70k mortgage shortfall after house repo, don't know what to do help please!!!!!!

[Shadow2009]

Hi everyone

My partners house was repo'd in May last year after we had it on the market for almost 2 YEARS.

They valued the house in early 2007 at 155k and then sold it for 80K even though we had an offer of 110k which they ignored (we never had a reply from our letter).

 

They have given the house away and received offers for their full asking price b4 it was even advertised.

To cut it short had they have let him accept the 110k offer he would have owed them 15k not 70k.

What a nightmare.

 

They have made no attempt to contact him until now even though he had given them his phone number and email address they still wrote to an empty house.

He has other debts, no assets, savings etc and has just started his own business.

 

We are willing to pay them a reasonable monthly payment but think this is disgusting an think that the original value that they carried out and charged for but are denying took place was obviously rubbish and put him at the top of the slippery slop just before the house price crash.

 

We have complained to them and they are not interested.

Does anyone have any advise please?

 

We don't want him to go bankrupt as he would lose his business and be out of work which would totally stuff us.

 

Please, please help if you can. I know many people will be in this situation and it is wrong, someone has to show these bankers that they cannot carry on ruining people's lives for nothing.

thanks

[papasmurf1cx]

Shadow this is awful.... are you both homeless or have you somewhere to stay? I am sure your partner will get some excellent advice on here. The thing is to not panic and read the stickies on here. Some others more expert will start to help you out. Read the other threads and you will se an end to this I assure you. keep sane. you will get there.

[Shadow2009]

Hi

Thanks for the reply.

 

We live in my house which is in my name so we are ok.

 

The thing that is upsetting is that they expect my partner to magic up 70k which we cannot do and besides that had they have let him accept the 110k offer he would have owed 15k. Surely this isn't right?

 

is it me or is there no justice anymore? and conveniently they say out of all the letters he wrote they never received this one.

 

Does anyone have any suggestions?

we have complained to the bank who have rejected our complaint so are referring to FOS.

 

In addition it is my believe that they should have not have agreed to have removed his x from the mtg as he Cleary couldn't afford the mtg repayments on his own and was going through a bad patch at the time and not thinking straight.

 

Also he never signed anything with the lender so how can they enforce/impose their terms and conditions on him?

 

I've read the charges and they have charged him for removing pots of paint @ £10 a tin! for gods sake everyone moves into a house with other peoples left overs. We did our best to clear out most things when he left the house over 3 yrs ago.

Anyone any ideas please - we cannot pay 70k - we don't have it.

Thanks

[papasmurf1cx]

Hopefully some of the experts will be along in a moment. keep "bump" ing this thread until someone starts helping you. You just need to get the thread noticed.

[jimbo45]

Hi there

They've got the house so what more is left.

Just tell them to Foxtrot Oscar --after all what more can they seize. If they want to make YOUR partner Bankrupt it would cost them.

 

I can NEVER understand these companies threatening people with this sort of garbage -- House reposseessed and is a Shortfall so WE WANT xxx thousand as well.

 

Well had the Mortgage company been less greedy they might have got more money but if you DON'T have anything IMO for all their threats there is NOTHING they can do -- even if they get a CCJ which you can't keep to what can they do --send the Bailiff's in to seize NOTHING.

 

Just don't put YOUR home at risk to pay off your parttners debt which looks certainly uncollectable even if it is (unfortunately) theoretically collectable.

 

Cheers

jimbo

Edited September 12, 2010 by jimbo45

[Shadow2009]

bump

[Shadow2009]

BUMP - any chance of any legal advice please??????????????????

[jimbo45]

Hi there

There isn't any LEGAL stuff you can do if the re-possession was carried out according to the law.

The only way you could perhaps have a go is that had you been allowed to sell the house yourself you might have got more for it -- but say you had then is a shortfall of 35,000 GBP any better than 70,000 GBP when you don't have money to pay it back in any case.

 

This is one time I'd tell the law to go and hang itself since there is ABSOLUTELY NOTHING they can do to get you to pay up -- No property, no money so any threats are totally and 100% meaningless.

 

In any case if they want to make you bankrupt it will cost THEM at least 750 GBP to do it -- and again if you don't have money threats of "Service Charges", Solicitors costs and Court fees are as irrelevant as they are meaningless.

 

If I were you I'd just tell them to shove it and stay in "for the ride".

 

No court will ever make you pay money you don't actually have.

 

Do make sure that the original debt / shortfall IS NOT IN YOUR NAME SO YOU OR YOUR HOUSE CANNOT BE TOUCHED BY THESE **** WHO WILL TRY AND CONVINCE YOU OTHERWISE.

 

Cheers

jimbo

[sillygirl1]

As the Repossession was carried out via a court order there is F all they can do to carry out further enforcement... I had the same four years ago (they are claiming £5,000 in my case but they actually OWE me that - different story.

 

Mortgage Shortfall is a 'grey' area, they are claiming from you as their own INSURANCE against this deems it necessary, there is no other VALID reason.

[jimbo45]

Actually this seems to be handled better in the USA -- if a house is repossessed. that's IT -- any shortfall on Mortgage is borne by the Banks / Mortgage company so its tough ladies accoutrements to those Banks / Mortgage companies.

 

The Mortgage is assigned to the Property not the person although the person is responsible for paying it during the life of the mortgage which ends if a property is repossessed.

 

 

In the UK it would appear that as you were "loaned" money as an individual they can "attempt" to get a shortfall but why anybody being re-possessed where there is a shortfall would even CONSIDER paying ANYTHING back at all just amazes me --whatever "the legal niceties" might say.

 

Consider -- You've just been thrown out of your home and you are STILL being asked for money --

Well presumably if you could pay in the first place you wouldn't be in this position so what on earth are the PEA BRAINS at the Banks thinking.

 

Does ANYBODY EVER pay up on a serious shortfall of mortgage after repossession and if they do why on earth do they do it.

 

The chances of getting another mortgage after a repossession aren't going to be anything like even remotely possible for the forseeable future so any CRA reports and other threats are really meaningless at this stage.

 

Also Even if they DID get a CCJ on a mortgage shortfall (not even sure if that's allowed anyway) how would they enforce this stuff in a million years -- get a Charging Order on a Council House or a Salvation Army Hostel.

 

So as I said whatever the law might say this is one time you can tell these barstewards who've had you thrown out of your home to go and Foxtrot Oscar.

 

You can't be sent to prison for Civil Debt either BTW.

 

Cheers

jimbo

Edited September 29, 2010 by jimbo45

[Ell-enn]

Hi there - the mortgage company have to meet certain obligations when they are selling a house after repossession. They need to market the house responsibly and with your best interests in mind. Yo should send a Subject Access Request to the mortgage co to see what comes back regarding the repossession and to see if they have adhered to the rules. If they haven't then should they take you to court for the shortfall you can defend based on their non compliance. You would also put them to strict proof on the charges they have put on the balance.

The Council of Mortgage Lenders have set out the following:

HANDLING OF ARREARS & POSSESSIONS -

CML STATEMENT OF PRACTICE

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 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.

[jimbo45]

Hi Ell-enn

I don't want to interfere with your HUGE help you've given to MANY MANY people on this Forum -- I don't know how many repossessions you've managed to get stopped --thanks for all the work -- but my point here is that the OP has ALREADY been re-possessed (or his / her other half) and that even if the house could have been sold for considerably more - to someone who has ZERO money over it doesn't matter if the shortfall is 70K, 35K or even 10K -- there isn't the money to pay it.

 

Of course if the re-possession can be overturned then well and good but reading between the lines I suspect that they wouldn't want to take on this mortgage again in any case.

 

So all I was suggesting that there is NOTHING the courts can do to enforce payment of the shortfall where no assets exist and my advice was simply to tell the Bank to Foxtrot Oscar.

 

Cheers

jimbo

[Ell-enn]

Hi Jimbo - I do understand the situation but I felt it would be useful to post what the lenders are supposed to do when marketing a property after repossession.

Although the property has been repossessed it doesn't end there - the lender can take the debtor to court and if they secure a CCJ for the shortfall, they can then enforce by way of attachment of earnings on the debtor if he is employed, or petition for bankruptcy. Therefore a defence would need to be entered to try and stop the money judgement for the shortfall and any information regarding the lenders failure to comply with CML practice can only be a good thing.

[Shadow2009]

Hi everyone - thank you all for replying.

My partner CANNOT go bankrupt as he works in financial services and would be out of a job. So this is not an option for us. We are not 'hard up' but don't have any spare money either as he is self employed a recently started his own business so they cannot go for an attachment of earnings. I don't think there is any point in them trying to make him BR as his has no assests/savings. He moved in with me and the house we live in is in my name. We have no objections to paying them something our gripe is the fact that the liability could have been 15k instead of 70k if they had accepted the offer we received on the house which they ignored and deny receiving. We have thought of doing an IVA but don't want to ruin his credit rating for another 6 yrs as we can just manage to pay his current debts as this could tip us over the edge. I think we are going to complain to FOS as we have complained to the lender and they have rejected our complaint. I will keep you all posted and let you know how we get on as I'm not letting these B*****ds ruin my partner who has worked hard all his life. I will do everything I can to fight them as someone has to stand up and say this is wrong and should not be allowed to continue. I would like to do what you say Jimbo but fear they will be nasty and make him BR an then we are screwed and we have a young child to support and cannot live off my wage alone.

Thank you everyone 8)

[Shadow2009]

Hi Sillygirl1

Sorry to hear what happened to you. Can you tell me more? Why is there nothing else they can do to enforce as repo was via a court order?

Thanks

[sillygirl1]

In my case the reposession was done by a second charge company - (had I known then what I know now I would have been able to plaster them in court) and they then did a deal after repossession with the first charge company.

 

Both companies involved (GMAC and London & Scottish) soon both went into administration - hence I feel I have no further liability to either company. I have received no information from either company except a letter once a year from GMAC (they claim they took possession 8 months AFTER the event took place - something I can hammer them with should they try court again) and London & Scottish have gone silent...

 

Its almost four years (well will be in 12 days time) so from the initial threat of bankruptcy etc etc not a thing has happened except them ignoring my annual written request for information and the odd attempt to get me to talk to them on the phone. I keep telling them the issue is too complex to deal with on the phone and email a complaint to them... expecting this years letter any day now (although I did have one in June where they rang and I refused to speak to them).

[sillygirl1]

According to the courts (I checked this a few weeks after the initial reposession) because the repossession was carried out by the second charge company and the first charge company did some kind of deal with them there is no liability for me on either first or second charges.... it comes under the Law of Property 1925 act, I have the part written down somewhere at home.

 

Basically Company B broke the law, aided and abetted by Company A and now both are non operational!

[Shadow2009]

Hi Sillgirl1 - thats a strange one! alot of 2nd charge companies don't instigate repo as they don't get anything. Anyway if they not really chasing you and you ignored them for 6 yrs I think they cannot chase you have to that. I think we will see what FOS say as after reading Ellen's post it adds fuel to the fire. With his house they received 2 full price offers before even advertising it which confirms to me that it was under priced and why didn't they go to sealed bids? Anyway its the not knowing thats the worst thing and I don't want him getting stressed over it as he is more worried then he is letting on.

[sillygirl1]

That is what made me doubly sure they wouldn't get a penny out of me, neither company on its own would have had enough of a case but by ganging up they managed to take a lamb to slaughter and find it was not to their liking after all.

 

The shortfall part apparently cannot be subject to a CCJ as it still forms part of the original ENFORCEMENT action, if there is no money left after the original ENFORCEMENT action, ie the repossession they CANNOT restart court action. If this was so then every reposession case would have an immediate second case to decide how much is owed once the repossesion sale had gone through... and as the repossession was subject to a CCJ you also cannot have two CCJs for what is essentially (under the Law of Property Act 1925) part of the same alleged debt.

[Shadow2009]

Hi Sillygirl1 - all interesting info. We've done credit searches on my partner and my address where he lives now and his old address which he left over 3 yrs ago and there are no CCJ's registered. Does that mean they can still try registering one? surely they should have done that when they repo'd in May 2009? I am in a right quandry over this one. I've done and income and expenditure report and it shows we cannot pay them anything. I don't know whether to send them that and say there is no point chasing for money and see what they say. What do you think?

[Ell-enn]

Do you know if there was definitely a money judgement (CCJ) at the time of repossession ?

 

I realy do think you should send a Subject access request

(by recorded delivery and keep a copy for yourselves) to get every bit of info they have on your account. It should include everything to do with the repossession, marketing of the property and subsequent sale. You can then go through it and see where they have been negligent in looking after your interests.

Don't send them any income and expenditure sheets - they have no right to know your financial circumstances.

[Shadow2009]

Hi Ell-en

Do you know I don't know whether there was a money order. There are no CCJ's registered as I've done credit searches on his old address and current one which show no bad credit. How would I find out and does this make a difference? Basically he never received any formal paperwork. We only found out the house had been repo'd almost 2 yrs after he stopped paying the mtg because our estate agent told us there sign had been removed and a notice put in the window!

[Ell-enn]

If you send the subject access request you will get to know everything that happened with his account.

[sillygirl1]

I would leave things alone and wait for them to come to you - when they do you can start asking the same questions I did

 

Please send full details of the sale of the property, including purchasers solicitors, and fully itemised accounts...

 

This was put in a more formal way but basically now I tell them,

 

I do not acknowledge any alleged shortfall debt to you or your clients/agents

 

on XXX date I asked for this information, (see copy letters), to date it has not been received. Please may I have this as I need it to form a possible defence against further court action on your part.

 

Due to the complexity of the matter I wish to keep everything in writing. Telephone calls and agents visits will not be accommodated.

 

This is another bit I have seen added to the 'get lost' letter

 

Should you want to send an agent to visit me I need sight of the agents questions ten days before the visit to allow me to get the required paperwork together.

[Shadow2009]

Ok thanks I'll do that and let you know what happens. Shall I hold off complaining to FOS until we have this back?