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Shortfall of £90k , need help


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Shortfall of £90k , need help to prepare a defence , lender sold house way to cheap! what do i do first , 2nd & third!

 

Ell-en are you still around?

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Hi nuke em - what's the background to this? what are you preparing a defence for. I assume the property has been repossessed? have you received a court claim for the shortfall?

 

Ell-enn

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Yes, hi Ell-enn , yes prop has been repossessed , sold via LPA receiver way below market value, no proper marketing, no real time on the market, just a classic cut & shut to shaft the borrower, just want to fight back under their Care of Duty towards a borrower...

 

yes have recived a claim for shortfall, need to do a acknowledgment of service then prepare a defense ( and maybe a counterclaim?)

 

just need a plan of action, thanks for any help you can provide

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Are they chasing you for the shortfall ?

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in so far as they have issued a claim, yes

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What date do you need to acknowledge service by? Is is from Northampton County Court or a local court?

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What date do you need to acknowledge service by? Is is from Northampton County Court or a local court?

 

local to the lender, although i might ask for it to be transfered, i have 13 days left to file

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OK, let me do some digging around and I'll come back to you tomorrow. There are certain steps the lender has to follow when selling a repossessed property and if they have not complied this will jeopardise their claim.

 

Do you have a valuation for the property before it was repossessed?

Did you put the property on the market yourself and were there any interested parties?

 

Ell

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OK, let me do some digging around and I'll come back to you tomorrow. There are certain steps the lender has to follow when selling a repossessed property and if they have not complied this will jeopardise their claim.

 

Do you have a valuation for the property before it was repossessed?

Did you put the property on the market yourself and were there any interested parties?

 

Ell

 

 

it was a BTL property that was grabbed by the Building Society via the LPA Receiver act, i asked if i could sell it as i had it already on the market at a reasonable price, they said no, grabbed it and they passed it on to the receiver , i never went to court via a repo hearing

 

i did find a buyer myself, and sent them a letter about it, they ignored it

 

i have sent them many letters about their conduct, they basicaly just fobed me off and now they just gave it away

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OK, have you got copies of all the letters you sent them and proof of the buyer you found?

 

You need to start to build a trail of evidence in date order.

 

Ell

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OK, have you got copies of all the letters you sent them and proof of the buyer you found?

 

You need to start to build a trail of evidence in date order.

 

Ell

 

 

sure do, I kept copies of every thing that was sent, received etc

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Great stuff! I'll check back in with you tomorrow with some more info.

 

Have you acknowledged service of the claim?

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ok thanks, i will look out for it,

 

Sending off the Acknowledgement today

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Can you acknowledge service on line? if you are posting it send by recorded delivery - we wouldn't want them to say they didn't get it would we;)

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  • 2 weeks later...

Sorry Ell en being out the country for a few days, anyway sent off the Acknoledgement of service ( not by RD though, even though i send everthing RD , i thought it would be alright not to)

 

so no i need help to file a defence..... any thoughts, ideas

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anyone out there have clues about preparing a defence, never done one before, Ellen are you about?

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Hi there, this is taken from the Council of Mortgage Lenders recommendations regarding sale of property after repossession:

 

Sale of Properties in Possession

18. When selling properties which have been taken into possession lenders are under a duty to obtain the best price reasonably obtainable. A lender is not bound to postpone the sale in the hope of obtaining a better price at some future date; however, the lender should allow sufficient time to permit, for example, proper advertising so that the best price obtainable may be achieved. Mortgage lenders generally use the following administrative procedures for selling properties which have been taken into possession.

Administration

(a) The sale may be dealt with either via a lender's in-house department or through a separate property management company employed by the mortgage lender. Dedicated staff are responsible for co-ordinating the sale of properties in possession which will include reviewing the offers received from potential purchasers as well as monitoring the condition of these properties and their valuation.

Valuation

(b) A valuation of the property is obtained from either one or two qualified surveyors and another from the appointed estate agent. Prices will be reviewed regularly based on local circumstances.

Estate Agents

© Properties are usually marketed through an estate agent in the immediate locality of the property being sold. Agents may advertise properties in the local press, with such advertisements being repeated as and when necessary. Mail shots and national advertising may also be carried out in some cases. In general, lenders do not market these properties as "repossessed properties" and estate agents may be specifically instructed not to do so.

Report on Activity

(d) Estate agents are usually required to report regularly on activity if a property remains unsold. The estate agent will notify a mortgage lender of offers received. Only when satisfied that the best price has been obtained, would the estate agent recommend this offer for acceptance. If the offer is substantially below the asking price, the agent must provide supporting evidence to suggest that this would be the best offer obtained. In practice, all offers are accepted or declined promptly. Where there are a number of very close offers on a property, a sealed bid procedure may be carried out whereby

8

the person putting forward the best offer would be the successful buyer.

Visits to the Property

(e) The agent will usually visit the property on a regular basis and ensure that any necessary repairs and maintenance to the property are carried out and that the property is secure. When properties are first put up for sale, mortgage lenders will usually arrange that essential repairs, cleaning and tidying of the garden are carried out. Whilst the estate agent will take care of minor repairs which are identified on the regular visits, other repairs usually require the approval of the mortgage lender. Where this work is carried out, estate agents will be required to obtain competitive estimates. Prospective purchasers will normally be accompanied by the agent when viewing a property.

Auction

(f) Properties in possession may be sold via auction. These properties are reviewed relative to sales experience and the length of time on the market. There are occasions when properties may be sold by auction because either the auction is specifically targeted at the type of property in question, eg a period type of residence, or the property will generally appeal to the speculator market because of its condition. Such properties are referred to an appropriate auctioneer. A catalogue would be issued and the properties are available for viewing.

Indemnity Insurance

20. Mortgage indemnity is insurance which a lender may take out for its protection where a high percentage loan is made. This insurance policy covers the situation where, at some future stage, the lender has to repossess the property and sell it and the lender suffers a loss. For example, if the property is sold for less than the amount of the borrower's outstanding mortgage (including accrued interest and costs) the lender can claim on the mortgage indemnity to recover some or all of its loss. The basic security for the mortgage is the property. The mortgage indemnity, therefore, acts as a form of additional security for the lender. It provides no protection to the borrower who gains no benefit, other than a higher loan advance than would otherwise have been granted.

21. In most cases, the mortgage indemnity will cover the lender only for part of its loss and, in addition, once an insurer has paid a mortgage indemnity claim, it gains the right of subrogation; this means that the insurer can reclaim from the borrower any money it has paid to the lender under the mortgage indemnity claim. Either the lender or its insurer may take legal action against the borrower to recover the shortfall if the borrower does not repay it voluntarily. In most cases, the lender contacts the borrower to recover the shortfall on behalf of itself and its insurer. This does not mean that the lender recovers the loss twice; any money paid by the insurer which is subsequently recovered by the lender from the borrower is then passed back to the insurer.

Debt Following Mortgage Possession

9

What happens to a mortgage debt after a home is repossessed?

22.

After a lender takes a property into possession, interest will generally continue to

be charged on the mortgage loan until the property is sold. There will also be other costs charged to the mortgage account, including the estate agent’s costs in selling the property and legal costs.

23.

The lender has a legal duty to sell the property for the best price that can reasonably be obtained. If this results in a surplus after all the money owed to the lender and any other party with a registered legal interest has been repaid, then this surplus is returned to the former borrower. The lender will send the borrower a detailed final statement of the account and advise the borrower of the date on which the property was sold. This statement will be sent to the borrower’s last known address. The borrower would be able to raise any queries on the statement with the lender.

24.

But if the sale proceeds are not enough to pay off the money owing to the lender, the borrower faces a “shortfall debt”, which they still owe to the lender after possession.

What will the lender do if there is a shortfall debt?

25.

The action that the lender will take depends on the circumstances. Usually, the lender will contact the borrower as soon as possible after the sale of the property and give a final statement of the mortgage account. This will show the level of debt still owing to the lender. It is important that borrowers keep lenders informed of their addresses after possession so that they receive this information.

26.

If there is a shortfall debt, the lender may:

• immediately invite the borrower to contact them with their proposals to discuss how they might repay the debt; or

• try to give the borrower some time to get back on their feet financially before contacting them about repaying the debt.

How long after the repossession can lenders seek the recovery of the debt?

27.

In England, Wales and Northern Ireland, a lender legally has 12 years in which to contact the borrower to begin the process of obtaining repayment of shortfall debt; this period is usually 5 years in Scotland.

28.

However, lenders are committed to fair and sympathetic treatment of people who have suffered the unavoidable loss of their home, and accept that individuals should not face long delays before lenders contact them to discuss repayment of the shortfall. In practice, where a forwarding address is known, most lenders will contact borrowers fairly soon after possession has occurred with a view to agreeing a manageable arrangement for repaying all or some of the debt.

 

You need to check that all the recommendations have been met by your lender. In your defence you will need to show the court that the sale of the property has been conducted to your disadvantage.

 

The first step would be to send a SAR so that you get all the information they have regarding the sale.

 

Ell

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Yes i can SAR them & they wont respond in time as i only have 9 days to file a defence, do you have any "template" defences i can modify & file to buy myself time? ie get a defence in and argue it out in court if neccassary. thanks

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I've affixed a template for your defence. It's best to separate different issues with bullet points.

 

I'm happy to have a look at what you've written if you need me to.

 

If you have a look at some of the defence statments I've posted in this forum you should get a good idea how to lay it out.

 

Any questions, just shout.

 

Ell

Defence Statement template.doc

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Ell-enn, i have searched the postings by your user name with the keywords "mortgage + shortfall + defence " but can not find any specific posting, i see many about pre- repossession etc.... can you link me in to 1 or 2 examples , 'cos i can't find any , thanks

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Hi, there aren't any statements specifically for shortfall that I can remember, I was only suggesting you look at some of the others to get an idea how to set it out.

 

If you are struggling with what to put in the defence I am happy to help, but I am at work at the moment and would need to do it this evening.

 

You need to gather together the evidence you have found regarding the mis-selling and marketing of the property as this is paramount to your defence.

 

Ell

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Ell, i would be gratefull if you can help me with the wording of what to put in the defence, tonight will be fine, i will hold off untill you get back to me

many thanks

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Hi there. OK, what evidence do you have of the mis-selling of the property?

 

If we were to say...... "I believe the Claimant has acted contrary to the Council of Mortgage Lenders recommendations regarding the sale of property in possession as follows:

 

1. Not properly marketing the property

2. Selling the property at a price vastly below the market value

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Hi there. OK, what evidence do you have of the mis-selling of the property?

 

If we were to say...... "I believe the Claimant has acted contrary to the Council of Mortgage Lenders recommendations regarding the sale of property in possession as follows:

 

1. Not properly marketing the property

2. Selling the property at a price vastly below the market value

 

 

yes i do have evidence of selling vastly below market value and of not marketing it properly, should i be putting actual specifics ( address of other properties etc) in my defence ?

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Yes, you will need to offer paper evidence. What exactly do you have?

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