ABSTRACT
A lending institution is approached by an applicant (often a husband) who is seeking a loan/further advance (or overdraft facility) to assist in his business ventures. It is envisaged that the loan will be secured against the applicant’s family home, which is co-owned by the applicant and his wife. The home has sufficient equity for the purposes of the loan and the applicant’s wife seems agreeable to allow the home to be secured in this way. Despite the further loan, the husband’s business does not prosper and the husband is unable to meet the mortgage repayments so the lender brings proceedings to enforce the charge and realise its security. The wife defends the lender’s claim to possession of the home on the ground that the transaction was entered into by her as a result of her husband’s undue influence and/or misrepresentation. In some cases, the family home will be owned by the husband alone and the wife will have an equitable interest in it which she has agreed to postpone in favour of the bank or building society. Alternatively, the wife may be asked to act as surety for her husband’s debts with a charge being placed on her interest in the home to secure her guarantee.
