Sunday, Nov 01, 2009

An interesting article we seemed to have missed

BBC: Five-year block on repossession

Welsh carpenter wins a 5 year stay on repossesion and his house can only be repossessed by the secured lender if he is more than 12 months in arrears after that period in exchange for withdrawing his argument that there had been an unfair relationship under the 1974 Consumer Credit Act, and in exchange for agreeing not to pursue that legal argument against the company the finance firm agreed.

Posted by enuii @ 11:16 PM (1360 views)
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1. drewster said...

Looks like a one-off exception, rather than setting a precedent. Any lawyers care to comment?

Sunday, November 1, 2009 11:46PM Report Comment

2. gone-to-colombia said...

Law is my original profession, though, not consumer law. I suspect that this will not set a precedent.
I am inclined to think that virtually nothing will stop the tidal wave of repossession that is to come.

Monday, November 2, 2009 12:27AM Report Comment

3. Johnny5thumbs said...

Smell suspiciously like a press release on behalf of the debt advisory industry - they need some good press at the moment. I wouldn't necessarily place total credence on the solicitor's position on this one.

Monday, November 2, 2009 12:32AM Report Comment

4. mark wadsworth said...

@ Drewster, I do have an LB degree to my name, so what, that was eight years ago, the government can change the law as it sees fit.

@ GTC, in the long run, you are right, the interesting question is, for how long can King Canute stem the tide? Months? Years?

@ enuii, thanks for this, I shall add it to my Reckless throws of the dice series.

Monday, November 2, 2009 01:02AM Report Comment

5. phdinbubbles said...

Saw this the other day and decided not to post it as I perceived it was a one-off case, but I've got no qualifications in law so I could be talking rot. Strange that the BBC website made a big story out of a small case - what are they hoping for from this? - probably some kind of debt jubilee - or reward scheme for people that are keeping the economy going by taking on huge amounts of debt to keep house prices high - oh, hang on a minute, we've already got that.

Monday, November 2, 2009 07:18AM Report Comment

6. The Baldman said...

The ability to repossess means that loans to buy houses are less risky therefore cheaper...take away that right property becomes more risky and loans to purchase more expensive.

Monday, November 2, 2009 08:38AM Report Comment

7. mark wadsworth said...

For "LB" read "LLB" of course.

Monday, November 2, 2009 10:02AM Report Comment

8. Cheekie Charlie said...

More pent up supply!

Monday, November 2, 2009 10:07AM Report Comment

9. house said...

Hi, MW thank you for your comments on inflation on the Friday's post. It was very reassuring. I know at present you deal with business financial matters including tax returns etc.and nice to see that you have a law degree. I have said this before, we should not worry about any asset prices except inflation prospects. As long as they are within the bounds of 2% to 4% I would be pretty happy and so should everybody else. In the 70's inflation was at much higher levels and survived it but I do not want to go through it again.
Once again thank you as I was not able to thank you on the Friday's post.

Monday, November 2, 2009 11:20AM Report Comment

10. tenant super said...

I concur with MW, laws can be changed. Even a legally binding contract, say for a social housing tenancy, is not as binding as people think because it contains a clause saying the terms of the tenancy agreement can be changed. It is much harder to make a dramatic alteration though ,to terms which would mean the contract is significantly different to when it was agreed.

My limited knowledge is in medical law not consumer law but there may be some parallels. The Bolitho case significantly altered the Bolam test for medical negligence by adding the caveat that the medical consensus had to be logical; there was no change in law but the ratio decidendi set a precendent about the conditions for negligence.

What is interesting here is the argument that "naivety, vulnerability and desperation" have been used as evidence of a "an unfair relationship under the Act". Significant numbers of borrowers could claim naivety and desperation (naivety, desperation and greed were partly behind the bubble). However, I believe most borrowers' situations would not carry the weight of this man's circumstances (being forced to care for a sick parent) in court.

Therefore I do not think this case would set a precendent but I also would not rule out an extension to the governemnt backed Mortgage Rescue Scheme, payment holidays etc. which have the same effect. The moral hazard is incalculable.

Monday, November 2, 2009 11:32AM Report Comment

11. mark wadsworth said...

House, ta, everybody can make up their own minds on inflation-deflation debate. The so-called experts have completely conflicting views, so we might as well ignore them all. I also expect 2% to 4% range, which isn't going to kill us, is it?

Monday, November 2, 2009 12:28PM Report Comment

12. house said...

@8, MW, I am really pleased to see that you expect inflation in the range of 2% to 4% as I do. No, it is not going to hurt us that much. The only slight problem is that it may become difficult to pass on the increases to customers. But then hey, this is why companies are on the cost cutting exercise. We all will have to cut our "cloth" accordingly.
I live in Cornwall. Which county do you live in.
Speak to you again.

Monday, November 2, 2009 12:43PM Report Comment

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