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Why Does my Mortgage Have a Power of Attorney

What is the Problem?

This one comes from Joanne in Cumbria. She says. “I have found a Power of Attorney clause in my mortgage conditions which I knew nothing about. Why does my mortgage company need a Power of Attorney? That’s is an excellent question and frankly the answer is not a short one so make yourself a nice cuppa and get ready while Simon answers this tough nugget of a question.
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About the Presenters

Simon Goldberg

Simon, began his working life with Messrs. Coutts & Co, bankers to the Queen. During a career which has, thus far, spanned 29 years, Simon has served time as a Bank Manager, Financial Adviser, and General Manager of a major UK Broking Firm, which later became London Scottish Broking. A Certified Mortgage Specialist, Simon set up his own broking firms in late 2002... Find out more about Simon

Your hosts - Mark Moxom and Alain Braux

Mark Moxom

Mark is a multiple best selling author on food, health and business. He has had decades of experience in natural health and is an outspoken advocate of natural nutrition and drug free living. He's also the founder and executive editor of Low Carb Mag. More about Mark

The Rest of The Story

You and your Cash Help Sheet

Click image for help sheet as a PDF

Your Due Diligence

Before signing anything, you should always know what it is you are signing, and all the implications of each of the clauses [claws].
Generally speaking, the power of attorney clause is something that should have been highlighted and explained by the Bank’s sales advisor, the broker and or a solicitor, before you applied; and therein lies a problem.
How can an independent solicitor actually know what the power of attorney is actually going to be used for? All the solicitor can really do is relay what he/she has been led to believe about the use(s) of the power of attorney which, in turn, may or may not be accurate.
The solicitor has no first hand material knowledge.

The Outline Solution

  • If you are concerned and wish to discover what the mortgage company has actually done (executed) in your name, then you can write to your mortgage company and ask them.
  • The mortgage company should be able to identify the person with control of the power of attorney, and in turn, this person should know what has been executed in your name

Possible Arguments Against You

  • We have noted that some mortgage companies are refusing to divulge what has been executed in your name.
  • The Financial Ombudsman Service has, on many occasions, refused to even consider complaints regarding the power of attorney clause, citing a lack of ‘legal qualification’, as their (FOS) reason not to get involved.
  • This means that borrowers can often be left with nothing more than potentially expensive court action just to uncover the answer. Yet the answer itself, should have been discussed and made clear up front, prior to the mortgage application.

The Almost Legal Info

  • The power of attorney clause places a duty of care upon the Bank, and more specifically, the member of staff controlling it.
  • This means that you may have a cause of action if the power of attorney has been abused.
  • Most mortgage companies claim that the power of attorney clause is required to enable them to enforce the mortgage against you (the borrower), but this is only a small fragment of the overall story.
  • Even more worrying: some mortgage companies have claimed that all members of staff are able to operate with, by and or under the power of attorney, which raises question marks as to ‘reasonable care’.

Helpful Paragraphs:

If you feel aggrieved and or find yourself unable to obtain answers from the bank or mortgage company, you should seek independent legal advice, which may ultimately result in some kind of action to require that the facts you seek, be placed before the court. But this can cost.

Rather than approach a solicitor, who in turn, then refers you to a barrister; you may find it more cost effective to consult a barrister under the direct access scheme.

The direct access scheme removed the need to be referred to barristers via a solicitor, reducing potential costs.

If you seek independent legal advice, always be sure to have the legal professional put his/her advice, in writing, and have them sign their name to it. Do not accept anything less, than a letter signed in the following style:

  1. Signature
  2. NAME
  3. Position
  4. Company Name/Partnership Name

Need More Help?

YAYC have invested a great deal of time investigating this very specific issue, and more relating to mortgage products. If you would like to see what we have discovered, and or learn some techniques that have already resulted in large sums being wiped off mortgage balances, then get in contact.

If you would like to learn more, and gain access to more in depth knowledge on the subject, simply email info@YouAndYourCash.Com

 

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