The point regarding the ‘right to redemption’ being lost; was to do with the fact that once the receivers had sold the property, Mrs Beech was not left in a position to sell the property herself; so as to exercise an ‘equitable right to redemption’.. which is what most mortgagors seek to do; i.e the right to redeem the debt themselves by either re-mortgage, sale of the house etc. Likewise, there was no longer any equitable right to redeem the mortgage, because the property had been sold literally ‘over her head’ and for all intense and purpose without her knowledge… this meant that MJ Briggs could not look to rely on any protection for Mrs Beech under the equitable maxim of redemption either ….. also based on the fact that she was in default of the mortgage terms and conditions at the time of the sale.

Suzanne, I think I understand where you are coming from, you are saying that if there was equity in the property at the time of the sale, say of £2k…. when it was sold by GMAC, it would appear that Ms Briggs lost that £2k at the time of the sale? I think your way of thinking is spot on.. she lost it. Had she not been in default at the time of the sale, M J Briggs may have come to a different conclusion in order to protect not only her right to her home, but also her right to the equitable gains built up over the years in the property. I think you make an interesting point. Being in default of mortgage payments seems that not only your human right is affected but also all right to your home to a lender such as GMAC, who themselves are not a conventional mortgage lender, they literally only give homeowners funding against their homes for pure investment purposes, with the intention of selling your home on firstly to investors (undercover of course); then on the open market for an additional profit. I was one of the lucky ones, I re-mortgaged away from them years ago!

I don’t think I can put it much clearer than in the comment above. Equity of redemption is the right to recover ownership once a mortgage liability is paid off. It has nothing to do with ‘equity’ in the sense of the sale value of the property over and above the mortgage liability.

I’m wondering which un-named lawyers they found to respond with ‘astonishment’, certainly not any who deal with property litigation – we were somewhat surprised to se this used on a residential mortgage, but it happens all the time with BTL. The FT also manages not to mention that it is a contractual point – the power to appoint receivers was in the mortgage agreement, as was the power of sale, although s.101 LPA 1925 would also confer that. And, while I’m getting all aerated, the Court most certainly didn’t suggest that the mortgagors ‘lost their equity when they fell into arrears’. The Court said – old old law this – that the equity of redemption is extinguished when a contract for sale is made. It doesn’t mean the mortgagor wouldn’t get any left over ‘equity’ in terms of the proceeds of sale, it means that their right to the ownership of the property once the mortgage is paid off is extinguished once a contract for sale is made (not when they enter arrears).

Honestly, these slow, dim and inaccurate journos…

One of my professional joys is fighting the ‘sub prime’ / ‘off high street’ lenders in mortgage possession cases. The argument that usually gets them rushing to settle is one based on the Unfair Terms in Consumer Contracts Regulations 1999.

J

I agree that the reliance on Quazi means that the decision is, to some extent, out of date. I suspect you are right that there will be further challenges.