Q&As

Where a Consumer Credit Agreement loan has been made before 2010 and secured on land, and the lender seeks to vary the agreement but uses a non-compliant modifying agreement, is the loan unenforceable or unenforceable without a court order?

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Published on LexisPSL on 13/05/2021

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • Where a Consumer Credit Agreement loan has been made before 2010 and secured on land, and the lender seeks to vary the agreement but uses a non-compliant modifying agreement, is the loan unenforceable or unenforceable without a court order?
  • The transfer of regulation of most regulated credit agreements secured on land on 21 March 2016
  • If the regulated credit agreement is secured on land and the modification or variation takes place on or after 21 March 2016
  • If the regulated credit agreement is secured on land and the modification or variation takes place before 21 March 2016 but on or after 6 April 2007
  • Why would the modifying agreement be unenforceable without a court order?

Where a Consumer Credit Agreement loan has been made before 2010 and secured on land, and the lender seeks to vary the agreement but uses a non-compliant modifying agreement, is the loan unenforceable or unenforceable without a court order?

The transfer of regulation of most regulated credit agreements secured on land on 21 March 2016

On 21 March 2016, the UK implemented the Mortgage Credit Directive 2014/17/EU (EU MCD) by the making of the Mortgage Credit Directive Order 2015 (MCD Order), SI 2015/910. The broad effect of the MCD Order, SI 2015/910 is that if an agreement is a ‘consumer credit back book mortgage contract’ under MCD Order, SI 2015/910, art 2(1) then, on 21 March 2016, it transferred out of consumer credit regulation and into mortgage regulation subject to transitional provisions in MCD Order, SI 2015/910, art 29.

If the regulated credit agreement is secured on land and the modification or variation takes place on or after 21 March 2016

If a regulated credit agreement secured on land and entered into before 2010 was therefore modified or varied on or after 21 March 2016, it is likely (so long as the agreement satisfies the definition of a ‘consumer credit back book mortgage contract’) such a variation or modification must follow the rules set out in the Mortgages and Home

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