mortgage shortfall debt from 1998 - new mortgage

charlearose

im posting on behalf of my sis
she has a shortfall going back from 1998 of around 20k (which was the last time she aknowledged the debt in writing informing them that she could notpay it) ex husband went bankrupk so dose not cover him

moving on to present day she is remarried - and about to buy house with new husband they are putting down a very very large deposit from the sell of his old house

she did not say on the mortgage application that she was reposessed /had a mortgage before which was not true and the mortgage has gone through and she is looking to move in the new year

i believe that the 12 year limitation act on the shortfall is not up untill september 2010 as she last wrote to them in sept 1998 aknoledging the debt which started the clock ticking again
i have also read that its often the new mortgage application that highlight to the dca that she is now a property owner /has assests and is worth pursuing ect she will have a lot of equitty in this house probably 50 -60 k approximently due to the deposit

she is adamant that cos the mortgage went through its not the case
but im sure i read that the the dca ect have twelve years to pursue you for the debt going from when its last been aknowledged to
i have told her that just cos she dont have any ccj on her dont mean anything and in fact they the dca want you to get a mortgage so that they can slap a ccj then a charge onto your new property and get the money back this way just cos they havent bothered her dont mean that they wont espcially as she now has something to take

can someone please clarify this for me and also what are the implications of her lying on her mortgage appliaction as well

thanks all

Radiantsoul

Lying on a mortgage is obtaining money by deception which is a criminal offense.

I am not sure that your sister will necessarily have an interest that is pursuable in the new property. Even though she is the joint legal owner I would imagine her other half could argue that as he introduced the deposit then that money is his and her interest is half of any remaining equity. However in theory they could probably go down the CCJ and charging order route.

On the plus side banks are fallible and if they haven't done anything in eleven years they may very well have closed her file and she can probably keep her fingers crossed and hope. If they do find her the debt is likely to be in excess of £30k by now plus any fees though...

benjo

Sorry I cant clarify the position Re outstanding debt and how it may be pursued.

Implications of lying on a mortgage application...it is fraud, specifically 'application fraud'.

If someone is convicted for fraud it has many implications beyond the initial sentence (prison, suspended prison sentence, fine etc) for example

Withdrawal of the mortgage product = loss of your house.

Certain occupations will be difficult or impossible to pursue... teaching, law, medicine, supervision and in some cases transport - anything that might include contact with children or vulnerable adults/elderly/chronically sick/drug & alcohol misusers.

Visa's for certain countries will be refused. Now you dont need a visa to visit as a tourist for most countries, but the USA will make it very difficult for you to get a tourist visa. Most countries outside the EU will require a Visa if your work takes you there - and most ask about criminal records.

Depending on the sentence imposed for fraud, the conviction doesnt become spent for upto 10 years, it never becomes spent if it falls within the meaning of 'expections to the rehabilitation of offenders act'.

Insurances and other financial products may be difficult to obtain.

There are not many jobs that dont involve some form of dealing with the public, dealing with money, dealing with items of value, needing to be trustworthy - employers have the right to ask about the applicants trustworthyness.

Many, many job applications ask about criminal convictions, if you lie about your fraud conviction on a job application - you commit fraud by false representation (here we go again).

I dont know how likely your sister is to be 'found out', I dont know how happy she is to live with this possibility hanging over her - but thats about the sum of the implications.

charlearose

thanks that what i thought
if anyone knows about the 12 year statute of limitations and debt chasing that would be great -

silvercar

Once 12 years have passed, legally they cannot chase her; morally the debt is still hers.

There is a difference between lying on the application form and having 12 clear years. If the lender asks if you have ever been repossessed the answer is yes, even if the limitation statute means they can't chase for the debt.

Your sister has 2 real risks:

1. that the new lender finds out about the repossession between exchange and completion and pulls the mortgage with your sister liable to honour the contract and complete on the new purchase.

2. That the old lender finds her and puts a charging order on the new property.

charlearose

thanks that exactly what i thought - by my reckoning cos she aknowledged the dept in writing in september 1998 she has untill september 2010 - i advised her to wait untill 2011 to be on the safe side but she wont hear of it - thanks for your advice

silvercar wrote: »

Once 12 years have passed, legally they cannot chase her; morally the debt is still hers.

There is a difference between lying on the application form and having 12 clear years. If the lender asks if you have ever been repossessed the answer is yes, even if the limitation statute means they can't chase for the debt.

Your sister has 2 real risks:

1. that the new lender finds out about the repossession between exchange and completion and pulls the mortgage with your sister liable to honour the contract and complete on the new purchase.

2. That the old lender finds her and puts a charging order on the new property.

LilacPixie

i thought (and i could be wrong) that the 12 year limitation period was from the date in which the right to receive shortfall happened IE the date the property sold for less than mortgage value. Still doesn't alter the fact she liesd on mortgage application

charlearose

thats what i though originally, but i have read it that only applies if you dont aknowledge the debt at all in writing or make any payment towards the amount my sister got her divorce solicitor to write and make and offer of a few pounds a week which they the dca refused back in 1998 which effectivly started the 12 years again from that date - which would make it 12 years 2010 /2011 to be on the safe side i think she is mad lying about this on the mortgage but cant educate some people

FraudBuster

The NationalHUNTER system is an anti-fraud data sharing system for use by members of the Financial Services Industry.It was founded in 1993, with the assistance of the Council of Mortgage Lenders (CML). From the initial six member organisations, the system has grown to include approximately 90 sites, all sharing application information for the purposes of fraud prevention.

http://www.nhunter.co.uk/