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.