Mortgage Funding 08-01
RE: Mortgage Funding 08-01
NOTICE TO NOTEHOLDERS
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF NOTEHOLDERS. IF NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD SEEK THEIR OWN FINANCIAL AND LEGAL ADVICE, INCLUDING AS TO ANY TAX CONSEQUENCES, IMMEDIATELY FROM THEIR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL OR LEGAL ADVISER.
RE: Southern Pacific Personal Loans (SPPL),
Southern Pacific Mortgage Ltd( SPML),
Preferred Mortgages Ltd (PML)
Capstone Mortgage Services Ltd/ Acenden Mortgage Services Ltd
RE: Marble Arch Res No.4
IMPORTANT NOTICE TO ALL HOLDERS OF THE FLOATING RATE NOTES
Issued by THE BORROWERS whose loans have been securitised through Marble Arch Res No.4 (the “Issuer”)
The Borrowers wish to inform all Noteholders that the Mortgage and Cash/Bond Administrator Capstone Mortgage Services Limited has been involved in the following activities which have substantially and adversely affected the Issuer’s ability to pay in full interest due on the Notes, as and when interest and payments become due.
Capstone Mortgage Services have been and are currently deliberately engineering their own substantial profit stream from many of the 80000 accounts it administers at a loss of revenue to the Issuer and consequently to the Noteholders.
This is and has been achieved by the willful mistreatment of borrowers who signed up to Southern Pacific Mortgage Loans Southern Pacific Personal Loans & Preferred Mortgages Limited.
Such mistreatment takes many forms (detailed below) but essentially acts as a considerable source of revenue for Capstone Mortgage Services.
The practices of Capstone Mortgage Services are purposefully designed to ensure that borrower’s accounts (as quickly as possible) are placed into arrears whereupon they can inflict their charging regimes and commence their revenue stream at great cost to both the borrowers and consequently causing cumulative and catastrophic shortfalls in the ability of the Issuers to pay the Noteholders their due amounts on the due dates.
These practices are as follows:
(a) alleged none payment where payment has been tendered;
(b) alleged late payment where payment has been tendered upon date due;
(c) falsely alleged shortfalls in payments;
(d) failure to change payment due date to reflect that not all consumers are paid on regular dates or even the same date as collection is deemed due;
(e) false entries onto consumer accounts regarding alleged failed payments;
(f) failure to correct such entries after complaint and charge compound interest thereupon;
(g) failure to amortize the debt with payments made over and above the interest due, thus creating a higher level of compound interest over the term of the mortgage and increasing over time the likelihood of default;
(h) routine monthly access to and entry upon consumers credit reference files, thus making it more difficult for consumers to switch product and thereby clear their liability
(i) Unlawful and punitively raised charges with no prior notification of their application; compound interest applied thereon;
(j) In litigation, failure to seek possession only as a last resort; failure to serve documents upon the defendant; failure to offer to capitalize genuinely constituted arrears; failure to accept temporarily reduced payments without inferring delinquency; failure to accept payments from customers in arrears where the full alleged arrears is not tendered, failure to refund unlawfully applied charges and compound interest applied; failure to waive charges where a performing arrangement for arrears clearance is in place;
(k) In suspended cases, the application of charges without notice in excess of the overage paid by consumers to clear their arrears; misrepresentation to the courts that such arrangements will clear the arrears when typically they will not, as a consequence of yet further charges disguised with various nomenclature as arrears management fee, litigation fee, arrears interest, interest charged and so on;
(l) Willful exaggeration of the consumer’s genuine level of arrears, which may be typically half of the overall total claimed.
(m) Falsely adding block building insurance to your mortgage account when in receipt of mortgagor’s own building insurance. Then instead of refunding the payments – the monies are used to reduce manufactured arrears on the account.
Once the goal of forcing an account into arrears is achieved or the borrower has encountered genuine difficulties due to sickness or changes in employment status (e.g. full time to part time) the following charges, by far the highest in the whole Industry, are applied.
Monthly Collection / Arrears Management Fees
Late Payment Management Fee: £25.00 (per occurrence)
Arrears Management Fee £85.00 (per month)
Litigation Management Fee: £115.00 (per month)
Repossession Management Fee: £115.00 (per month)
Capitalisation of Arrears Fee £65.00 (per occurrence)
Failed Payment Fee £9.00 (per occurrence)
Referral to Solicitors Fee £50.00 (per occurrence)
Property Pre-market Fee £250.00 (per occurrence)
These charges which Capstone’s own regulators the F.S.A. have stated should only cover the real costs of administration fees and not be used as a profit stream are taken directly from the borrowers’ repayments before the repayments are transferred to the Issuer, substantially and adversely affecting each of the the Issuers ability to pay in full interest due on the Notes.
Extract from the Regulatory Framework
Mortgage Conduct of Business rules (MCOB)
(1) A firm must ensure that any regulated mortgage contract that it enters into does not impose, and cannot be used to impose, a charge for arrears on a customer except where that charge is a reasonable estimate of the cost of the additional administration required as a result of the customer being in arrears.
(2) Paragraph (1) does not prevent a firm from entering into a regulated mortgage contract with a customer under which the firm may change the rate of interest charged to the customer from a fixed or discounted rate of interest to the firm’s standard variable rate if the customer goes into arrears, providing that this standard variable rate is not a rate created especially for customers in arrears.
The imposition of a charge for arrears on a customer who is adhering to an arrangement under which the customer and the firm agree that the customer will make payments of a set amount per month (or other agreed period) on agreed dates may be relied upon as tending to show contravention of MCOB 12.4.1R (1)3
When a customer has a payment shortfall in respect of a regulated mortgage contract, a firm must ensure that any payments received from the customer are allocated first towards paying off the balance of the shortfall (excluding any interest or charges on that balance,)
A firm may calculate the same level of arrears charges for all regulated mortgage contracts where the customer is in arrears, rather than on the basis of the individual regulated mortgage contract with the particular customer.
Firms are also subject to requirements on information provision and standards relating to arrears and repossessions (see MCOB 13 (Arrears and repossessions)).
MCOB 13.3.1 Rule25/06/2010
(1) A firm must deal fairly with any customer who:
(a) is in arrears on a regulated mortgage contract1 or home purchase plan;
(b) has a sale shortfall; or
(c) is otherwise in breach of a home purchase plan.
(2) A firm must put in place, and operate in accordance with, a written policy (agreed by its respective governing body) and procedures for complying with (1). Such policy and procedures must reflect the requirements of MCOB 13.3.2A R and
2 A firm must, when dealing with any customer in payment difficulties:
(1) make reasonable efforts to reach an agreement with a customer over the method of repaying any payment shortfall or sale shortfall, in the case of the former having regard to the desirability of agreeing with the customer an alternative to taking possession of the property;
(2) liaise, if the customer makes arrangements for this, with a third party source of advice regarding the payment shortfall or sale shortfall;
(3) allow a reasonable time over which the payment shortfall or sale shortfall should be repaid, having particular regard to the need to establish, where feasible, a payment plan which is practical in terms of the circumstances of the customer;
(4) grant, unless it has good reason not to do so, a customer’s request for a change to:
(a) the date on which the payment is due (providing it is within the same payment period); or
(b) the method by which payment is made; and give the customer a written explanation of its reasons if it refuses the request;
(5) where no reasonable payment arrangement can be made, allow the customer to remain in possession for a reasonable period to effect a sale; and
(6) not repossess the property unless all other reasonable attempts to resolve the position have failed.
The requirement in MCOB 13.3.1 R(2) for a written policy and procedures is intended to ensure that a firm has addressed the need for internal systems to deal fairly with any customer in financial difficulties. MCOB 13.3.1 R(2) does not oblige a firm to provide customers with a copy of the written policy and procedures. Nor, however, does it prevent a firm from providing customers with either these documents or a more customer-orientated version.
In complying with MCOB 13.3.2A R, a firm must give a customer a reasonable period of time to consider any proposals for dealing with the payment difficulties.
There is documentary evidence available that Originator/Lenders have deliberately ignored their own stated lending criteria and M.C.O.B. Rules concerning affordability in order to provide loans for the mortgage pools for which they have been paid by the Issuer and which have then failed.
Payments have been apparently made on a large scale of the relevant Bbrrowers repayments into the incorrect Issuers accounts with potential serious tax and accountancy problems and consequent losses to the rightful noteholders
Queries may be addressed to the BORROWERS as follows:
This Notice is given by the Borrowers 26th August 2010 at 16:00 BST.