A High Court judge has sided with mortgage companies in a test case concerning sale and leaseback schemes operated by North East Property Buyers Ltd (NEPB).
HH Judge Behrens, sitting as a deputy High Court judge in
One of those issues was whether sale and leaseback arrangements between nine tenants, who had previously owned their homes, and NEPB bind the mortgage lenders to NEPB as “overriding interests” under the Land Registration Act 2002.
The tenants claim that NEPB had promised that they could stay for as long as they wanted or for life and that most of them were unaware that the purchases were being funded by mortgages.
NEPB has since defaulted on the mortgages and the lenders are seeking possession against the tenants.
The judge said that any rights the tenants had been promised as part of the equity release scheme could not take priority over the legal mortgages that bind them.
He said: “Both the occupiers and the mortgagees assert that they are the victims of a massive fraud. The mortgagees assert that representations in the mortgage applications were untrue; the occupiers assert that the whole scheme was a fraud on a vulnerable section of society.”
NEPB is being investigated by
So far, more than 20 people have been arrested and interviewed – the police hope to be in a position to bring charges by May 2011.
