Tag archives for SLM Holdings Funding Nº1

Málaga Appeal Court slams SLM for illegal mortgage selling.

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The Málaga Appeal Court has rejected all grounds for appeal brought by SLM (Surrenda Link Mortgages) against the primary ruling by a Court of Instance in Fuengirola.

In the extensive ruling, the Courts bases its decision on 3 main arguments:

a) SLM had no authorization to sell what the judges deemed as a complex financial product made up of a mortgage loan, and a speculative investment vehicle. Not having a license to operate in Spain renders this proposition unlawful, and as such null and void ab initio.

b) The “lender” misrepresented material facts pertaining to the associated investment risks, labelling the product a safe choice to avoid inheritance tax (IHT) but also, a safe (again) bet to achieve an income. This turned out to be false.

c) SLM sold the product through a network of unqualified financial advisors, and a “selected” group of lawyers who, naturally, had zero financial investment capacitation or knowledge.

The high provincial Court rejects SLM’s attemp to fragment the product into a benign mortgage loan and the investment “arm” of the product, confirming that they could no exist without each other in the open market.

The ruling can be appealed by SLM at the Supreme Court, an appeal that would be seen as cruel, unecessary and a mere delay tactic to prevent the inevitable from happening: the invalidation of the mortgage loans on the claimants´ properties and their right to move on with their lives.

SLM Loses Again: Appeal Court reverses Court of 1st Instance Ruling

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The Appeal Court in Malaga has ordered the cancellation of a mortgage loan that was granted in favour of Surrenda Link Mortgages (SLM) on grounds that this company offered loans for investments but also, were linked to the management of the those investments when they were not licensed to do so, in Spain.  The ruling reverses a previous ruling by a Court in Marbella that ruled that SLM was not at fault.

SLM acumulates several adverse rulings, in spite of which they keep insisting that their Turnk Key Mortgage is and was lawful.

The claimant was represented in Court by Salvador Martinez Echeverria.

BILBAO APPEAL COURT UPHOLDS THE ILLEGALITY OF THE SLM MORTGAGES

Photograph: Registro Civil

The Appeal Court in Bilbao has upheld last year’s ruling by the Court of First Instance 11 in Bilbao and determined that  mortgage loans granted by Surrenda Link Mortgage (SLM) to invest with Premier Group should be declared null and void.

The appeal ruling confirms that operating without a license is a grave infringement of one mandatory regulatory framework of great importance: the financial services sector. As a result, they order the maximum possible sanction -nullity and voidness- to those illegal activities. For the Appeal Court, acting in this manner

deprived the claimants of any guarantees, which the current legislation envisages to ensure there is complete information with regards to the evolution and situation of the financial entities so that, in this respect, they can limit or prohibit those practices or deals that increase the risk of insolvency or lack of liquidity, and reinforce the resources required to attend to those risks, thus avoiding harm to applicants…Preamble of the Stock Exchange Act of 26/1988).

The Appeal Court goes further than the original ruling and fully corroborates and endorses the allegations of the claimants that the widely publicized Inheritance Tax benefits are false, emphasizing that such conduct is deceitful.

Finally, the higher Court reaffirms the allegation by the claimants that they had no financial experience, a fact not challenged by SLM.

SLM’s choices are to accept the ruling and not interfere in the cancellation of the mortgage loans or explore filing an exceptional appeal with the Supreme Court, a possibility only accepted in very specific cases.

Litigants expressed their satisfaction over the performance of their lawyers Lawbird Legal Services.

 

BREAKING NEWS: the BILBAO APPEAL COURT UPHOLDS THE ILLEGALITY OF THE SLM MORTGAGES

Audiencia de BizkaiaBREAKING NEWS

The Court of Appeal in Bilbao has dismissed totally the appeal launched by the SLM (Surrenda Link Mortgage) Madrid-based lawyers and upheld the first ruling of the Court of First Instance 11 in Bilbao.

SLM’s choices are to accept the ruling and not interfere in the cancellation of the mortgage loans or explore filing an exceptional appeal with the Supreme Court, a route only accepted in very specific cases.

More to follow in the next post.

Round Up of Equity Release Decisions

ERVA has compiled a list of known Equity Release Court rulings. The Courts have all found in favour of the victims and ordered the mortgage loans to be removed or have rendered the foreclosure proceedings invalid. In most, the Courts have opted to resolve the dispute by ordering a “restitution of benefits”, which means that each party should be returning what they took under the contract: the bank is made responsible to pay the interest and cover the investment losses, and the borrower is to return the sums paid to them at the outset.

In one case, the Court refused the bank the right to claim back the initial payment.

Some of these cases are under appeal and could be reversed although, we strongly believe it to be unlikely under the the prevailing mood against defrauding banks and bankers for their known misdeeds and mischief.

 

Landsbanki Luxembourg S.A. Vs. Borrowers. 25th April 2015 in Court of First Instance 8 of Marbella

The court invalidates the foreclosure proceedings against the borrowers and terminates the case on grounds that the lender Landsbanki Luxembourg S.A. had grossly failed to file the adequate documentation alongside the foreclosure petition.

As a result, the bank is barred from filing foreclosure proceedings against this borrower for good.

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2 Claimants Vs. Danske Bank International S.A. 31st of March 2015, in Court of First Instance 2 in Benidorm

According to the Court, it is proven that we are before a contract known as “Equity Release”, named as “Home Income Plan” for retired people where the bank grants a loan that it is invested either directly or via a third party, retaining the lender a pledge over the investment, with a view to obtain sufficient income to finance the loan and hopefully, an excess that will supplement the customer’s pension.

The customers only received part of the loan, the balance being kept under control of the bank and later being invested through complex financial products, retaining the lender a pledge.

Court determines the nullity and voidness of an equity release mortgage loan on grounds that the clients had no financial or investment knowledge, professional or commercial experience, investment expertise nor sufficient academic training to understand, not even superficially, the financial product offered by the bank. It was also proven that the clients had not ability to select and validly carry out the investments in financial products as those where the loan was invested.

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2 Claimants Vs. N.M. Rothschild & Sons Ltd. 7th of November 2016

            The Court rejects the allegation by the defendant that this is a simple and ordinary mortgage loan because the loan’s destination is predetermined, from the outset, to be invested in a complex investment fund. It is therefore a complex product that includes, inter alia, a loan that is conditional upon the following: the mortgage, the specifications in respect to the drawdowns and the pledge of the investment fund. It is therefore not possible to separate or demarcate the mortgage loan from the destination to be given to the capital.

The Notary that intervened in the mortgage loan was deposed in Court and he affirmed the complexity of the product.

The Court rules that the product does not adapt to the profile nor needs of the claimants i.e. retired pensioners that do not need to make any investment but resort to signing this contract because of the fear instilled in them of announced spectacular and horrific Inheritance Tax.

Neither claimant required this product at this point in their lives, as they owned unencumbered property with a stable financial situation.

The Court orders the Equity Release contracts null and void and orders restitution of benefits.

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1 Claimant Vs Surrenda Link Mortgage Funding Nº 1 (SLM). 2nd of May 2017 in Court of First Instance 3 in Vera.

The Court determines that the Equity Release mortgage is null and void on grounds that it consisted of a complex product, that the claimants had no previous investment experience, academic education to understand the product they were purchasing nor there was any evidence that the claimants had ever in their life invested in financial products. It is also established that the claimants had not “investors profile”, not even conservative.

As a result, it is ruled that the bank breached the applicable laws in the matter and the equity release mortgage loan is declared void, ordering a mutual restitution of benefits.

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2 Claimants Vs. Landsbanki Luxembourg S.A. 7th of February 2017 in Court of First Instance 4 in Fuengirola.

The Court determines that the product SITRA II (made up of a loan, a mortgage, an investment and a pledge) is a complex financial instrument whose effects depend, largely, on market values of impossible determination in the contracts, which are usually redacted in abstract terminology, and therefore only accessible to experienced people.

According to the ruling, the neither the defendant nor its agent O.M.M. made any attempt to ensure that a) the profile of the claimants was adequate to the product and they understood the complexities nor b) whether the information provided was clear, concise and transparent.

It is also added that at source, the documentation given to the clients was fraudulent at worst, negligent at best, and because of this the equity release is declared null and void, ordering the mortgage loan to be cancelled and the advance payment retained by the claimant in concept of damages.   

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2 Claimants Vs. Landsbanki Luxembourg S.A. 11 of December 2014 in Court of First Instance 8 in Marbella

The Court determines that the equity release mortgage loan documentation given by the bank to the customers does not allow for an understanding of the product. None of the documents includes clear, concise, detailed or relevant information in respect to the functioning of the product or its financial consequences.

The complexity of the product resides in destining a large part of the mortgage loan to sign up a unit linked life insurance product that is made up of an investment fund. The information provided was manifestly insufficient.

The reality is that not even the bank provides a plausible explanation in respect to how does the investment of the loan through financial products work.

Because of these complexities, the bank should have carried out actions to ensure that the client knew exactly the different possible scenarios and consequences.

The Court determines that the bank misrepresented the real complexity of the product and therefore concludes that the client was unable to understand and accept the product validly, for which reason they decide to nullify the mortgage loan, with restitution of benefits.

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2 Claimants Vs Surrenda Link Mortgage Funding Nº 1 (SLM). 29th of October 2014 in Court of First Instance 3 in Torrevieja (Alicante)

The Court determines that the customers were classed as ‘retail’ and that, as a result, they should have been provided extensive and detailed information on different scenarios of investment performance, associated risks, ensuring that the product was suitable and that it was clearly understood by the customer.

The Court nullifies the mortgage loan and orders the lender to pay 40,000 Euros in damages.

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17 Claimants Vs. Surrenda Link Mortgage Funding Nº 1 (SLM).  30 of November in Court of First Instance 11 of Bilbao

Court of First Instance 11 in Bilbao has ruled that twelve mortgage loans valued at 6 million Euros, granted to British families mostly in the Malaga province between 2004 and 2007, should be declared void.

The Court dealt with this case as all loans were granted at a Bilbao Notary Public and the representatives of the lender, SL Mortgage Funding nº1 Limited (SLMF), were also based in the Basque city, according to Lawbird Legal Services S.L.P.

These loans were sold to attain a reduction in potential inheritance tax, since the mortgage would reduce the taxable value of the property, but also to supplement the modest pensions received by the owners of the properties.

Chester-based SL Mortgage Funding nº1 Limited (SLMF) had not applied for the necessary regulatory permits to legally raise funds from the public and provide an investment service, activities reserved and regulated by the Bank of Spain and the CNMV (financial regulator).

Despite not having any of the above authorizations, SLMF would lend but at the same time retain most of the proceeds of the loan, which would then be invested by them.

The ruling declares that “infringing the protocols set by the relevant administrative authority to supervise the disputed product is a regulatory violation that exceeds that of a mere breach of banking laws, such as misselling, so profusely dealt with recently in relation to the massive sale of complex financial products.”

The Judge held that in this case, the breach of public policy “is far more serious for it makes a mockery of a whole system of financial and banking supervision designed to prevent abuses to consumers and protect the stability of the sector”, and likens this behaviour “civil fraud”, which is any proposal that contravenes mandatory regulations or has a false or forbidden reason.

The sale of this product was conducted via commission-earning financial advisory firms, namely David Driver from OIB, Hamiltons Financial Services and Henry Woods Investment Management, based in Estepona, Marbella and Fuengirola.

SLMF also recommended a network of lawyers that created an appearance of seriousness, downplaying the extent of the lack of licensing requirements of the bank and the product.

According to Lawbird Legal Services S.L.P., for the claimants, the ruling confirms that operating in breach of mandatory banking and financial regulations makes the suspect a “boiler room”, -even if the company was legally operating in their own country- and allows the victims to rid themselves of a nightmare lasting for over 10 years.

The Judge concludes that the nullity and voidness should be made applicable to all contracts and agreements executed between the clients and the bank, applying the laws of contractual termination in odd fashion –albeit most favourable- as clients “will be able to claim what consideration they gave under the contract without having to return was given to them.”

 

SLM Decision Still not Official

Having the Appeal Court notified the parties that by the end of June they would have resolved the appeal to the Equity Release “Bilbao case” ruling, it is almost October and there is no official notification.

This is not unusual and should not be interpreted in any particular sense.

We eagerly and optimistically await the decision from the Court.

Bilbao Court Issues Broad Enforcement Proceedings Against Surrenda Link Mortgage Funding

Iberdrola y ACS se enfrentarán a partir del 18 de enero en un juicio en Bilbao

Court of First Instance 11 in Bilbao has accepted a motion by claimants to enforce proceedings against SLM and ordered the following:

  • The freezing of assets owned by SLM to cover as much as 6,262,574 Euros, plus legal interest.
  • The cancellation of mortgages registered in favour of SLM on the properties owed by the claimants, by ordering the Land Registries of Alora, Mijas, Javea, San Roque, Estepona, Coin, Velez-Malaga and Marbella to remove same.
  • The annotation of the Court ruling in the indicated land registries.

This groundbreaking Equity Release ruling applies in full art. 1306 of the Civil Code (reserved for serious law breaches and violations of public order) and orders the defendant SLM to not only suffer losing the rights of a registered mortgage but, in addition, to pay the claimants the loan that was withheld to invest with Premier Group Isle of Man (now in liquidation).

SLM does not have the right to appeal but can oppose this decision, within 5 days.

The above decisions are adopted provisionally, pending the outcome of the appeal process. As with most rulings, claimants are by law entitled to enjoy the result of a favourable ruling on the understanding that, should the ruling be reversed on appeal, the successful appellant may request a restitution of the gains received.

Currently, only 20% of rulings are overturned by Appeal Courts.

A Judge nullifies 12 equity release mortgages worth 6 million Euros

Vista de los juzgados de Bilbao en los que se ha llevado el caso.

Source: Diario Sur

The sale was conducted through commission-driven financial advisors based in Estepona, Marbella and Fuengirola.

Court of First Instance 11 in Bilbao has ruled that twelve mortgage loans valued at 6 million Euros, granted to British families mostly in the Malaga province between 2004 and 2007, should be declared void.

The Court dealt with this case as all loans were granted at a Bilbao Notary Public and the representatives of the lender, SL Mortgage Funding nº1 Limited (SLMF), were also based in the Basque city, according to Lawbird Legal Services S.L.P.

These loans were sold to attain a reduction in potential inheritance tax, inasmuch as the mortgage would reduce the taxable value of the property, but also as a means to supplement the modest pensions received by the owners of the properties.

Chester-based SL Mortgage Funding nº1 Limited (SLMF) had not applied for the necessary regulatory permits to legally raise funds from the public and provide an investment service, activities reserved and regulated by the Bank of Spain and the CNMV (financial regulator).

In spite of not having any of the above authorizations, SLMF would lend but at the same time retain most of the proceeds of the loan, which would then be invested by them.

The ruling declares that “infringing the protocols set by the relevant administrative authority to supervise the disputed product is a regulatory violation that exceeds that of a mere breach of banking laws, such as misselling, so profusely dealt with recently in relation to the massive sale of complex financial products.”

The Judge held that in this case, the breach of public policy “is far more serious for it makes a mockery of a whole system of financial and banking supervision designed to prevent abuses to consumers and protect the stability of the sector”, and likens this behaviour “civil fraud”, which is any proposal that contravenes mandatory regulations or has a false or forbidden reason.

The sale of this product was conducted via commission-earning financial advisory firms (Hamiltons Financial Services, Henry Woods Investment Management and others), based in Estepona, Marbella and Fuengirola.

SLMF also recommended a network of lawyers that created an appearance of seriousness, downplaying the extent of the lack of licensing requirements of the bank and the product.

According to Lawbird Legal Services S.L.P., for the claimants, the ruling confirms that operating in breach of mandatory banking and financial regulations makes the suspect a “boiler room”, -even if the company was legally operating in their own country- and allows the victims to rid themselves of a nightmare lasting for over 10 years.

The Judge concludes that the nullity and voidness should be made applicable to all contracts and agreements executed between the clients and the bank, applying the laws of contractual termination in odd fashion –albeit most favourable- as clients “will be able to claim what consideration they gave under the contract without having to return was given to them.”

Other articles:

La Vanguardia

El Economista

Finanzas.com

Day In Court Against SLM and Premier Isle of Man

On Thursday 14th July, Bilbao Courts heard the case of a number of the SITIRS (Spanish Inheritance Tax and Income Release Scheme) product against Surrenda Link and Premier Isle of Man companies.

From the victims’ part, lawyers insisted –and proved beyond doubt- on the crucial lack of regulatory clearance on not only the product, but the financial entities and the IFAs. Lawyers also proved that the inheritance tax reduction proposition was fraudulent. Our lawyers alleged that the product, called SITIRS (Spanish Inheritance Tax and Income Scheme), was a sham in every aspect. They also evidenced that lawyers appointed to act for victims were for the most part on the list of SLM appointed lawyers.

A witness who had worked for Hamilton’s attended as the hearing and confirmed that clients were approached by telephone cold-calling. The witness also advised that IHT was the main reason why this product ever existed, in the first place. When asked by the Judge if her company was registered, the witness stated that it had applied for a license but never received a reply from the CNMV.

For the part of SLM and Premier, the former argued that all risks were properly presented to the customer by signing the relevant forms. Insofar as Premier is concerned, their main allegation was that they were a different company from the one that sold the product during the 2005-2007 period.

The presiding Judge took an interest in the case beyond what is normal and tried, whether successfully or not, to understand the mechanics of this product. At one point, she argued that if this whole financial proposition was so difficult for legal people to understand, what chances did pensioners have (?).

The trial took six hours and the parties presented their oral conclusions.

The ruling will be issued any time now although, as August is a Court holiday month, it may be that we do not hear any more until September.

The Premier Balanced Fund and Surrenda Link Mortgage

 

The Premier Balanced Fund was described as an “experienced investor fund”, restricting it to people capable of understanding the risks, but they needed a lender who could come up with 40 million Euros to invest in their fund.

SLM Funding Nº1 Limited won the tender process: it was selected by the Premier Group (Isle of Man) Ltd. to find those 40 million Euros, an order they carried out efficiently: Aareal Bank was convinced to pool resources, some say Rothschild too…

But there was an added element in the form of bricks and mortar: approximately 100 Spanish properties would be used as collateral to ensure that, if the investments went down, 200-odd British pensioners could be made responsible of footing the bill.

The “experienced investor fund” is now probably worth less than half and the ex- mariners, ex-policemen, house wives and other Spain-based retirees who were instilled with the Fear of God with the Spanish Inheritance Tax -and fell for the scam- have their properties, and lives, bogged down.

Perverse Nicky Flux, loyal till death to SLM, keeps sending her monthly letter out to pensioners…letters coming from a company that would disgrace any Nigerian 419 business.

Terms & Conditions

The Premier Balanced Fund plc (“the Company”) is an experienced investor fund and complies with the requirements of the Financial Supervision (Experienced Investor Fund) (Exemption) Order 1999 (the “Order”) of the Isle of Man. Shares in the Company are only available to persons sufficiently experienced to understand the risks associated with an investment in the Company and who are willing to invest more than the minimum specified in the Order.The Value of shares in the Company, and the income produced by them can fall as well as rise. Investors may not get back the value of their original investment.The Company, is not subject to any form of regulation or approval in the Isle of Man and investors are not protected by any Isle of Man statutory compensation arrangements in the event of the failure of any of them. The Isle of Man Financial Supervision Commission does not vouch for the financial soundness of the Company or for the correctness of any statements made or opinions expressed with regard to any of the same. It is the responsibility of any person/s wishing to apply for Shares in the Company to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction.

I have read and understood the above information

   

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