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Mortgage Repossession: A Corporate Defeat

A recent decision at Banff Sheriff Court in the case of OneSavings Bank v Burns [2017] SC BAN 20 saw the Defender successfully rebuff a court action for default in respect of a standard security (or mortgage) held by the Defender.

The Pursuer contended that they were assigned a mortgage which had been granted by the Defender. The case was complicated insofar as it involved assignations of multiple securities between two lenders in so-called ‘mortgage portfolio’ sales. (Eerie shades of the ‘Collateralised Debt Obligations’ and other securities-bundle arrangements existing in the financial markets pre-2008? Hopefully not).

It was successfully argued on behalf of the Defender that the assignations were invalid, since they did not conform with the statutory model under the Conveyancing and Feudal Reform (Scotland) Act 1970 act. Therefore the Pursuer did not have title to sue. Whereas it was argued that the assignation made the security cover all sums due to the Pursuer, it was held that the security was only for the sums outstanding at the date of assignation.

Crucially, the style assignation used in this case is said to be relied upon by several lenders, meaning that the implications of this decision may be far-reaching. Moreover, the decision is a further setback to the kind of insider dealings that put financial gain over consideration of the customer’s interests. The decision arguably serves to reduce the disparity in power in the relationship between financial institution and individual.

If you would like to discuss defending against repossession, please feel free to contact McCarthy Law on 0141 337 6678, or via e-mail: