England and Wales Property Law

Mortgage lending in the UK is very strict. Usually limiting peoples

potential to borrow to one sizeable loan secured on one property.

However there is a grey area in that customers sign a written

declaration saying they have no other mortgages. Or indeed loans

secured against there property. Please could someone point out, the

point of law, with cases that these mortgage lenders are upholding. Or

at least give some law sites, that are applicable. Some clarification

would be appreciated.

When juggling fiancees, its tempting to

utilise your status to the utmost.Therfore by having a intimate

insight to property law ,will allow me to find a better lender!



2 thoughts on “England and Wales Property Law

  1. Dear axil221-ga,

    When completing an application for a mortgage you are asked a number

    of questions. You then normally sign a declaration with words to the

    effect that it is true. I have copied below extracts from a couple of

    such declarations which appear on mortgage applications (selected at

    random), but the existence of a warning is not required for the

    offence to be committed.

    If you knowingly do not supply correct information then the lenders do

    not know your true financial position. If they do grant you a mortgage

    then you could render yourself open to civil action and / or criminal

    charges. You will note in the extracts below there is threat of making

    good any losses. The main criminal offence involved is Obtaining A

    Money Transfer By Deception, Contrary to Section 15A Theft 1968.

    The Act appears here.

    http://www.lawteacher.net/Criminal/Property%20Offences/TA%201968.pdf

    This is from the Criminal Prosecutions Service guide to charging

    standards which specifically refers to mortgage fraud.

    ?Obtaining A Money Transfer By Deception – Section 15A Theft Act 1968

    (As Amended By Theft (Amendment) Act 1996, Section 1.

    Specimen Indictment (Indictment Precedent Manual)

    Definition (Archbold, 21-213).

    Unlike obtaining property by deception and theft, you do not have to

    prove intent permanently to deprive. (It is likely that such an intent

    will be involved, however.)

    The transfer is usually done by:

    Cheque; or

    Telegraphic transfer; or

    Clearing House Automated Payment System ("CHAPS") order

    In some cases e.g. a mortgage loan, the advance may be paid into the

    account of a third party (e.g. a solicitor acting for the building

    society) for onward payment to the vendor of the property. This does

    not affect the wording of the charge.?

    http://www.cps.gov.uk/legal/section8/chapter_a.html

    Examination of a Case Stated

    ?A mortgage fraud typically involves the obtaining of an advance,

    usually to enable the purchase of real property, by the making of

    false representations about the borrower's earnings, job or indeed any

    fact which may be material to the lender's decision to lend on the

    security of the relevant property. Mortgage fraud is more than merely

    "anti-social" conduct; yet until recently, this sort of behaviour was

    considered to be outside the clutches of the criminal law, at least

    when committed by one person. This state of affairs was of particular

    concern to banks, building societies and other lending institutions,

    who were often the victims of such "non-criminal" fraud. From a moral

    perspective, however, mortgage fraud is no less deserving of

    reprobation than other forms of obtaining of goods or services by

    means of deception, the latter already being covered by the Thefts

    Acts, 1968 and 1978. ?

    http://webjcli.ncl.ac.uk/1997/issue2/clements2.html

    The scale of seriousness depends on the extent of the deception,

    whether it is organised and involves several persons, and the attitude

    of the lenders. These are two examples.

    http://news.bbc.co.uk/2/hi/uk_news/wales/4352174.stm

    http://www.sfo.gov.uk/news/prout/pr_365.asp?id=365

    Mortgage self-certification has recently been crticised; you may wish

    to see the comments made in this articles on failure to reveal full

    information or to tell lies.

    http://news.bbc.co.uk/1/hi/business/3478635.stm

    http://www.fool.co.uk/news/Comment/2003/c031029d.htm

    http://www.myfinances.co.uk/property/self-cert-mortgage-branded-dangerous-lending-$2880400.htm

    ?Be honest with your broker. They will carry out a 'fact find' to

    establish your financial position. Do not be tempted to overstate your

    income or downplay existing debts or other financial commitments.

    Remember that it is a criminal offence to lie about your income on a

    mortgage application form.?

    http://www.financedition.com/journal/2005/09/11/10-uk-broker-tips

    Extracts from application forms.

    ?The information given in this application is true to the best of my

    knowledge and belief and should the mortgage be made such information

    must be regarded as forming part of the terms of the mortgage. If any

    such information is incorrect I will make good any loss which you may

    suffer by acting in reliance on such information. I have read and

    understood the above declarations and the declarations in sections E

    and G. I understand that a false declaration will forfeit any mortgage

    offer.?

    http://www.scottishwidows.co.uk/documents/lifetimemortgage_application.pdf

    ?I agree that, if I have given any information (or if any information

    has been given on my behalf) which I know to be incorrect or which I

    have not checked and which is subsequently shown to be incorrect, I

    will pay all reasonable fees, expenses and costs incurred by the

    Society in connection with processing this application and any

    resulting loan.?

    http://www.norwichandpeterborough.co.uk/gibraltar/pdfs/SHL003.pdf

    ?The information in this application is true to the best of my/our knowledge and

    belief and should the mortgage advance (?the Mortgage?) be made such

    information will be regarded as forming part of the terms of the Mortgage. If

    any information is incorrect I/we will make good any loss which the Lender may

    suffer by acting in reliance upon any such information.?

    http://www.metrofinance.co.uk/mortgageapps/Capital_Home_Loans_BTL.pdf

    I hope this answers your question. If it does not, or the answer is

    unclear, then please ask for clarification of this research before

    rating the answer. I shall respond to the clarification request as

    soon as I receive it.

    Thank you

    answerfinder

  2. frde-ga,Thanks for sticking up for me!,the whole subject is a delicate

    matter and deserves the benefit of the doubt.If and by the sound of it

    you are, familiar with the grey areas I am referring to in my original

    question,I would appreciate you enlarging on your statement "use a

    real building society such as the Nationwide",as opposed to not using

    a real society?

    Your comment was usefull,it reminds me of when I had a mortgage in

    1988 .It was tough and I had to sell the house.From this I know my

    limits and dealing with large amounts of money requires a whole new

    frame of mind to have a chance!

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