Mortgage shortfall

Np123

Hi everyone I wonder if anyone can help me please bit of a long story. I split up from my ex husband back in 2012 due to a really bad relationship where he was an alcoholic and kept loads of financial difficulties secret from me.

We also had 2 children aged 10 and 13 at the time, the youngest with severe learning disabilities and autism. I left the house which was in joint names although I did not earn much money at the time and when the mortgage was set up I was just a housewife. I then lived in rented accommodation and unfortunately my ex husband defaulted on the mortgage and the house got repossessed in 2012. My ex husband was a mortgage advisor and took out an interest only mortgage of 220k I think back around 2009.

I signed the forms trusting him being a mortgage advisor (daft I know) but did not get any advise or see any of the paperwork apart from what I signed( I didn’t take much notice to be honest as I was too busy with my child at the time) my ex husband claimed he was paid 70k per year although I never had a joint account with him and trusted him at the time . We never saw anyone else for the mortgage it was just him that did paperwork.

The house got sold for 150k so nram are now coming after me for the 70k shortfall. I have been paying a pound a month for the last 2 years, don’t earn much money have no assets etc. I have asked them to write off the balance or take 632 as full and final as I will never be in a position to pay this amount and it would take 632 months to pay off .

This is the amount to go bankrupt which I don’t really want to do. My mum and dad would do this for me. I have sent them doctors notes regarding my son and my state of mind with all the worry of everything. I have complained to them and asked for details of the mortgage as when I left my ex had all the paperwork . Any advice would be greatly appreciated

sourcrates

Hi,

They can’t take what you don’t have can they.

If you have no money or salable assets, the creditor is left with few options here.

Keep bankruptcy as a back up, but I don’t think they will chase this for long, have you explained your circumstances to them, if not do so, in writing.

Just_Di

Np123 wrote: »

The house got sold for 150k so nram are now coming after me for the 70k shortfall.

May I ask you a few questions before making any suggestions as to the way forward

If this was a joint mortgage the 'shortfall' would be the legal liability of both you and your ex-husband. Are you officially/legally divorced with a financial court order etc?

Who is chasing you for the mortgage shortfall? Is it NRAM or has the debt been assigned to Whistletree or Landmark etc?

Was this a Northern Rock Together Mortgage which included an unsecured loan (LTV 125%) where the interest would have shot up if 'delinked' .

Was there a MIG with the Northern Rock mortgage? A Mortgage Indemnity Guarantee means that an insurance company pays the lender for any shortfall after repossession. The MIG provider then pursues the borrower for the shortfall.

What information do you have about the repossession and sale?

Was it a voluntary repossession (who handed in the keys?) or was is subject to a Possession Order with a money judgment for arrears?

Was the property sold at auction below market value?

Di

enthusiasticsaver

They should also be going after your ex if it was a joint mortgage.

Just_Di

enthusiasticsaver wrote: »

They should also be going after your ex if it was a joint mortgage.

If this was a joint mortgage then the lender can choose to pursue either/both borrowers since they will be joint and severally liable for the debt.

In practice they will pursue the one ‘with the deepest pockets’

Di .

D_M_E

I'm keeping a note of Just Di's questions above for future reference.

I for one am glad we have Just Di commenting and posting on the forums and long may she continue.

Np123

Hi sorry for late reply. Yes I am divorced. I think it was a together mortgage there was 27k and 43k in the shortfall, 27k is for loans. I asked for information regarding the sale but they have not replied they just sent me a copy of the final statement. I don’t know if there was any MIG. I have gathered together evidence to say I cannot and will not ever be able to pay this off by means of letters from social workers . I also think it was sold below market price and it was repossessed because my ex husband did not pay the mortgage . I had to leave him and pay rent for myself and my 2 children . I have an appointment with CAB on Monday . I have proof of my earnings and my p60’s. Thank you for any help at all it is just so worrying

D_M_E

When I had a morgage - now paid off - the MIG premium was added to the amount borrowed, so if you have any documents from the time you took out the mortgage it should be documented there.

Also, my MIG was in one name only, both borrowers named on the morgage were not both named on the MIG but don't know and never queried if this was a mistake.

EDIT - you say you are divorced, what was the divorce settlement? Did the court order the ex to make mortgage payments and you make none? Did the court order have anything to say about finances?

fatbelly

Mortgage shortfall debts do often get settled for very small percentages precisely because the debtor is in the situation like this one - no assets, no surplus income, just one large debt.

Below 1% would be a bit optimistic though I have seen them settled for 5p in the £

I don't see any point in token offers. The limitation period is 12 years for secured debt - if you had not started those payments you would be halfway there by now.

They have two options - both would be them throwing good money after bad.

They could issue a statutory demand. Lodging it with the court would cost them about £3000 and they would likely get noting back.

They could start a court claim. Again I think the costs are over £3000 for that size and they would probably get nothing but could make a nuisance of themselves. They could also find it not straightforward to get a judgement if their paperwork is not in order and you have someone like Di on your side.

They are chasing you because they can find you. If you petitioned for your own bankruptcy they would have to leave you alone and find your ex.

If there was no good reason not to go bankrupt, that's what I would suggest, and take you parents' offer to help with the £680 fee.

D_M_E

Just noticed - you also indicate he was an alcoholic and controlled finances too.

Did you get any support for this and was any allowance made in your divorce settlement for this as it can constitute an abusive and controlling relationship?

Np123

Hi I didn’t get any money in the divorce to be honest at the time I just wanted it finalised . The divorce papers state he was an alcoholic and emotionally abusive I seem to recall