France Defaulted Mortgage paid off by Insurance Company, that Company now claiming the full amount back from me!

[Badhorsey]

Hi,

I was living in France and had a French Mortgage for 200,000 Euros in 2009.

 

 

Unfortunately I lost my job and I had to return to the UK,

I paid what I could to the Bank over the next few years,

but one day in 2012 the Bank informed me that the outstanding Mortgage was paid off by an insurance policy.

 

 

I rented the house out to tenants after making enquiries and paying a Notaire to see if the house was actually mine, I was assured it was and assumed that I had taken a policy out at the time of purchase.

 

Last year I agreed to sell the house to my tenant,

it was then discovered that the insurance company Credit Logement had put a charge on the house in 2012 for the outstanding amount of the mortgage they paid off plus interest.

 

I have been living in the UAE since 2010, and my tenant in my house in France since 2011.

 

 

Neither of us had received any notification of any actions or judgements against me.

I was totally unaware of any legal proceedings whatsoever as the papers were served to an address in the UK, I hadn't lived in since 2010.

 

We are in a stalemate situation at the moment with the Insurance Company threatening to re-possess the house since May 2016 but have they have not made any moves to do so.

 

The Paris High Court served a Judgement against me in March 2012 with the insurance Company putting a charge on the Property's Title in August 2012.

 

Does anyone know if these outstanding debts have a Statute of Limitations?

 

Any advice would be gratefully appreciated.

 

Badhorsey

[dx100uk]

that's because they cant, if the UK CCJ/CO was done whilst you were not resident in the UK , at the house in the UK as you were abroad, then it could have been set aside

[Badhorsey]

Thank you for taking the time to reply. I didn't make it clear the mortgage is on a house in France.

 

The Bank that gave me the Mortgage is French, as are the Insurance company claiming the monies, and the Court Order was issued in Paris.

Edited March 3, 2017 by Badhorsey

[unclebulgaria67]

Think there might be a misunderstanding here.

 

After you could not pay the mortgage, the French Bank used their contingency insurance and the insurance company effectively took over as the creditor with a charge against the property. Banks take out contingency Insurance on mortgages to cover their liability, for when mortage holders can't pay their mortgages for whatever reason. In France it seems the Insurance company then take over as the creditors.

 

What is happening with the current tenants ? Are they paying you the rent money ? Or is the rent money being paid to the Bank or Insurance company ?

 

I think you need to contact the Insurance company and advise them you have been a resident of the UAE since 2010. They can't take any action against you in the UAE, but you need to find out what is happening. If the Insurance company are not being paid, then at some point the tenant will be served notice to leave the property and the Insurance company will take possession of it, with a view to selling it.

[Badhorsey]

The current tenants want to buy the property, however once we discovered last year that there was a charge on the property then we agreed not to accept any further payments from them.

 

We contacted the insurance company and stated that the we were happy for them to take the sum offered from the tenant to buy the property as long as we were no longer liable for any outstanding monies on the property including mortgage deficit or interest. They did not reply to us, but our tenant informed us that his legal team had been advised that Credit Logement would not agree to this.

 

So the property is still occupied by the tenant rent free, and CL still threatening re-posession and have been for past 12 months. If the property is re-posessed and auctioned is that end of our debt or similarly if the tenant buys it, even if there is a deficit? Are there any Statute of Limitations?

[unclebulgaria67]

It does not work in the way you think it does.

 

You should never have agreed for the tenant to live in the property for free.

Unless you have a legal tenancy agreement which they could show to court appointed official if required, the tenant could be forced out of the property by bailiffs without much notice.

 

 

If there is a tenancy agreement that is current, the tenants could be served notice to leave the property and then the Insurance company will sell it. At that point, when the property is put on the market, the tenants can bid for it. It might be put up for sale at public auction.

 

The only way there would be no debt, is if the sale price obtained by the Insurance company, is at least the mortgage remaining plus interest AND all costs incurred in repossession/sale, it is not possible to say what costs would be added, but it would be all their legal fees, court fees, auction fees etc. Any debt remaining would be subject to French limitation laws, which you can google for. There is a website stating limitations period for most countries.

[Badhorsey]

OK Thanks.... 1 thing confusing us still.

Why haven't they repossessed after 12 months?

[unclebulgaria67]

If you think about, what is the point in hurrying.

The Insurance company own an asset which is attracting interest and they will try to come after you for any debt.

 

Also perhaps they have had the property valued and believe that it is worth not proceeding with repossession until prices have increased.

 

There is a tenant in the property that is keeping an eye on it and they don't need to pay a property maintenance company to regularly check on it.

 

There might also be the issue that they have not been able to contact you in order to serve any legal paperwork.

 

In the UK, it can take several years, before a Bank starts to go through repossession. So in France in seems to be the same.

[Badhorsey]

Excellent reply, Thank you.

 

So what would you do If you were in this position and with the house repossessed, and with fees, mortgage deficit, and interest etc mounting daily?

[unclebulgaria67]

If i were living in the UAE,

i think i would write to the Insurance company stating the position.

 

 

That they can sell the property at the earliest opportunity,

providing they give relevant legal notice to all parties concerned including the current tenants.

 

 

Advise them, that the tenant is interested in bidding for the property once it is placed for sale,

[Badhorsey]

We have already done this,

but with the proviso that once the sale is complete,

we have no further obligations to them.

 

 

Our tenant has already put forward a good offer to them,

considerably more than it will fetch at auction,

they are happy to accept this but they have informed the tenant they will not agree to writing off any mortgage deficit , fees interest etc as part of the deal

[unclebulgaria67]

Of course they won't agree to writing off fees and left over mortage. This debt is an asset to them, which they can trade on if necessary.

 

Better to let them proceed with possession and sale, without trying to get them to accept conditions. It is going to happen at some point and might leave a bigger debt, the longer it takes. Deends on whether property prices are increasing and the property is being maintained in good order.