A recent appeal court case may prompt lenders to evict defaulting mortgagors sooner rather than later, says Sarah Greer
The recent Court of Appeal decision of Ashe v National Westminster Bank plc [2008] EWCA Civ 55, [2008] All ER (D) 128 (Feb) sent a collective shiver down the spines of mortgage providers already feeling the impact of the current credit crunch. Although Mummery LJ made it clear that the practical implications of the decision were “in danger of being exaggerated”, it will undoubtedly cause lenders to look again at their policies on obtaining possession of properties from defaulting mortgagors.
In 1989, the Babais granted a second legal charge over their home in Stockport to the National Westminster Bank (the bank) to secure Mr Babai's liabilities on his accounts with the bank. There was already a first mortgage on the property with the Halifax. Under the terms of the agreement, the bank had an immediate right to possession of the property, and this was not restricted under the agreement or reliant on any default in payment by the mortgagors.
The
