Mortgages and Security Over Land
We advise both borrowers and lenders on the enforcement of security over land. This includes both helping borrowers defend mortgage re-possession proceedings and working with lenders (particularly private equity investors) to enforce registered charges. We also enforce charging orders obtained against debtors.
Enforcement of Security Over Land
It is increasingly common for large loans to be secured against the property of the borrower by way of a legal charge. In other cases someone might be assisting a relative to buy their first home. These charges may require regular monthly payments or payment in full upon a future date or event. They are also sometimes used as part of joint venture arrangements. Legal charges can typically be enforced either by the appointment of receivers or by possession proceedings. Where the charge is over residential property, the borrower has some protection under the Mortgage Repossession Pre-action Protocol, which significantly slows down the process. We have extensive experience in enforcing legal charges and dealing with typical defences that may arise.
Defending Mortgage Repossession
We have acted for a number of borrowers in opposing possession proceedings based on mortgages and legal charges, including a number of very high value claims. In all of these cases we have been able to either successfully oppose the claim or delay progress for significant periods of time to enable the client to raise funds, re-negotiate their lending terms or to leave on their own terms.
We have extensive experience of investigating and running defences based on undue influence, misrepresentation and fraud. We are also sometimes able to challenge the underlying loan, which may not comply with regulatory requirements. Undue influence can arise where, for example, the lending secured was borrowed by the client’s spouse for business purposes and secured over the family home and the client was not adequately advised of the risk by the lender.
Where receivers are appointed, we can examine whether the appointment is legal and advise on the receivers’ obligations to the borrower to, for example, realise a proper price for property. Action can be taken where there is sale at undervalue.
A lender who suffers a shortfall after selling a re-possessed property, will understandably ask questions of the surveyor who valued the property when the money was lent. It may simply be that property prices have dropped, but it could also be because the valuer over-valued the property. Valuation surveyors have a duty to exercise reasonable care and skill, but they are not expected to provide a ‘perfect’ valuation. Anything outside what a competent valuer would consider a reasonable range of values, could be considered negligent. We can advise on the merits of a claim, appoint an expert witness to assess the appropriate valuation range and if appropriate pursue the claim through the courts, if a negotiated settlement cannot be reached.
Mortgage and Fraud
Mortgage fraud is when individuals defraud a firm or private lender through the mortgage process. This is a crime. Providing false details, failing to provide information required by law or knowing that the information used by others, such as the price of a house sale, might be misleading or untrue are all examples of fraud.