shortfall after reposession

[Hog29]

Hi CAG team,

 

In 2012 my home was repossessed after I could no longer pay the 2 mortgages on it due to unemployment and chronic health issues.

 

 

My local council had tried to get me into the mortgage rescue scheme, but the housing association involved declined due the the short term remaining on the lease.

 

I had the flat valued by an estate agent and the first lender, Mortgage Express, encouraged me to sell the flat myself, but the second lender, First Plus, refused that offer at the final court hearing, saying it would take too long.

 

 

The judge granted possession.

I owed about £180,000 (135,000 to Mortgage Express and 45,000 to First Plus) and the valuation was for 180,000 in 2011, a bad year for house prices.

I had a legal aid lawyer, but he could do nothing about it.

 

For the past year the debt collection agency Red Castle has been chasing em for £35,000 on behalf of First Plus, since they had received only £8,000 from the auction sale.

 

I refused to talk to Red Castle on the phone and wrote to them, stating that I had not received any communication about the auction sale, and that they should qualify the figures.

 

 

They never replied, but I received a letter from First Plus, stating that they had no documents relating to the auction sale.

 

Eventually I found out who was administering former Mortgage Express accounts and received details from them.

 

 

The flat was sold at auction in 2013 for £155,000, with Mortgage Express recovering all of its money, and after related expenses leaving £8,000 for First Plus.

 

In 2013 the value of the flat was much higher, and even considering the short lease, would have raised about £200,000 in a private sale.

 

I feel that First Plus has deprived me of the opportunity to mitigate my losses, and that the argument that a private sale would take too long is not valid since the auction sale only took place a year later.

 

Can I fight their demands?

 

In any case, I would not be able to pay, since I am now living on benefits and have no other assets.

 

Thanks and kind regards

[caro]

They can't get blood out of a stone and as you have no property now, there's not much they can do.

 

I suggest that you adapt the linked letter to suit your circumstances and ask them to write it off.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?387499-Mortgage-shortfalls-Please-write-off-the-debt-**Correct-as-at-October-2013**&p=4384002#post4384002

[unclebulgaria67]

Yes that is what you will have to do, ask them to write it off. If you continue to be hassled, contact Stepchange to see what they advise. As mortgage debts are not statute barred for 12 years, ideally you would not want this just put on hold, so if they just say they won't chase it for now, it means they or another debt collector will contact you in the future. Then you should get advice from Stepchange about your options.

[Hog29]

Thanks for your replies.

 

I just want to clarify if I can challenge their decision not to allow me to sell the flat myself, which has deprived me of the opportunity to fully repay the debt, and, since the flat was only sold in 2013, also come out of this situation with a small surplus for myself.

 

Thanks and kind regards

[unclebulgaria67]

Thanks for your replies.

 

I just want to clarify if I can challenge their decision not to allow me to sell the flat myself, which has deprived me of the opportunity to fully repay the debt, and, since the flat was only sold in 2013, also come out of this situation with a small surplus for myself.

 

Thanks and kind regards

 

Not sure how you can do this now. There may be some court claim you could make, but you would need Solicitors advice on this. It could get complicated, as the mortgage companies would defend and the cost of it might not be something you cannot afford. You might be able to get a free half hour with a local Solicitor and Citizens Advice may have contacts.