Reduction in your Mortgage
In the event of a successful win, the current balance of your mortgage could be cleared and the charge on your property released. If this is the only result, you will, however, have a liability to your appointed panel law firm under the CFA agreement. If you are unable to settle this liability from your existing funds, a new mortgage or loan may need to be arranged during the settlement process and a new charge registered with HM Land Registry.
Mortgage Repayment Refunds
In addition to the possible reduction or clearance of your mortgage, your panel law firm may negotiate with your lender for a refund of mortgage repayments you have made from:
a) The point when your mortgage was securitised.
b) Inception, if the MCOB’s breach deems the contract void.
c) With the statutory interest surcharge calculated at 8% on the interest portion paid
If any payments are refunded, the amount would be classed as a benefit to you.
In addition to all the above, should the matter go to court and the case is won, the court may award both actual and compensatory damages, together with legal costs and related matters against the lender. It is important to understand that any award of costs, is outside the terms of the CFA. In other words, please be aware that if the panel law firm’s costs/expenses, plus your third party disbursements, are recovered from the other side, you will still be liable for the 25% + VAT CFA payment, however, the value will only be based on the net benefit to you. This is due to the costly risk that the law firm takes, should the matter be unsuccessful, which is normally covered by an After the Event (ATE) insurance policy.
The proposed MSC is the first of its kind in the UK and therefore has not yet been tested in court. While we are confident that, with our experience and expertise of mortgage securitisation matters, you may have a very strong case, there are no guarantees that the lender will negotiate a settlement or, that the Courts will find in your favour.
You should consider whether you wish to take your Mortgage Securitisation Claim (MSC) to its final conclusion, or not. If not, your only benefit from the Validation Process may be the knowledge that your lender has sold your mortgage and that the new owner may be in a position to impose new terms and conditions and determine interest rates in the future, or not.
What happens if you lose in court?
Prior to any Court action, your solicitors would be required arrange a special Insurance Policy called After the Event Legal Expenses cover.. This provides full indemnity for your own disbursements and the oppositions legal fees, court fees etc. There is no possibility that you will be asked to contribute anything, should you lose the case.
What happens if the third party investor your mortgage was sold to tries to claim against you in the future?
This is highly unlikely as, in the event of a win, it would have already been proven that no paperwork exists that links you to any third party. However, in order to reduce any financial risk of any dispute or court action, if the basis of settlement requires it, a 'Before the Event' Legal Expenses insurance policy, may be taken out at your or your law firm’s expense. This policy will be in your name, which ensures that, if at any time in the future, the party to whom your lender had sold, transferred or assigned your mortgage to, claims ownership of the debt, then sufficient funds will be available under the six year BTE policy, to pay your legal defence costs incurred in defending the action. You will NOT have to contribute any money.
We would advise that you MUST continue to pay your mortgage until such time as you are advised by your panel law firm to stop payments or, your MSC has a successful outcome, otherwise, you may find that your lender places you into default prior to any action, which could jeopardise your MSC.