Mortgage shortfall option

Jason6713

Hi All

8 years ago I had my home repossessed through nobodys fault but my own

I am still being chased for the mortgage shortfall. The mortgage was with Birmingham Midshires, I tried to come to a settlement with their first company shoosmiths but this was unsuccessful, I heard nothing for two years and this has now moved on to a company called Moorcroft so the back and orth offers will begin again for a settlement

I have since had credit card,mobile phone contract and a small loan which have all been paid and had no missed payments

My partner I am now with has equity in the property and is willing to use the equity to make a reduced offer of settlement, what I would like to know is would a mortgage company give us a mortgage putting me on to the mortgage when the funds are taken out to settle the old mortgage shortfall.

All help appreciated

Jason

National_Debtline

Hi Jason,


Mortgage shortfalls can be a particularly complicated debt and the tactics you may use to settle it may vary depending on the details. It sounds as though you have been reasonably engaged with this debt over the last 8 years, so I don't think there would be an issue of it being statute barred (but that needs to be checked).


The shortfall has likely come off your credit file which will have helped your rating improve and could explain how you have been able to obtain more credit again.


When it comes to the settlement, you need to consider this carefully. If you are able to borrow money out of your partner's property (pay fees to re-mortgage) and then the settlement offer is rejected, you will be further out of pocket. So, you may want to test the waters with the debt collector first or consider other options such as monthly repayment options, or perhaps even a longer phased full and final offer (over several years). It may help if you post a SOA.


Laura
@natdebtline

Jason6713

Thank you Laura for taking the time to reply
I was hoping I will be able to come to an arrangment with the Moorcroft and once a reasonable settlement fee thatI could afford was made then do the remortgage to pay them with, or as you said look into a monthly plan with them to pay off over a set number of years. The battle is to get a reasonable settlement figure, the first company shoosmiths would not accept one, I never heard again for 18 months unitl now where the original mortgage company contacted me to say it will be passed to a new company. The shortfall was for £67000 to which I would never be able to afford so hopefully the new compamy will be more willing to look at a reasonable settlement offer

fatbelly

With mortgage shortfalls, National Debtline have always provided an excellent selection of standard letters. They still exist but are more scattered around their website.

The factsheet does link to them

https://www.nationaldebtline.org/EW/factsheets/Pages/mortgage-shortfalls/mortgage-debt.aspx

You are not starting from scratch here so asking them to prove the shortfall, or write it off, may not be appropriate, unless you want to make Moorcroft jump through the hoops.. But I'm sure you'll find some useful info here.

Personally I wouldn't raise secured debt to repay non-priority unsecured debt.