Unregulated Secured Loan

[meellis]

Re: Unregulated Secured Loan

Fred , agree with you but I am hoping we are both wrong and Brandy has found the holy grail and found how to get CCA to cover all existing loans that were un regulated, we live in hope.

[Fred]

Re: Unregulated Secured Loan

Fred , agree with you but I am hoping we are both wrong and Brandy has found the holy grail and found how to get CCA to cover all existing loans that were un regulated, we live in hope.

In my opinion.....no chance, the secured loans from the "unregulated" period are not even going to have the protection of the MCD, which, has now taken over from the CCA 1974.

[Brandy1234]

Re: Unregulated Secured Loan

Sorry Brandy but you need to look at your information again. In 2006 unfair relationships replaced section that was classed as extortionate credit bargains in the original CCA, all new and existing agreements are covered by this as long as they were still in place in other words you cannot look at an agreement that had been finished and closed. The £25,000 was lifted for all new loans from the point that the 2006 provisions were implemented but were not retrospective to any existing agreements.
http://www.guildhallchambers.co.uk/f...litiesLWRF.pdf
Obviously if there has been a change that nobody is aware of and you can link to any site that outlines this then you are potentially sitting on a life line for a lot of victims so could please share this to help a great number of people, I certainly don't mind being wrong about my info.

I've looked at the link you posted.

The information at paragraph 19 in the link you posted is very interesting. It talks about exemptions relating to 'business purpose', which is what I am referring to.

19. The first potentially helpful exemption category is the “business purposes” exemption9. This exemption category provides that the CCA does not regulate a consumer credit agreement10 under which the creditor provides the borrower with credit exceeding £25,000, if the agreement is entered into by the borrower or hirer wholly or predominantly for the purpose of a business carried on by him.

20. The relevant agreement shall be presumed to have been entered into wholly or predominantly for business purposes if it contains a declaration to that effect by the borrower or hirer11. However, this presumption does not apply if the lender or any person acting on behalf of the lender in connection with the entry into the agreement knows or has reasonable cause to suspect that the agreement is not entered into by the borrower or hirer wholly or predominantly for the purposes of a business carried on by him12.

The information I posted came from here:

http://glovers.co.uk/news_article205.html

[meellis]

Re: Unregulated Secured Loan

Hi Brandy, if you look at my link at paragraph 6 it states that you cannot opt out of CCA as you have suggested the OP might have done. Self certifying was nothing to do with opting out of any regulations it was just a tool for people who couldn't have their income verified by the likes of a frequent wage slip. Self certifying your income always pushed you into more dubious and more expensive lenders. The link I sent, now I have re-read it, actually covers unfairness more than other things but I notice it doesn't actually state about retrospective measures on existing loans apart from in relation to unfairness. I now remember that the OFT at the time followed by the FCA were the people who said they had no powers retrospectively and because of that un regulated are still viewed by the legal system as just that. As Fred as put they are actually overwritten now by MCD which was supposed to bring all secured lending into line and bring second charge mortgages under the same protection as first charge. Again, when asked, the FCA have stated that when it was decided what was to be incorporated into MCD it was decided that all ne products would be but it wouldn't be retrospective so again anything that was taken out as un-regulated will stay un-regulated. It does beg the question whether this could be challenged but I am sure it would take an awful lot of pressure from a large number of people which I don't believe there is.

[Brandy1234]

Re: Unregulated Secured Loan

Hi Brandy, if you look at my link at paragraph 6 it states that you cannot opt out of CCA as you have suggested the OP might have done. Self certifying was nothing to do with opting out of any regulations it was just a tool for people who couldn't have their income verified by the likes of a frequent wage slip. Self certifying your income always pushed you into more dubious and more expensive lenders. The link I sent, now I have re-read it, actually covers unfairness more than other things but I notice it doesn't actually state about retrospective measures on existing loans apart from in relation to unfairness. I now remember that the OFT at the time followed by the FCA were the people who said they had no powers retrospectively and because of that un regulated are still viewed by the legal system as just that. As Fred as put they are actually overwritten now by MCD which was supposed to bring all secured lending into line and bring second charge mortgages under the same protection as first charge. Again, when asked, the FCA have stated that when it was decided what was to be incorporated into MCD it was decided that all ne products would be but it wouldn't be retrospective so again anything that was taken out as un-regulated will stay un-regulated. It does beg the question whether this could be challenged but I am sure it would take an awful lot of pressure from a large number of people which I don't believe there is.

Yes, I understand what you are saying. Thank you.

I'm conscious that there are only two types of 'product' that were 'sold' to individuals - i.e 'regulated' or 'unregulated'

I'm also conscious that when brokers peddled self cert loans, they were in fact selling us 'unregulated' products

I s'pose the issue for many of us is the courts, as you say, are duty bound to have regard to the business nature of an 'unregulated' product - and have no option other than to decide the issues on that basis only, unless a rebuttal contention is submitted.

Thing is, how does one rebut the 'business presumption'?

I would argue the MCD is retrospective in regard to unfair relationship claims - and applies to both 'regulated' and 'unregulated' products.

Thing is, would the courts accept a relationship based on an unregulated product (business purposes) is unfair because we say it is??

[meellis]

Re: Unregulated Secured Loan

Sorry Brandy but you are missing the point, Self cert was a product that you were allowed to prove yourself to show affordability which had nothing to do with being regulated or un-regulated. If your loan was within the realms of regulation but you had to self certify it would still be covered it just would have been at a higher interest rate because of the risk factor. Also , especially in the case of this thread, forget any business aspect. This loan is un regulated due to the fact that it was taken out before the 2006 CCA amendments were implemented and was above the £25,000 limit in place at the time (still CCA 1974). All of the legal system and regulatory bodies have stated that this part is not retrospective so an un-regulated product taken out before the implementation of CCA 2006 amendments remain un-regulated. The only recourse available through the 2006 amendments is through the unfair relationship which I am imagining was put in to try and help a few people with existing problems. The issues with this is always down to how the courts interpret it which will either be beneficial to lenders or borrowers. MCD was a Europe wide initiative that was supposed to bring all secured lending into line but the powers that be have cherry picked what they want from it and have stated that it as well will not bring loans that were taken out as un-regulated into the fold even if they meet all of the criteria. If I was cynical I would say the legal and regulatory system do not want to deal with the mess and if I was truly cynical I would say it would be down to the amount of investment in the sector through pension funds and other investment companies and the possible losses they would make if the problem was dealt with.

[Brandy1234]

Re: Unregulated Secured Loan

Sorry Brandy but you are missing the point, Self cert was a product that you were allowed to prove yourself to show affordability which had nothing to do with being regulated or un-regulated. If your loan was within the realms of regulation but you had to self certify it would still be covered it just would have been at a higher interest rate because of the risk factor. Also , especially in the case of this thread, forget any business aspect. This loan is un regulated due to the fact that it was taken out before the 2006 CCA amendments were implemented and was above the £25,000 limit in place at the time (still CCA 1974). All of the legal system and regulatory bodies have stated that this part is not retrospective so an un-regulated product taken out before the implementation of CCA 2006 amendments remain un-regulated. The only recourse available through the 2006 amendments is through the unfair relationship which I am imagining was put in to try and help a few people with existing problems. The issues with this is always down to how the courts interpret it which will either be beneficial to lenders or borrowers. MCD was a Europe wide initiative that was supposed to bring all secured lending into line but the powers that be have cherry picked what they want from it and have stated that it as well will not bring loans that were taken out as un-regulated into the fold even if they meet all of the criteria. If I was cynical I would say the legal and regulatory system do not want to deal with the mess and if I was truly cynical I would say it would be down to the amount of investment in the sector through pension funds and other investment companies and the possible losses they would make if the problem was dealt with.

Thank you for this.

Are you saying I am wrong because I may have misunderstood what this means?:
EXPLANATORY NOTE

(This note is not part of the Order)


This Order brings into force further provisions of the Consumer Credit Act 2006, which amend the Consumer Credit Act 1974. It is the final Order that will be made.

The provisions in Schedule 2 come into force on 6th April 2008 and the provisions in Schedule 3 come into force on 1st October 2008.

Article 3(1) and Schedule 2 commence section 2(1) of the Consumer Credit Act 2006 insofar as it applies to agreements other than relevant agreements of a description set out in Schedule 1.

Section 2(1) of the Consumer Credit Act 2006 amends section 8 of the Consumer Credit Act 1974 and removes the £25,000 limit for consumer credit agreements. Article 4 of the Order provides that section 2(1) has no effect where an agreement varies or supplements an agreement made before 6th April 2008 for the provision of credit exceeding £25,000 and either does not itself provide for further credit to be advanced or is itself an exempt agreement under the Consumer Credit Act 1974.


SCHEDULE 1
MEANING OF “RELEVANT AGREEMENT”

1. A consumer credit agreement is a relevant agreement if any sums due under it are secured by a land mortgage on land outside the United Kingdom.
2. A consumer credit agreement is a relevant agreement if any sums due under it are secured by a land mortgage on land in the United Kingdom where the condition in paragraph 3 is satisfied.
3. The condition is that at the time the agreement is entered into less than 40% of the land is used, or is intended to be used, as or in connection with a dwelling—
(a)by the debtor or a person connected with the debtor, or
(b)in the case of credit provided to trustees, by an individual who is the beneficiary of the trust or a person connected with such an individual.
4. For the purposes of paragraph 3 the area of any land which comprises a building or other structure containing two or more storeys is to be taken to be the aggregate of the floor areas of each of those storeys.
5. For the purpose of paragraph 3 a person is “connected with” the debtor or an individual who is the beneficiary of a trust if he is—
(a)that person’s spouse or civil partner;
(b)a person (whether or not of the opposite sex) whose relationship with that person has the characteristics of the relationship between husband and wife; or
(c)that person’s parent, brother, sister, child, grandparent or grandchild.



http://www.legislation.gov.uk/uksi/2008/831/note/made

No worries, if you still think I am wrong, but, given the law above, the question I think the OP needs to overcome is:,

Did the OP's 'unregulated' agreement meet the conditions of being a 'relevant agreement', so that it can be shown he/she did not use more than 40% of the house as a dwelling at the time the agreement was entered into?

[meellis]

Re: Unregulated Secured Loan

I am hoping that you could prove yourself right so that all of us trapped with un-regulated loans that are robbing us of homes and lively hoods can see a light at the end of the tunnel. I think you need try and interpret section2 (1)
Section 2(1) of the Consumer Credit Act 2006 amends section 8 of the Consumer Credit Act 1974 and removes the £25,000 limit for consumer credit agreements. Article 4 of the Order provides that section 2(1) has no effect where an agreement varies or supplements an agreement made before 6th April 2008 for the provision of credit exceeding £25,000 and either does not itself provide for further credit to be advanced or is itself an exempt agreement under the Consumer Credit Act 1974.

[Brandy1234]

Re: Unregulated Secured Loan

I am hoping that you could prove yourself right so that all of us trapped with un-regulated loans that are robbing us of homes and lively hoods can see a light at the end of the tunnel. I think you need try and interpret section2 (1)
Section 2(1) of the Consumer Credit Act 2006 amends section 8 of the Consumer Credit Act 1974 and removes the £25,000 limit for consumer credit agreements. Article 4 of the Order provides that section 2(1) has no effect where an agreement varies or supplements an agreement made before 6th April 2008 for the provision of credit exceeding £25,000 and either does not itself provide for further credit to be advanced or is itself an exempt agreement under the Consumer Credit Act 1974.

I'm not sure if you are still looking for the Holy Grail, or think I have the definitive answer to how you can find it??

All I can say is, my attempt at understanding section 2 (1) above is already posted.

Taking into account what you have said and posted, alongside what I have said and posted, I would attempt to explain things a bit more (in my view) in this way::

£25k limit removed for ALL consumer credit agreements EXCEPT for those that are made before April 2008 that exceed £25k, and meet the conditions thereto, and which do not provide further credit or are exempt.

The only types of product I can think of that were sold to consumers over the £25k limit are those presumed to have been entered into for business purposes. So, I s'pose, we are talking about mortgages.

Then, in my view, all you have to do is work out what type of mortgage was sold to you?

Did you or do you hold a 'regulated' mortgage or an unregulated mortgage.

i.e - did you or did you not use 'less' than 40% of the house as a dwelling at the time the agreement was entered into etc?

Self Certs are imo: unregulated, they generally exceeded the £25k limit, and generally, do not provide further credit and are generally exempt from CCA by nature of being business related, added to which is the 'presumption' that they were entered into for business purposes by the courts

Maybe, I'm making it seem far too simple, I'm happy to be persuaded otherwise of course.

[meellis]

Re: Unregulated Secured Loan

Okay unfortunately Brandi you have made to may assumptions based on what must be limited experiences.
1 The OP's loan was made for over £25,000 before April 2008 hence still un-regulated.
2 The majority of people caught in this trap borrowed over £25,000 to do things like home improvements and consolidate other finances, in fact sometimes your were encouraged to consolidate existing debt to be able to get the finance you required which coincidentally took you above the £25,000 limit.
3 These second charge secured loans were called second mortgages but were outside mortgage regulations because only first charge was covered by regulations and because of the £25,000 limit were not covered by CCA
4 As stated before forget the business aspect as in point 2 these loans are not for business purposes and of course business loans are loans not mortgages.
5 Technically mortgages are all regulated after a point in I believe the 80's, see point 3 on what is a mortgage.
6 Self certs I will say again are proving you can afford the mortgage /loan so when you bought a property to live in (not for business again) and you were maybe self employed you would have self certify that you were earning enough. You could self certify a first mortgage hence it would be regulated, you could self certify a loan under £25,000 which would be regulated and after April 2008 and you could self certify a loan above £25,000 which would be regulated (in fact at that point it couldn't be un-regulated because you cant opt out)

7 You are making it far too simple, maybe for a reason?

[Brandy1234]

Re: Unregulated Secured Loan

Okay unfortunately Brandi you have made to may assumptions based on what must be limited experiences.
1 The OP's loan was made for over £25,000 before April 2008 hence still un-regulated.
2 The majority of people caught in this trap borrowed over £25,000 to do things like home improvements and consolidate other finances, in fact sometimes your were encouraged to consolidate existing debt to be able to get the finance you required which coincidentally took you above the £25,000 limit.
3 These second charge secured loans were called second mortgages but were outside mortgage regulations because only first charge was covered by regulations and because of the £25,000 limit were not covered by CCA
4 As stated before forget the business aspect as in point 2 these loans are not for business purposes and of course business loans are loans not mortgages.
5 Technically mortgages are all regulated after a point in I believe the 80's, see point 3 on what is a mortgage.
6 Self certs I will say again are proving you can afford the mortgage /loan so when you bought a property to live in (not for business again) and you were maybe self employed you would have self certify that you were earning enough. You could self certify a first mortgage hence it would be regulated, you could self certify a loan under £25,000 which would be regulated and after April 2008 and you could self certify a loan above £25,000 which would be regulated (in fact at that point it couldn't be un-regulated because you cant opt out)

7 You are making it far too simple, maybe for a reason?

Well, what can I say? Clearly I'm far too simple I s'pose.

You touch on 'experience', I wonder whether your 'experience' matches mine on this subject?

I am so tempted, so very tempted to say more, but, with respect to you I am more than happy to refrain.

I can see exactly where you are going with this and I admit, I am far, far, far, too experienced to allow You to attempt to undermine my knowledge on an open forum.

I will leave you and the OP with this 'titbit' though:

http://www.legislation.gov.uk/uksi/2...ticle/50A/made

The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005

You have yourself a nice day ; )

[meellis]

Re: Unregulated Secured Loan

You clearly are way to experienced I certainly cannot see a link between un-regulated secured loans and being a self certified sophisticated investor apart from the words self certified. Please nobody else respects me so share your vast experience and actually help the people who come on this open forum for that reason. There are a lot of people trapped in the same position as the OP who need guidance and you are indicating that you have some so please share.

[Brandy1234]

Re: Unregulated Secured Loan

You clearly are way to experienced I certainly cannot see a link between un-regulated secured loans and being a self certified sophisticated investor apart from the words self certified. Please nobody else respects me so share your vast experience and actually help the people who come on this open forum for that reason. There are a lot of people trapped in the same position as the OP who need guidance and you are indicating that you have some so please share.

I have shared.

It is here for you, the OP and for all those people you speak of, trapped in the same position to follow through.

You have a solicitor and Tom Brennan who you can turn to moving forward.

I can assure you, once you get your heads around it, it is really quite simple.

What I can say, quite openly and without fear is, IDEM would not be getting any money from me, regardless of whether they are registered with the FCA as a trading name of Paragon or not..

[meellis]

Re: Unregulated Secured Loan

I have turned to people to move forward personally but haven't received replies, probably busy.