Possession Claim - 3 years arrears

[greatburdon]

Hi - Not sure where to start as my I am extremely anxious and need to deal with this situation.

I have received a court date of 6th april for arrears on my joint mortgage. I have not paid since April 2008 as I was advised that there was an error in my re-mortgage and the paperwork was not in order. The Mortgage Deed had not been signed and although the lender had asked on numerous occasions for me to do so I was told that it was their problem and I should not sign and as this formed part of my contract there was no requirement for me to pay the monthly mortgage. Having received this court date I have made further enquiries and this advice seemed to be incorrect as it is easily rectified by the lender by an attendance at court.

I am now 3 years in arrears to the tune of over £36k on a £323k mortgage, the mortgage was a self certified re-mort with mortgages plc and there are issues with how it was shown i could afford the payments as the figures were 'massaged' by the brokers to prove affordability but thats a seperate issue.

I am not in a position to pay any lump sum but would come to some arrangement to pay the monthly + an amount off the arrears if that is the way forward...As time is getting short should I contact the lender 1st to see if an arrangement can be made or do I attend court and do it that way?

 

Thanks in advance for any help.

[rebel11]

Hi great

 

The guys will advise as soon as they are available.

[greatburdon]

**BUMP**

 

Hi - My court date is next Wednesday and I am not sure what to do ... Is there any help out there please?

[Ell-enn]

Who advised you not to sign or pay ?

[greatburdon]

Hi Ell-en

The advise came from a claims company representative. I get the impression that this was wholly wrong - I am just wondering what I can say at the hearing and how I can perhaps come to an arrangement to clear the arrears by recommencing payment with an amount added to the monthly payment?

 

I am really worried and unsure how to approach the situation.

 

Thanks GB

[Ell-enn]

Well I won't pretend it will be easy to convince a judge you had good reason not to pay for 3 years - he would expect you to have done something about it during that time. Who is the mortgage company?

 

Do you have anything in writing from the claims company advising you not to pay or sign?

[greatburdon]

Ell-en there is nothing in writing ... The mortgage company is Mortgages Plc. Is the mortgage deed which has not been signed and therefore not in place something that legally needs rectifying and I can use to try to negotiate a payment plan?

[Ell-enn]

It's the fact that nothing has been done for 3 years which worries me - I'll see if I can get some more help with this, it's an unusual situation.

[greatburdon]

Thank you Ell-en - the fact that they have not really pushed for 3 years was in the opinion of the 'claims rep' a positive as he said the paperwork did not appear to be in order - hence do not pay.

[Lea_HTH]

Greatburdon, I'll try to help, but to do so, can you answer the following questions please?

 

1. How long is left to run on the mortgage?

2. Have you made any payments on it at all since taking it out?

3. What company gave you the information about the deed? How did they inform you? It looks from what you have said that you were told there was an error and then didn't pay - but later on you state something slightly different - indicating that the claims rep was informing you after the three years arrears (post#9) - please clarify when you were given the info.

4. You state you can't afford a lump sum - are you absolutely sure about this?

5. How much are you offering off the arrears?

6. Can you actually afford the monthly payments given that you state the broker 'massaged' the figures under the self-cert?

7. How much is the property worth, and is there any equity in it?

[greatburdon]

Hi Lea,

1.Its an interest only mortgage taken out in 2008 with 20 yr term

2.I paid for roughly 9 months in 2008/9

3.The 'error' came to light early 2009 when i received a letter from optima legal on behalf of mortgages plc saying the mortgage deed had not been signed by me and instructed me to do so - I took advice at that time and was told the mort. contract was not fully in place and thats when i stopped my payments .. April 2009

4.i do not have 36k to pay them .. I can afford to re-commence payments and add on to start reducing the arrears.

5.i.r.o. £500 per month

6.I can now afford the payments ... the re-mortgage was a sub prime and the broker invented my income at that time to fit the sum advanced .. It was unrealistic.

7.not had valuation but would say around £450k on the open mkt.

 

Thank you for trying to help .. much appreciated

[Lea_HTH]

Hi Lea,

1.Its an interest only mortgage taken out in 2008 with 20 yr term

2.I paid for roughly 9 months in 2008/9

3.The 'error' came to light early 2009 when i received a letter from optima legal on behalf of mortgages plc saying the mortgage deed had not been signed by me and instructed me to do so - I took advice at that time and was told the mort. contract was not fully in place and thats when i stopped my payments .. April 2009

4.i do not have 36k to pay them .. I can afford to re-commence payments and add on to start reducing the arrears.

5.i.r.o. £500 per month

6.I can now afford the payments ... the re-mortgage was a sub prime and the broker invented my income at that time to fit the sum advanced .. It was unrealistic.

7.not had valuation but would say around £450k on the open mkt.

 

Thank you for trying to help .. much appreciated

 

 

First, you have about 17 years to run on the mortgage (you should calculate the exact no. of months left), which is around 204 months - there is case law to suggest that if you can repay the arrears back over the remaining length of the mortgage that the court can consider this (note it is CAN not HAS to). The 36k spread out over 204 months is under 180 pounds per month...a realistic offer for the type of arrears you have would be nearer 250 pounds per month (if you can afford it).

 

Second, I shall disabuse you of the view that a mortgage deed has to be signed in order to be effective - if it's not signed, or is defective in any way, it simply becomes an equitable mortgage - ultimately no less enforceable than one properly executed. Sorry, I know that will not be the news you wanted to hear, but it is the legal position. In addition you state you refused to sign, and therefore it looks like you fraudulently took their money intending not to pay them - it's not a good position for you to be in.

 

Third, contracts can be effective by conduct - the fact that you repaid the mortgage for nine months is evidence enough that you accepted the contract. You were advised wrongly - and you should have sought proper legal advice from a qualified solicitor before acting on such advice. You had already accepted the contract in any case (by payment), and since it was your inaction in signing the deed that caused the problem, you cannot rely on that to get out of the contract (equitable solutions demand clean hands). It was foolish of the mortgage company not to get you to sign it before releasing the money - but that doesn't mean you don't owe them the money. If what you had been told by the claims rep was correct, all that would have occurred was that the mortgage contract would have been voidable, and you could have repaid them their advance, received any monies you had paid to them in repayments, and been put back in the position you had been in if the contract had never existed. You see, if the way you were led to believe was correct, it would mean you had 300k plus of someone else's money for free - it's simply not logical.

 

Fourth, it doesn't have to be the full amount, as stated above, but sufficient to show the court that you are willing to resolve this issue. A lump sum shows willing.

 

Fifth, can you realistically afford the 500 current instalment plus at least 250 towards the arrears? Be realistic in your answer - there is no point in saying you can afford it if you can't.

 

Finally, I'd suggest you put the property on the market now - this is because when you enter your defence, it is all likely to go against you and you are 99% certain to lose your home - I know that's a hard thing to read, but I wouldn't be fair if I gave you complete false hope. We're talking about three years of wilful non-payment in the hopes of completely avoiding repaying money borrowed - that's not a great look in the courts.

 

Now, those are the answers based on what you've told me here. I am aware it sounds harsh, but I can't sugar coat it for you I am afraid. But, that doesn't mean you should lose all hope - I have had cases in court that were almost as bad as yours and managed to get a suspended possession order as a final chance.

 

So here's what you do - you file a defence. You work out what your actual arrears are. You state 36K, but if your mortgage payment is 500 per month, then that only amounts to 18K over the three years - clearly extra interest will have been added (which they are entitled to), but they will almost certainly have also added charges for maintaining your account whilst it is in arrears, but frankly, given you were not paying anything, their maintenance couldn't have amounted to much, so you will probably be able to claim them back at some stage (forget about that for now), in the meantime you need to know how much the charges are so you can deduct them from the 36K so you are able to give the judge an actual figure on the true arrears - charges cannot be counted as arrears.

 

You need to consider quite carefully whether you can find a sum of money that you can pay as a lump sum - doing so will make the court look at your claim to be in a different position in a better light.

 

I can't help you fill in the forms (I am prohibited from doing that online), but I am sure that Ell-en can help you based on the information given in this post.

 

You are asking that the judge consider your proposal under the Norgan rules - that you propose to pay the CMI plus 250 (or what you can afford) towards the arrears. You need to apologise for the fact that you did not pay for three years and explain that you thought you had been given accurate advice (I wouldn't dwell too much on this aspect, the judge is not likely to be pleased given what I said above), but now that you have realised it was wrong, you are in a position to make amends and pay the CMI plus something each month towards the arrears. As above, you should have the property on the market, just in case it goes against you, and then you can ask for time to sell instead (you're not likely to get more than 56 days and that's if the judge thinks your circumstances warrant it).

 

If you are lucky, the judge will allow you one final chance and you will simply have a suspended possession order on the property - it's a 1% chance - but be forewarned now that there is a huge likelihood that if you default on even one agreed payment, the mortgage company will go for a warrant of eviction and any stay application you make in relation to that is likely to be thrown out (unless you make a substantial lump sum payment).

 

All is not at an end yet - and you still have a chance to save your home. Your biggest advantage is that there appears to be some equity in the house, which may buy you some time in relation to asking for time to sell if an outright possession order is granted.

[Lea_HTH]

I forgot - do you have an endowment policy to repay the mortgage capital?

[greatburdon]

Hi Lea

Thank you for taking the time to post that detailed response.

My current monthly payment should be 813.40 the last payment i made was 1,483.15 on 1st april 2008. The mortgage was taken out in June 2006, so nearly 2 years payments were made not 9 months as my memory thought. I can offer to pay the arrears spread over the remaining period as outlined in your first point, although I understand that this is a 'CAN' and is perhaps unlikely to be accepted.

I understand your points two and three.

Point four - There is a possibility of borrowing from a relative but the max. that i realistically think that would be is around £5k.

Point five - I can afford the 813.40 and an amount upto 300.00 to start payments and chip away at the arrears.

Finally - I am not sure that i can get the property on the market before wednesdays court date but will ask for that to be done with local estate agents.

 

If Ell-en could help with form filling that would be great.

I do hope i can be given some sort of opportunity to try and recommence with monthly payments but have noted and understood how the situation will look to the court given what you have said.

 

Thank you

GB

[greatburdon]

Oh - No there is no endowment policy in place to repay the capital.

 

GB

[Lea_HTH]

Just remember that all is not lost - I just don't want you going into court thinking it's all rosy and then coming out disappointed. Better you go in there prepared for the worst and come out pleasantly surprised. If there is a duty advisor there on the day, I would suggest you try to speak to them - get there half an hour at least before your hearing time, and earlier if your hearing is scheduled for 10:30 or later. If you can make a mortgage payment plus an amount to the arrears before the hearing, that would be really good - take the receipts with you.

 

If you are able to pay 5K as a lump sum, that is a good start - but don't borrow more money which you will have to repay elsewhere in order to do it. 300 per month off the arrears is a good sum, so long as you can afford it, and will certainly put you in a reasonable position with the judge.

 

You can go into an estate agents and ask them to give you a letter indicating the rough valuation of the property - and perhaps detailing an appointed date and time for him/her to come around to measure up in preparation of putting the property on the market - this will show the judge that something is in the offing, if not actually on the market. Remember this is just a back up in case the possession order is granted, so that you can ask for time to sell.

 

I am sure Ell-en will assist you with the forms - perhaps you should send her a private message as your case is imminent.

 

Remember not to dwell too much on the advice you were given re the deeds in any defence you write.

 

Good luck - ensure the judge knows that you are in a good position to pay from now onwards.

 

PS I'd strongly suggest you get an endowment policy in place too.

[Lea_HTH]

One other thing you might consider doing - is negotiating directly with the mortgage company. You could ask them to capitalise the arrears which would effectively allow you to start again with a 'new' mortgage, for a somewhat higher amount. This obviously depends on whether your income could bear the weight of a higher mortgage - and whether you could afford restructured payments for the new loan. But it's worth a try at any rate.

 

In addition, there is nothing stopping you from trying to negotiate the terms of CMI plus 300 towards the arrears with the mortgage company before the court hearing. You are better off putting proposals in writing (for proof in court), but I appreciate that time is short, so you may wish to phone them with the proposal and then follow up with a fax thereafter. Get them to respond to you in writing (fax or email with attachment of letter) irrespective of whether it's a 'yes' or 'no'.

[greatburdon]

Thank you for your replies - You mentioned seeing a 'duty advisor' who is this and what is their role? I will contact the mortgage co. 1st thing on Monday with a proposal and see where that goes. Do i need to file a defence? and can someone (Ell-en) help with that?

 

Thank you

[Lea_HTH]

Thank you for your replies - You mentioned seeing a 'duty advisor' who is this and what is their role? I will contact the mortgage co. 1st thing on Monday with a proposal and see where that goes. Do i need to file a defence? and can someone (Ell-en) help with that?

 

Thank you

 

A lot of courts have duty advisors - they are usually lawyers, but can sometimes be lay representatives with specific knowledge in repossessions (for example a lay representative might be a CAB advisor). Mostly they are solicitors, but sometimes barristers (many of us work pro bono).

 

You simply go in to the court and ask if there are any duty advisors available - depending on the day and the court, there may not be. If there are, there is likely to be a VERY long queue, so make sure you go in at a very minimum 30 mins before your hearing time - but be patient. Everyone thinks their case is the most important, but as duty advisors we have to ensure that we see those who are heading into court first - so if your hearing is at 11 am, and someone else's is at 10 am, expect them to be seen first, even if you arrived first.

 

It is very unlikely you will have to go into court without speaking to an advisor if you so wish (and often judges will send people out specifically to speak to an advisor, even when they have chosen not to). Take all your paperwork with you (including your mortgage contract if you have it - it makes our work easier when we can look at the contracts).

 

You will need to file a defence - sticking to the information that doesn't make you look too bad - i.e. as I said previously try not to dwell too much on that bad advice you followed!

 

I am sure Ell-en will be happy to help you with the wording of that. Send her a private message since your court date is imminent.

[greatburdon]

Thank you again Lea I will pm Ell-en and request to see a duty advisor prior to the hearing. I will outline as part of my defence the proposals i will put to the Mortgage Co. Must admit I think things are looking extremely bleak.

[Ell-enn]

Hi there, I got your pm. I'll try and work on the statement tonight as I have family here all day tomorrow, but will certainly try to get it to you tomorrow evening at the latest.

 

Need a little more information - is the mortgage in joint names? do you have any children living at home?

 

In the meantime, can you complete the affixed budget sheet so the judge can see you will be able to afford the payments you are offering.

Budget Sheet.xls

[Lea_HTH]

I can't deny it's not a great outlook - but it all hinges on whether you can afford to pay the amounts you are committing to - you should get at least one more chance to show that you can do it. I am sure that in future you won't take advice like that you were given at face value (and you could explain that to the judge if you wish, but as I said before, it's best to play that element down).

 

There's still a chance, so make sure you go into court and fight your corner.

[Ell-enn]

Affixed is the statement for court. You need to fill in the info where there are XXX's in the statement at the top - the info will be on the court papers (remove the XXX;s) read through it carefully to make sure everything is OK. When you print it out, your printer needs to be set for A4 paper (not Letter size) so it all stays on one page.

 

On the budget sheet write the Claim number on the top left hand corner and Appendix 1 on the top right hand corner.

 

Now assemble as follows:

Statement - signed

Budget Sheet Appendix 1

 

 

You will need 3 sets of the above. Make sure each set is stapled securely together.

 

If possible you should hand one set into court tomorrow so it can go in the file for the hearing - this will save you having to ask the judge if you can hand present it to him in the hearing.

Ask the court staff if there will be any free legal advisors on duty on the day of your hearing.

Greatburdon statement.doc

[Lea_HTH]

The statement is very good - succinct and to the point and not dwelling on the bad advice that was followed.

 

GB, stick to what Ell-en has said in the statement and try not to volunteer too much further information in court. The judge will inevitably ask you some questions, but be brief with your answers.

[greatburdon]

Thank you for your help ... Judge gave 28 day possession order so I assume I will get a notice for eviction. As there is equity in the property can I place the property on the market and apply for the proceeds to be paid from there. I may be able also to beg from my parents a larger sum to pay off the arrears in the hope of staying in the property. Am I clutching at straws and there is nothing now that can be done?

 

Thnk you Ell-en and Lea for investing your time in me.

 

GB