Financial Claims - Court Over Turned Ruling To Write Off £40,000 Debt.

Judges at the Court of Appeal have overturned a decision by a county court judge to write off a couple’s £40,000 debt, in what has been described as an important case which will affect many other claims.

The Cheshire-based claimants, Michael and Suzanne Walker, took out a £17,500 secured loan with Southern Pacific Personal Loans in 2005, but later fell into arrears, with the debt eventually reaching £40,000.

Facing repossession, they sought to get the £40,000 debt written off on the grounds that the credit agreement was unenforceable.

In April of this year, county court Judge Halbert ruled the credit agreement unenforceable and ordered the lender to drop the charge against the Walkers’ property.

However, Lord Justice Mummery at the Court of Appeal said that the ruling had brought on a “spate” of consumer credit litigation, with Southern Pacific Personal Loans facing a number of similar claims from its other borrowers.

The decision was overturned and what would have been a windfall for the Walker couple is now looking more like a further £100,000 of debt, as they’re hit with legal costs from the loan company as well as the threat of losing their home again.

Judges maintained that consumer credit law is complicated and that the county court Judge Halbert had “got it wrong.” They added that the result “will affect other cases in the current spate of consumer credit litigation and potentially many other credit agreements”.

Equity Release Mortgages - Prudential Withdraws From the Market

The insurer will stop writing new lifetime mortgage business but it has pledged to continue to service its 14,000 existing customers. It hopes to redeploy the 100 affected staff to other parts of the business.

Prudential is to withdraw from the equity release mortgage sector in the first quarter of 2010 after deciding to deploy capital to other parts of its business.

Mortgage Broker Jailed for 11 Years and Banned by FSA

The Financial Services Authority has banned mortgage broker Rashid Farid, after he was jailed for eleven years for conspiring to commit fraud.

Farid committed the fraud whilst trading at Lifestyle Mortgages. He submitted a number of false mortgage applications through Lifestyle Mortgages in 2007 to a lender, using genuine details but without the owners’ knowledge, or after fraudulently altering the details of owners held by the Land Registry.

As a result of his actions, the lender suffered substantial financial losses of £787,050.

Combatting Cash Flow With Invoice Factoring

We have found a great article on PR web the on-line news agency that discusses how invoice factoring and invoice finance can offer business the working capital life line they need.

Business owners should take a look invoice finance may be a suitable solution for your business funding requirements.

Last Self Cert Mortgage Lender Stops Lending

Beacon Home loans the last self cert residential mortgage lender operating in the UK has today announced that it will stop all new mortgage lending.

All business must be in with the lender by Friday the 13th November 2009 and no new mortgage offers will be issued by Beacon Home Loans after close of business on Friday 27th November.

Beacon’s current mortgage asset purchase arrangements, which have enabled Beacon to lend around £2bn, will come to an end in February 2010.

CIT Group Performs Pre-Pack Administration

CIT Group has filed for bankruptcy after attempts at a restructuring or a bail-out failed. This is one of those pre-packaged corporate bankruptcies, from which it will re-emerge reorganised, and with a new management team.

The operating companies themselves, such as CIT Bank, and international operations will not be involved in the bankruptcy filing, and letters have been sent out to customers and suppliers by CIT to assure them they will experience no disruption of service.

Who will be the losers in this bankruptcy then, at this stage it is hard to know, although it has been reported that the US government can wave goodbye to its $2.3 billion rescue capital injection, unless there is a significant and sudden surge in CIT’s share price after the pre-pack.

Asset Based Factoring and Overdraft Survey

In a recent survey to business owners and Directors about how their business was funded and whether or they felt comfortable with their current banking relationships. 33% said they were unhappy with their current bank relationships.

20% said that they were currently in negotiations with other banks. 10% had already moved providers already this year. 37% where neither impressed or unimpressed by their current banking relationships

Asked how their business is currently being funding the following was reported. 22% where being funded by Overdrafts, and had not experienced problems.

28% where being funded by overdrafts, however, their providers had in some way reduced the credit available or where having problems.

8% of Businesses asked had had their overdrafts facilities completely removed by the banks in question

42% of businesses asked reported that they where using asset based factoring solutions. With 9% of which stating that obtaining credit insurance on their customers had posed problems to them