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Mortgage Shortfall Debt £16,000 - update 8/8/17 NFA we won

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Mortgage Shortfall Debt £16,000 - update 8/8/17 NFA we won

Postby Soozysoo » February 18th, 2014, 12:10 pm

My brother has a Mortgage Shortfall, the house was repossessed back in September 2011, and sold in March 2012, leaving a shortfall. We believe the house was sold at a unrealistic price, as the Mortgage company originally put it on the market for £148k and sold for £130k.

We have not acknowledged the debt, but have wrote to the Mortgage company on a number of occasions asking for a complete breakdown, they reply eventually giving various bits of information, but not a complete breakdown from start to finish.

The last time we heard from them was back in April 2013, we wrote to them again asking for a complete breakdown, and raising our concerns, as it was a joint mortgage was the other party being actively chased for the debt. Also some of the information that they quote does not match up with what was on the court documents. In one instant they couldn't give us any information as they had to request the file from storage!!

We heard nothing from them, as they did not reply to our letter dated the 06th May 2013.

Today (18/02/2014) we receive a letter from them, stating that the full balance is due. The Amount is over £16,000, he doesn't have the money, self employed and being supported by the family.

If they do not receive a proposal by the 01st March 2014, they will instruct solicitors to start action in the County Court.

Please help.
Soozysoo
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Re: Mortgage Shortfall Debt of £16,000

Postby Debtwizard » February 18th, 2014, 9:41 pm

Hello soozysoo and a very warm welcome to the fee free debt help and IVA forum.

Can you let me know how much the mortgage lender is claiming for your brother and was the mortgage in his sole name only or joint names?

Another question, does your brother have any other debts such as credit and store cards, payday loan, bank overdraft or personal loans, if to what extent?

Also I have an article on house repossession debt & time limits which may help your brother as it covers mortgage indemnity guarantee (MIG) time limits to recover the debt and much more.

Best wishes,

Mike
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Re: Mortgage Shortfall Debt of £16,000

Postby Soozysoo » February 19th, 2014, 12:23 pm

Dear Mike

Thank you for your reply, on checking all the paperwork the amount claimed from the mortgage lender is £16,211.05, the mortgage was in joint names and on the Order of Possession granted in September 2011, both names are stated.

Also, it appears he signed a Voluntary Surrender of Property Form, I do not have a copy of this, he doesn't think he signed a Deed of Acknowledgement but is this the same?

No payments have been made against the mortgage since July 2011, the house was repossessed in September 2011 and sold in March 2012.

The other party my brother's ex wife, we are not sure if they are chasing her for the debt also, we have asked on a number of occasions the lender, but they have not confirmed either way. His ex has a habit of moving around quite a lot!!

In regards to debts, he has no credit or store cards, no payday loans, he does have a bank overdraft of about £6,000 at this time.

Many Thanks for your help.
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Re: Mortgage Shortfall Debt of £16,000

Postby Debtwizard » February 19th, 2014, 12:52 pm

Hello Soozysoo

He will need to read the document he has signed to see if it says that any debt following the repossession and subsequent sale of the property will be excluded from any Individual Voluntary Arrangement (IVA) or bankruptcy scenario, or words to that effect.

I take it you have read my article on house repossession debt that I added a link to in my early post and now understand how the 'ticking' 12 year rule applies. Because the mortgage was in joint names then either one can restart the time clock (for both) through acknowledgement or payment, even without knowledge to the other person.

Therefore this debt needs to be addressed.

Is your brother in full time employment and what assets does he have? Probably biggest one would be a car

Best wishes,

Mike
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Re: Mortgage Shortfall Debt of £16,000

Postby Soozysoo » February 19th, 2014, 1:19 pm

Dear Mike

We understand that the debt needs to be addressed, but as the mortgage is in joint names, surely he isn't solely responsible is he?

If the lender is unable to contact her what happens, we do know at present where she is living though.

We very much doubt that his ex will make any payment to the property as when she lived there she made no contribution. In fact my brother left the property in early 2010, continued to pay the mortgage while it was on the market, as it was intended to be sold, his ex refused all offers. She continued to reside in the property until the house was repossessed in 2011.

My brother is self employed, work is slow at the moment due to weather conditions as he is a contractor, things are very tight, the only asset that he has is a vehicle valued at about £5,000.

Many Thanks again.
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Re: Mortgage Shortfall Debt of £16,000

Postby Debtwizard » February 19th, 2014, 2:13 pm

Hello Soozysoo

Each person on the mortgage is liable for the full amount, it is not halved 50% v 50%, if one cannot pay then the other will be asked to pay the remaining balance. This is so with every joint loan or mortgage.

The debt has to be addressed because many people think that after 6 years when they have heard nothing they are clear. They are not.

If you brother later on settles down again and buys a property with another person then this debt can be secured on his new property, with or without equity many many years down the road, that is why it needs to be addressed sooner rather than later.

I see people who have been pursued for payment 10 years after the date of the last payment. I have clients who are being pursued for a repossessions from 1991, that is why I cannot emphasise enough it has to be dealt with.

The ways to do this would be through an Individual Voluntary Arrangement (IVA) or bankruptcy, both would also take out the his other £6,000 debt. Failing that he can offer a lump sum in full and final settlement on his liability only, obviously he will need to have a family member of friend that can lend the money. After his settlement the mortgage lender will still be able to purse the other named person on the mortgage. That may well then force the hand of his ex to do one of the three options above.

Best wishes,

Mike
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Re: Mortgage Shortfall Debt of £16,000

Postby Soozysoo » February 19th, 2014, 4:08 pm

Dear Mike

Thank you for your prompt reply.

My brother ideally doesn't want to go down the IVA or Bankruptcy route, so if we can arrange the funds he would be prepared to offer a full and final settlement to the lender. He just wants an end to this sorry mess.

What would be a reasonable offer for full and final settlement on his liability only?

Is his liability 50% or the whole amount?

Am I right in saying, that if the lender accepts, his ex would still be liable for the balance, if they can locate her that is. We don't believe they know where to contact her to, we are aware of where she is living at present though.

Many Thanks
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Re: Mortgage Shortfall Debt of £16,000

Postby Debtwizard » February 19th, 2014, 8:00 pm

Hello Soozysoo

Any offer you make will be based upon the full amount, the lender will not expect your brother to clear the debt but will require the right to go after the other named person on the mortgage.

Regards how much to offer, it all depends on his circumstances and how much disposable income he has after paying for essential living costs.

The best time to strike a deal is when your brother is at his worse for finances, this means if he has poor income and not good prospects and low disposable income. If you leave it too late, say a year or two down the road and his circumstances pick up and he has a good income with higher disposable income then the offer naturally will have to account for this.

So strike why the iron is hot :!:

Based upon the limited information I have from this thread I would open with say £2,500 in full and final settlement with the mortgage lender and the MIG. They will counter, if so let me know what it is as you have other trump cards up your sleeve.

Do not paint a gloom picture about the other named person, as the lender will naturally go after the person and this may be a big influence in them accepting your brother's offer.

Hope all this makes sense.

Best wishes,

Mike
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Re: Mortgage Shortfall Debt of £16,000

Postby Soozysoo » March 27th, 2014, 4:41 pm

Dear Mike

Since my last post, we have written to the Mortgage company again, asking for a complete breakdown, this was in Mid February as of today we still haven't had a response!!

Today though, a letter was hand delivered by a company called 'Fieldcall Ltd' based in Northampton, telling us they had been instructed to meet to discuss any problems experienced with paying off the outstanding debt. And for us to contact them on the mobile number stated, so an appointment can be arranged to discuss.

The letter is only addressed to my brother at his current address.

The enclosed leaflet states they are not bailiffs.

Help - What should we do??

Many Thanks
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Re: Mortgage Shortfall Debt of £16,000

Postby Debtwizard » March 27th, 2014, 8:39 pm

Hello soozysoo

They want to send someone to his home to sit down and work out a repayment plan, personally I would not go for this. Your brother does not have to accept this.

You can refuse the offer and broker your own deal. Can he raise any money, a lump sum, if so what is the max he get his hands on?

Best wishes,

Mike
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