Help with Kensington mortgages

chrislee2810

Hi,

I really hope someone can help.

I took out a secured loan with Kensington mortgages back in 2005 and struggled to keep up on the payments.

In 2009 I defaulted on my house and it was repossessed, there was a shortfall in the selling price of the house, my current mortgage lender stated that they would not chase the debt.

The issue now sits with Kensington mortgages, the house was sold in 2009 and Kensington have not defaulted the debt but keep submitting 6s on my credit file.

I have a feeling that it was around 2006/7 that I fell behind on my payments but the debt never defaulted.

Kensington have not once written to me, even though they know my address.

I really am not sure of my next move, I am aware that the limitations act works differently with a secured loan.

But I really would like to know how the limitations act works and what I should do with the fact that they will not default the debt?

chrislee2810

Any advice?

Westminster

Tricky - but the lack of default is going to cause you trouble.

I'm only personally experienced with vanilla credit card debt / defaults but I believe certain debts are recorded for 12 rather than 6 years and think that mortgage debt may fall into that category.

However, as they continue to record monthly history - this could in theory remain visible on your account until you repay it or it does become eventually statute barred (and even then - that means its no longer enforceable and doesn't necessarily mean it drops off your credit file as far as I know.)

I'm sure someone with more knowledge with mortgage debt will be along to advise more accurately!

chrislee2810

Thanks for you help, surely they can not just report 6s forever?

Westminster

When did you last make any payments on this account?

chrislee2810

Hi Westminster, I can only go as far back as November 2009 on equifax, on this month it is showing a 6.

fermi

You can complain pointing out that they have failed to record an accurate history of the account, and as such they are in breach of the Data Protection Act 1998 and ICO guidelines from that time.

Say that unless they correct the entries by recording a default backdated to the date of repossession, you will be taking them to the FOS and reporting them to the ICO.

http://webarchive.nationalarchives.gov.uk/20100428141142/http://ico.gov.uk/upload/documents/library/data_protection/detailed_specialist_guides/default_tgn_version_v3%20%20doc.pdf

4 It is an accepted industry standard to record only serious ‘defaults’ with credit reference agencies. The term ‘default’ on credit reference files is used to refer to the situation when the relationship between the lender and borrower has broken down. A record showing a series of payments as six months in arrears when this does not reflect the real payment history should not be used as an equivalent of a default. Where a code is used to describe a default or variation in payment, it should always be accompanied by an explanation in plain and intelligible terms which informs the reader of its meaning.

10 Indicators of a default

• The account has been referred to a collection agency or in-house debt collection department.
• The account has been referred for legal action.
• The account has been included in a bankruptcy, IVA, or similar.
• The asset financed has been repossessed or instructions for repossession have been given.
• The lender takes or has taken steps to cut off the service provided (or would do so if they were not prevented on social rather than commercial grounds or by other regulations, codes of practice or statute).
• The customer has not made satisfactory proposals in response to a demand for repayment.
• The customer has given a clear indication, for example, by handing back an asset, that they do not intend to meet their contractual obligations.
• The lender has evidence that an account has been opened or used for fraudulent purposes by the applicant.

14 Long-term secured loans

Although long-term, secured loans, such as mortgages, are likely to involve monthly repayments, they are an exception to the general standard. The existence of a secured asset which, if repossessed, will indemnify the lender, and the length of the term involved, distinguish this category from the majority of products. This may mean that the lender is prepared to allow the customer greater latitude if the account gets into difficulties. A lender may decide that, even though one or more of the above indicators has occurred or more than six months has passed without a payment being received, there is no breakdown until they have decided to take possession of the asset. Nevertheless, there are practical problems facing lenders in these circumstances because in some cases, even after court action to gain possession has been taken, a customer will go on to repair the relationship by starting again to pay on a regular basis the contractual sums (or at least an agreed compromise sum that would constitute a variation in payment terms as indicated in paragraphs 17 -23).

If meaningful information is to be reported to credit reference agencies there needs to be a consistent approach by lenders that also needs to take account of the practical problems they face. This is also necessary to treat all customers in this situation fairly. Consequently, a lender should file a default no later than six months after the date of a successful court application to proceed with possession unless

• the customer has made reasonable and agreed arrangements to repay,
• the lender can justify not filing a default on an exceptional basis. For example, the lender is fully informed of the circumstances and knows that payments will start again, or
• the loan has been included in a bankruptcy in which case the default should be filed in accordance with the guidance in paragraphs 47 – 48.

In rare circumstances the court can grant possession on conditions that delay physical repossession for a long period of time, even though the customer is not making an acceptable agreed level of repayment. This is usually on compassionate grounds. In these circumstances the lender should record a default within the six month period of the order date.

fermi

That is beside any point regarding Limitation on the loan.

If you intend to try to sit out the 12 years without rocking the boat, then obviously you would have to leave the CRA entry as it is.

chrislee2810

Thank you so much Fermi, I will write a letter to them tonight, should I be using the original mortgage default date?

chrislee2810

I would like the debt taken off my credit file, once this has happened I would be happy to start a payment plan for the balance.

chanz4

is this on noddle by any chance?