Repossessed property advice (long and complicated, advice needed please)

1981trouble

Not sure this is the best section but I figured it was a good starting point. I am posting this on behalf of a friend who needs some advice and thought you good people would be a good starting point.

Friend and partner separated a few years ago, he continued living in property they owned. She paid nothing towards it after she left. She made continual attempts to get it sold/her off mortgage etc but was never able to get any formal agreement in place with him. Finally moved towards forcing a sale recently and sold quickly for decent price. Ea rang her this week to tell her bank have repossessed property this week.

Ex partner has buried head in sand and not told anyone about it, not opened letters, not paid mortgage and has been repossessed. Bank are saying nothing can be done and that they tried to contact her on the address of property.

She told bank on phone of her new contact details years ago, they are denying this, nothing in writing unfortunately. She has spoken to them 3-4 times over last few days and inconsistent answers from the bank but underlying answer is too late to do anything else.

The issues/worries she has:
How does the repo affect her credit file (is spotless otherwise) - is there any appeals which she could try to reduce the impact, she appreciates she has been naive at not getting this formalised before now (she has tried, the ex has been non commital and she trusted him) and this has come out of the blue, she thought house was in hands of estate agent/solicitors nearly sold.

She suspects ex partner will go bankcrupt. She has no assets herself, some savings and a car. The house was sold for enough to cover mortgage etc and each walk away with small amount. if it now goes back on markets for repo, and then sells for less she is worried she will get hit for shortfall if he goes bankrupt. what happens with the current buyers? Will bank keep them or readvertise? She is considering getting in first and going bankcrupt to avoided being hit for any shortfall.

She was hoping to sell this house and then be in a position to look at buying but as we understand it now this has happened that option has gone for 6-7yrs so what are the (if any ) options around this?

She is seeing cab next week, I am however not sure they are specialist enough to respond accurately,and hope you guys in here will advise better and maybe give some thoughts which she can then follow up with cab.

I have said def start with sar from bank to see if there is any info there to confirm correct procedures/attempt at contact/why no record if new address etc. she doesn't want the house back, just to walk away as undamaged as possible from this,

Sorry for lots of info and waffling, hopefully you can find the key information in there.

dancingfairy

I would probably post this on the bankruptcy board for help and advice.
From what I can tell she is jointly responsible for the mortgage. Any issues with it (defaults etc) would be affecting her credit record. She would also be jointly liable for any costs associated with the repo and any subsequent shortfall.
It is therefore highly likely to deal with the shortfall she will have to go bankrupt (unless she is able to come to a payment arrangement).
It matters very little whether she goes bankrupt and then the shortfall is realised or whether the shortfall is realised and then she goes bankrupt. It will all fall under the bankruptcy unless she goes bankrupt first and then signs papers regarding the house. It has been known for lenders to send papers to a bankrupt to sign which includes a clause that means you are signing for the shortfall which then effectively becomes a new debt after bankruptcy. As long as she does not sign any documents regarding the house then she can go bankrupt at any time and the house debts will be included.
She definitely needs to get debt advice.
df
edit: She almost certainly is heading for bankruptcy (it is not anywhere near as bad as it sounds though, I promise). She will get loads of help and support on the bankruptcy board and need not fear the process at all. It is merely an administrative process.

1981trouble

Thank you, that is really useful advice about signing stuff. Given the banks behaviour so far I suspect that would be another thing they will do.

I will copy this thread over to bankruptcy and see what thoughts people have.

dancingfairy

She could sign it before bankruptcy and then go bankrupt if needs be. Probably best just not to sign anything at all.
df

[Deleted User]

1981trouble wrote: »

How does the repo affect her credit file (is spotless otherwise)

If her name is on the mortgage, then it will impact here file.

is there any appeals which she could try to reduce the impact

I'm not aware of any.

She suspects ex partner will go bankrupt.

That's quite possible.

She has no assets herself, some savings and a car.

You've just contradicted yourself.

If she has savings and a car, then she has assets.

if it now goes back on markets for repo, and then sells for less she is worried she will get hit for shortfall if he goes bankrupt.

She will get hit for shortfall, as they are "joint and severally liable".

rizla_king

1981trouble wrote: »

The house was sold for enough to cover mortgage etc and each walk away with small amount.

Did it? Not actually sold though was it?

1981trouble wrote: »

if it now goes back on markets for repo, and then sells for less she is worried she will get hit for shortfall if he goes bankrupt. what happens with the current buyers? Will bank keep them or readvertise? She is considering getting in first and going bankcrupt to avoided being hit for any shortfall.

If there are buyers willing to pay that will cover the mortgage with some spare and the bank snubs that to sell at a loss then you would have a VERY good case to complain and take it to the FOS.

https://www.nationaldebtline.org/EW/factsheets/Pages/11%20EW%20Mortgage%20shortfalls/Page-05.aspx#quicklink2

You arranged a sale which was refused by the lender, but after repossession the house was sold by the lender for a much lower price.

Is listed as a prime example as a case where you can complain.

1981trouble

Sorry for confusing people not using specific terminology.

The property was sstc which is about as close as you can get without it being sold, which it clearly wasn't given the fact it was able to be repossessed. Great to know that if they then went on to accept much lower offers that you could appeal.

She is very aware that she is jointly liable for the property and is also very aware that ex partner will do all he can to reduce his liability so needs to protect herself.

Correct re assets - she has some small assets, small amount of savings (less than 1k) and a car which is a basic bog standard car (don't know if it would be valued below the allowed value when it comes to bankcruptcy - something to check). There are no other properties owned or equipment which would be seen as assets to be worried about if she was looking at bankruptcy.


Re the appeal, I was wondering if there was anything linked to the fact that the bank didn't update her details when she told them and that they don't seem to have made much effort to contact her (but we don't know that for definite until they respond to sar). Whether a notice of correction would be able to be applied there (bank have said if they had been told about sale they wouldn't have repod and had she known about repo she would have told them about sale!)

Apologies in advance if there are any other technicalities I have mistyped and need clarifying.

Tillytwopaws

Hi 1981trouble.
I've worked on behalf of banks as a complaint investigator, some complaints I dealt with involved the repossession of properties. I found some repossessions to have been done fairly, and a couple unfortunately weren't. As a complaint handler, I only had written contact with the customer to maintain impartiality, and the case was investigated using all the information systems and call recordings available to me.

My investigation would cover the entire life of the mortgage, and would take into account whether the customers cooperated with the lender, whether there were any unfair charges applied to the account which would have added to the debt, whether the lender was in possession of key pieces of information that it didn't act upon (ie had your friend updated her address and it wasn't actioned correctly, the lender had been made aware of the impending sale). I would also investigate whether the lender followed the correct timescales and repossession procedures.

The lender might well have followed all the processes and timescales etc correctly in which case there may be nothing that can be done. But it might not have. You might be as well having a full conversation with your friend, see if she can remember any more facts and make a decision whether to submit a complaint.