Birmingham Midshires Mortgage Shortfall - Joint Liability

[t123b]

I need some advice, my sister is currently trying to deal with a mortgage shortfall from Birmingham Midhshires.

 

This situation is she was living with an abusive and controlling husband and left with the kids to a rented house apporx 4 years ago. After she left and over approx 3 years the mortgage fell in to arrears.

 

The mortgage was in joint names and house was repossessed in November 2008, eventually in November 2009 the property was sold leaving shortfall of £8k including fees.

 

She has been informed that she is jointly liable for the debt and doesn't know what to do. Her ex-husband is works for cash in hand and as such has no income. He has also been Bankrupt twice for failing to pay Council Tax - he's has recently been discharged from the second one.

 

He will not accept any responsibility towards the debt and neither will he discuss the matter.

 

She has sent a letter and received a response to the breakdown of the balance and how it is owed.

 

The DCA are know asking for a income/outgoings breakdown from her.

 

Can she ask for the liability to be split and then make a F&F offer for her half?

 

Can she asked for her liability to be completely removed from the debt?

 

What is the next recommend action to take?

 

Although morally she doesn't accept the debt she knows that she is legally bound to it and wants to deal with it and get it out of the way.

 

Thanks

[AnimalMagic]

The terms in a joint mortgage usually state that either party can be pursued for the full outstanding amount.

 

She should be able to challenge any charges BM make, as they tend to pile it on. This will reduce the burden somewhat. If the mortgage was taken out as a self certified mortgage or similar - given it's BM, quite likely - she should take advice on the applicability of the unfair relationship legislation.

[t123b]

Thank you AnimalMagic for your advice, yes it was a self certified mortgage.

 

Who would she need to speak to for advice on the applicability of the unfair relationship legislation?

 

Henderson Booth & Snell are now threatening to go to take further action if she does not respond by the end of April.

 

Also should she provide them with I&E information now or should she wait until the issue around the unfair relationship legislation?

Edited April 18, 2010 by t123b
Add more info.

[AnimalMagic]

Who would she need to speak to for advice on the applicability of the unfair relationship legislation?

 

If the mortgage was taken out prior to Oct 2004, then a solicitor should be able to help... You may want to contact the one involved in this case given they have experience. If after Oct 2004, then your should contact the FSA.

 

Here's some more information

 

London North Securities Ltd v Meadows (2005) which was confirmed at appeal, where the lender charged £50 for every arrears letter and added this to the loan balance, which was being charged at 36.9% APR. It was held that this was extortionate since the charges levied did not represent the lender's costs over the arrears. However, the original loan was held not to be extortionate.

Sound familiar?

 

Henderson Booth & Snell are now threatening to go to take further action if she does not respond by the end of April.

 

I would suggest she responds by telling them she is taking legal advice on the applicability of the unfair relationships legislation. Either it will scare them half to death or it will have no effect whatsoever...

 

Also should she provide them with I&E information now or should she wait until the issue around the unfair relationship legislation?

 

Personally I would wait and take the advice of the solicitor.

 

Oh and good luck to her

[AnimalMagic]

Also the things she should be looking at in the unfair relationship:

 

1. Did BM act responsibly in providing the mortgage - with a self certified this is probably no, they did not.

2. How was the loan administrated?

3. How did BM deal with the customer when financial difficulties arose. Most likely they lept into repossession... Also take a look at the mortgage code and see if they kept to that.

 

This legislation is very potent and may well remove any liability if a decent case can be made. I should add the disclaimer that this is my understanding and I'm not a solicitor!

[t123b]

My sister has already sent the attached letter and I have put the response in red.

 

In a follow up letter, Henderson Booth & Snell have advised that their Client is sympathetic to her situation and any realistic offer, which now may be made, will be given serious consideration.

 

This is her draft response;

 

Without Prejudice

Thank you for providing me with the answers to the questions asked in my previous letter dated 9th December 2009. I apologise in the delay in responding to your letter dated 18th March 2010.

I am currently seeking further advice on the amount outstanding and seek clarification on the following points;

 

• When was the mortgage taken out and for how much?
  
• Of the £90,297.05 balance at completion (October 2009), how much of that amount is made up of charges and subsequent interest on the charges?
  
• Can you supply me with details of all charges that were added to the account? Including dates and amounts.
  
• In your letter dated 18th March 2010 you made reference to the ‘Terms and Conditions of the Mortgage Contract’. Can you supply a copy of both the Terms and Conditions and the Mortgage Contract?
  
• On the Completion Statement there is a Miscellaneous Cost of £1,671.25 and a credit of £1.51, can you provide me with how these amounts are made up?
  

I am looking to resolve this issue with your Client and by providing me with the above information would help.

 

 

Does she need to ask anything further or take anything off?

HB & S 10 Dec.doc

[t123b]

duplicate

Edited April 22, 2010 by t123b
duplicate

[t123b]

Anyine have any advice on this? Hoping to get a reply in the post tomorrow.

[AnimalMagic]

I can't see anything I can add to your draft.

 

I note it's a self certification mortgage - the OFT draft guidance says

Self-certification of income would not generally be considered adequate in respect of large long term loans, particularly those secured on property.

Also if there's any reference to 'abusive controlling husband' in the divorce proceedings, then I think your sister would have a good chance of successfully defending this action. Remember I'm not a solicitor... so it may be wise to research the guidance given by OFT and FSA and make a case which you then pass by a solicitor...