Mortgage Shortfall

sammie28

Hi,
Can anyone shed any light on what we should do with a mortgage shortfall. To keep this short - my husband and i seperated in 2007 for a while, money worries etc just got too much, mortgage payments were way too much and the stress of it caused the split. He remortgaged (the deeds were only in his name) and basically lost the house 3 years later in 2010, it was repossessed. The mortgage company was Wave. The house sold for only £140,000 so there is a shortfall of approx £120,000. We are now back together and rent a house. The thing is he has never heard from Wave with regards to the shortfall, but we don't want it hanging over our heads for the next 6-12 years. So wondering, does he contact them and find out if they intend to persue the shortfall, we have no assets, saving etc and barely make ends meet. So guessing he would have to go BR. Have heard that sometimes companies will accept a payment of 5-10% to clear the debt! Is that right?
I'm worried the BR will affect my credit rating. We don't have any joint bank accounts etc. Does anyone have any dealings with Wave, or know if they do come after you for the shortfall. Think they have stopped lending now if that makes any difference. Any advice appreciated.

Thrugelmir

Did you husband have contact with "Wave" after the repossession hearing?

DevCoder

Merrill Lynch shut Wave down in 2008 iirc.

Might be why there hasn't been much contact.

sammie28

Thrugelmir - No i don't think he has had any contact.

Krisdorey - The house was repossessed in 2010, think there is another company dealing with 'customers'
Do you think they will not bother with the shortfall then?

Thrugelmir

krisdorey wrote: »

Merrill Lynch shut Wave down in 2008 iirc.

Might be why there hasn't been much contact.

Debt may have been sold on.

ACG

Your 2 years down the line, after 6 years of no contact im pretty sure the debt is wiped off.

Lets be realistic, if your just about making ends meet there is no chance your going to clear that debt or anywhere close to it.

In my opinion you have a couple of options:
- Your husband goes bankrupt - the debt is wiped off over night (this will have implications for a long time to come though).
- Ignore the debt, in 4 years time it will be wiped (i think) so he would have got rid of the debt without having to go bankrupt.
- Same as above, but if you want to own your own home again then try and do it in your name alone with just your income.

I would keep all of your finances seperate, so if you do have to start showing accounts its easier to remember whos is what etc.

(Just to say, i dont condone not paying debts...but by the sounds of it whatever you do pay is going to have very little impact in the actual balance outstanding, its probably worth trying to look at how to move on going forward and whats best for you and your family).

sammie28

Thanks for your replies, you have given me alot to think about. Finances will definately be kept seperate as i would like to buy sometime in the future, If and when finances improve and i'm absolutely sure i can afford the mortgage!

sammie28

Can i just ask - do you know when the 6 year for contact starts? I have read conflicting stories. One said it can be taken back to when the company could of started possession ie when account was first 2 months in arrears. The other said 6 years from repossession date. The account was in arrears on and off from a few months after remortgaging. And i think he had several court hearings where he managed to arrange a re payment plan but then couldn't keep up with it. How do i find out where the 6 year period starts?
Thanks again for your help

ACG

I think its 6 years from the last contact. So in 4 years time if they contact your husband just before the end date the 6 years start again.

Thats my understanding but i dont really deal with that, i just know a relative who was going through something similar but not as bad.

Thrugelmir

Obtain your husbands credit files from the various agencies to see if there's anything on file.

Also worth checking for a CCJ.

http://www.trustonline.org.uk


If contact has been lost as no forwarding address was provided by your husband. Then best to check there's no icebergs floating around that could come back to haunt you both in the future.

RenovationMan

It's 12 years, not 6 year for mortgage arrears. I remember a thread a couple of years back where someone was in a similar situation as your ex. He lost his house and there was a shortfall in what the mortgage company sold it for and what he owed - nothing like your £120k though. To cut a long story short, the amount he owed had increased mightily due to interest, etc. and after 8 or 9 yeras of 'clean living', the chap made a successful mortgage application and bought a new house. The bailifs found him because of his mortgage application and demanded their money. I believe he was at risk of losing his current property. I never found out what happened.

Had this chap gone bankrupt he would have been cleared of his obligations after 12 months or so and would have rebuilt his credit rating after 6 years. When he bought his house he would not have heard a peep about his previous mortgage debt.

The moral of the story is that you shouldn't hide from your obligations because 12 years is an awful long time to hide.