Mortgage Muerte

Question 1

What is a mortgage?

Answer 1

• A secured loan against the land; a charge over property

Question 2

[Essay] Post-market-crash, how have bank practices changed?

Answer 2

Regulatory reform = Agreements between banks

Bank will now check your income, financial outgoings, debts to prove you can pay your mortgage

Before, one just had to declare income

Question 3

[Essay] What else has changed after the financial crash?

Answer 3

• Only policy changes that most banks have agreed to comply with
• Mortgagors Code of Borrowing (MCOB)

Question 4

What factors affect the interest attached to your loan?

Answer 4

• Your credit rating + Bank’s risk appetite

Question 5

Lenders can take your house without you defaulting and without warning

Answer 5

• – Horsham —
• – Ropaigealach —

BUT banks will likely choose not to, especially if value of your house is below the loan + they stand to gain from you paying loan and interest

Question 6

Explain overriding interests and, conversely, overreaching.

Answer 6

• – Overriding interests —
  1. When a beneficiary exercises his equitable interest to override a trustee’s decision (to sell, etc)

2. Usually, ‘actual occupation’

• – Overreaching —
  1. When 2 or more trustees engage in the decision, hence overruling beneficiary’s interest

Question 7

What can count as ‘actual occupation’?

Answer 7

• – Strand Securities v Caswell —
  1. Licensee cannot be taken as a representative occupier for licensor

2. Licensee must hold prop right himself to be in ‘actual occupation’ in his own right

• – Abbey National Building Society v Cann —
  3. Caretaker/Representative of a company can occupy on behalf of employer (NOT licensee)

4.Furniture in house is taken to be ‘preparatory steps’ and not actual occupation

Question 8

When/What period can be counted as ‘actual occupation’?

Answer 8

— Abbey National Building Society v Cann —
1. From date of completion of transaction, NOT registration
• Transfer of property and grant of charge are ONE TRANSACTION
• For pre- or during-acquisition charges

• – Link Lending v Bustard —
  2. No single test for time, but relevant factors are:
  (a) Degree of permanence and continuity of presence of person
  (b) Person’s intentions and wishes
  (c) Length of absence from prop and reason(s)
  (d) Nature of property
  (e) Person’s circumstances

Question 9

How to prove ‘actual occupation’?

Answer 9

• Under Sch 3 para 2 LRA 2002

1. Proprietary interest: Think of purchase price/CTs
2. Actual occupation
   • Reasonable inspection objective test: Boland (‘matter of fact’)
   • Lender should investigate further and take all reasonable further steps to absolve self from liability: Kingsnorth Finance v Tizard (lender failed to take steps; inspection at pre-arranged time)

Question 10

What is ‘priority of interests’?

Answer 10

• Usually, first charge attached to a prop should be enforced over others: S48 LRA 2002
(e.g. if you take a mortgage from A and another from B, then need to deal with mortgage from A first)

— Scott v Southern Pacific Mortgages Ltd —
• D’s mortgage came before C’s claim to actual possession (but also, agency lost the right to grant her a tenancy by making the deal with D)