The group called North East Property Buyers, who targeted homeowners struggling to pay their mortgages, bought a house from a Mrs Scott at an undervalued price.
In return she was promised that she could stay as a tenant with a low rent for life, with her son inheriting the tenancy on her death.
Having not been told of the behind the scenes dealings, Southern Pacific Mortgage funded a self-certified buy-to-let mortgage on the property.
After mortgage payments stopped Southern Pacific Mortgage looked to repossess the property, which was disputed by Mrs Scott.
The court ruled that Southern Pacific Mortgage would be able to recover the money lent on the property.
Paul Heeley, partner at UK law firm TLT, the solicitors representing Southern Pacific, said: “If the judgment had gone against Southern Pacific, lenders would have found themselves with hundreds of properties on their books that they could sell for only a fraction of their true value.
“This is because tenants would be entitled to stay under what often were long-term, low-rent tenancies that lenders weren't aware of when they agreed to lend on the properties.
"The value of the property is the lenders security for the money they lend. In this case, that security was severely impacted because of the type of tenancy Mrs Scott was claiming she had.
"If Mrs Scott's legal arguments had succeeded, Southern Pacific Mortgage would not have been able to recover all of the money they had lent on the property and, more widely, the risk lenders face when deciding to lend would have dramatically increased.
“That would almost certainly have affected the cost and availability of new residential mortgages, and at a time when a healthy and stable housing market is crucial to the wider UK economy."
Sale-and-rent back schemes were prolific in the 90s and early 2000s, meaning there have been a large number of civil court disputes between lenders and tenants.
Nine main cases were grouped together by the courts, yet as these were settled or dropped Southern Pacific Mortgage was left as the only remaining lender.
Paul Heeley added: "The lender and tenant here had a lengthy legal battle over a number of complex legal arguments raised by Mrs Scott's legal team.
“One of the lessons from this litigation is that buy-to-let borrowers must be upfront and honest with the lender on their mortgage application form or they risk putting themselves and their tenants at risk.
"Also, for property owners being offered a sale-and-rent back scheme that solves their financial problems, if it sounds too good to be true, it probably is.
"Another consequence of this decision is that professional negligence claims against solicitors and valuers involved in sale-and-rent-back schemes are possible where they have not been completely up-front when giving advice."