalu [2012]

Successfully represented defendant at multi-track trial, in substantial claim for possession of her property and arrears, resulting in her being exonerated from an accusation of fraud, after relying on expert evidence and raising defence that mortgage was voidable.

http://www.12os.com/otchie



The above case sounds very interesting...not sure if this judgment was registered or not? anyone know if there is a way to get a hold of it?

[jumper999]

Re: Blemain Finance Possession Claim

Thanks suffering I will bare what you have said in mind......been trying to see if I can fins out as much as Blemain as I can in the meantime.

Counsel representing Blemain Finance in The Democratic Republic of Congo
v. Blemain Finance Limited, this matter involved issues of State and
diplomatic immunity in relation to a mortgage over the DRC Embassy and
Ambassador’s residence in London

I found the above info on page 6 of the document attached below....interesting to find out about what happened there...if I can find this case.

[suffering]

Re: Blemain Finance Possession Claim

Good luck jumper999 stay focused on your main points as you may have limited time to put your side forward, don,t lose sight of your strong areas with the surrounding "fluff" don,t over complicate things. remember if you are handeling this yourself, Blemains solicitors have a duty to explain everthing clearly so that you fully understnd it, the judge will expect them to comply with any requests to explain themselfs stay positive blemain are playing mind games

[jumper999]

Re: Blemain Finance Possession Claim

Even though blemain may have won the above case....it has laid out quite clear comments on blemains lending criteria....and contributory negligence.....and links to other case laws....just what I need.

[jumper999]

Re: Blemain Finance Possession Claim

Just reading up if Blemain have received any judgments against them or for them....

Did not know about this one...
Blemain Finance Ltd v E.Surv Ltd

http://www.bailii.org/ew/cases/EWHC/TCC/2012/3654.html

[jumper999]

Re: Blemain Finance Possession Claim

I am just reading up on case laws about penalty charges...as I have many many letters from Blemain when I complained that their charges were unfair......and their responses have always been that they were not....

Precedent case law

• Wilson v Love [1896] 1 QB 626 — A tenant farmer agreed to pay an additional rent of £3 per ton by way of penalty for every ton of hay or straw that he sold off the premises during the last 12 months of the tenancy. The clause was regarded as a penalty because at the time hay was worth five shillings per ton more than straw, and thus the landlord was unjustly enriched to the tune of 5s for each ton of straw sold.

• Dunlop Pneumatic Tyre Co. Ltd. v New Garage and Motor Co. Ltd. [1915] AC 79 — The House of Lords decided that a liquidated damages clause would be considered a penalty and therefore unenforceable where the sum to be paid by the defendant was 'extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be provided to have followed from the breach.'

• Bridge v Campbell Discount Co. Ltd. [1962] AC 600 — A customer bought a car under a hire purchase agreement, paid the initial and first payments and then cancelled the agreement. The company tried to recover large sums specified in the contract for cancelling the agreement, but the court decided these were excessive and constituted a penalty, making them unenforceable.

• Murray v Leisureplay (2004) — A former employee of Leisureplay was sacked and attempted to claim three years' salary, as outlined in his contract of employment. The court decided this was excessive and constituted a penalty, therefore he was not entitled to this level of damages.

I received this advice from a top barrister back in Feb 2011....regarding Blemain's interest rate...and how they can vary whenever they want:

1. In my opinion the Blemain power to vary the mortgage interest rates is likely to be held to be unfair as it is too widely drafted. It is vague where the Regulations require clarity. It is one sided whereas the Regulations are made for the protection of consumers. It leaves the consumer unable to obtain any objective appraisal of whether the reason given is the reason stated in the agreement. No particular lending rate or reference is specified.

2. If I am right and the clause is held to be unfair then the right to vary will be removed from the contract. That will fix the interest rate at 9.8% and the repayments at £335.76 for the remainder of the term.

3. I would assess the prospects of success on this argument at about 65 to 70%. I think that if we fail on the specific attack on the variation clause under the Unfair Terms in Consumer Contracts Regulations then the explanations given by Blemain are likely to be accepted by the Courts. In other words I doubt the changes are unfairly operated but I think the clause which gives them the power to vary will be struck down as unfair.
So, even if my interest rate stays at 9.8% there is a good possibility that Blemain will have their term which allows them to vary struck down......not bad....if this happens to me then this will apply to everyone who has a loan with Blemain.....I would think.

[jumper999]

Re: Blemain Finance Possession Claim

A good read for all.

[PlanB]

Re: Blemain Finance Possession Claim

will be posting up more soon..............

I see nothing's changed :typing:

[jumper999]

Re: Blemain Finance Possession Claim

Blemain are regulated by the FLA......below is what the FLA advise about variable interest rate loans.....but do Blemain comply? well they don't even follow their own guidelines and policies so no guess they don't.


2F Variable-rate loans


This section will apply to you if your agreement is for a variable-rate loan
(where we have the right, as set out in your agreement, to change the interest
rate from time to time).

This does not include variable-rate loans for buying a motor vehicle (see
section 2H) or revolving credit loans (see section 2G).

Before, and when, you become a customer, we will explain how you may pay
back your loan early. For loans under £25,000, we will also give you at least
three examples of what the early-settlement figure would be at various stages
during the term of your loan (based on the actual loan amount or the nominal
amount of £100 or £1,000).

Changes to the interest rate may affect your monthly payments. We will tell you
about any changes to the interest rate by letter, e-mail or other personal notices
at least seven days before they take effect. Where relevant, we will also put
obvious notices in our branches and may place notices in national newspapers.
If the change is to your advantage, we may change your interest rate sooner.
To help you compare rates more easily, our notices will clearly show the old
and new interest rates that apply to your agreement.

This section (2F.2) only applies if the rate we charge is changing. It will not
always be possible to tell you about changes before they take effect if your
agreement is linked to a published rate (for example, a bank base rate or the
finance house base rate) and it is only that published rate that is changing. In
that situation we will tell you as soon as possible by letter, e-mail, other personal
notices, or by showing the impact on your monthly account statement.

Statements
If you ask us to, we will send you an account statement (this does not apply to
requests made less than a month after the previous request or where nothing
further has been paid under the agreement).

If your statement has an entry which seems to be wrong, you should tell us as
soon as possible so we can sort it out.