Mortgage Repossession on an Inflated Debt Caused by Bank Errors

Domsjo

BikingBud said:

You mention co-signatory a few times, how have they managed to avoid their liabilities?

Short version: its because I'm honouring the debt (as in I'm still paying the monthly installments and theyre all up to date) and I'm in the property so they know they can pursue me for it - its an unjust system that penalises honesty and accountability. The long version is like something from Eastenders - I'll try summarize what Ive pieced together.

He was born SURNAME X, grew up through step parent SURNAME Y it was never made official. Co-signed as Y, banks underwriters were a bit sloppy. A few years after leaving property CSA began referring to him as X. I notified bank to update their records, they dismissed the info. I updated bank again in writing during foreclosure and again they dismissed the info, then denied knowledge in court. Bank wants to sweep it under the carpet, says its immaterial to case. I say its very material as it traps me into repossession or a cash settlement I cant afford. FCA have logged it but cant intervene and directed me to ombudsman. Ombudsman don't see the issue as being unfair (!?). Court - so far 2 judges with 2 different approaches to this fiasco. Key take away - he didnt benefit long term from the misrepresentation, and he was young and made a mistake. I dont think theres anything he could do without exposing himself (and possibly me if I co-sign anything) to risk of an offence. The Housing Association (its shared ownership) are a whole other can of worms in this, and I had to approach them to get permission for sole ownership to try sort it out - I cant tell if theyre sat twirling moustaches or just incompetent, I would never recommend this scheme, and they issued the form for repossession under the guise of sole ownership. But yeah, its been eye opening!

Domsjo

silvercar said:

Domsjo said:

silvercar said:

Domsjo said:

MWT said:

The tricky part from what you've posted so far is clearly showing there have been mistakes made by the lender, and although that will help, failing to repay what you believe to be the correct amount still leaves the door open for them to claim reasonable legal costs.

Hope you can get a good outcome though...

Thank you. Yes youre right, while there is a clear paper trail of all their mistakes and misleading evidence, unfortunately they can still pursue their full claimed amount through court unless the true amount is agreed in writing - though this did make me consider if I should just ignore their rejection and pay them, see what happens?! 

Theres still mediation to thrash out any last options, and I can query if 100k is reasonable against the debt. You never know!

I would definitely pay what you think you owe. Then any repossession hearing becomes them taking action over an even smaller amount, making their projected legal costs even more disproportionate.

silvercar said:

Domsjo said:

MWT said:

The tricky part from what you've posted so far is clearly showing there have been mistakes made by the lender, and although that will help, failing to repay what you believe to be the correct amount still leaves the door open for them to claim reasonable legal costs.

Hope you can get a good outcome though...

Thank you. Yes youre right, while there is a clear paper trail of all their mistakes and misleading evidence, unfortunately they can still pursue their full claimed amount through court unless the true amount is agreed in writing - though this did make me consider if I should just ignore their rejection and pay them, see what happens?! 

Theres still mediation to thrash out any last options, and I can query if 100k is reasonable against the debt. You never know!

I would definitely pay what you think you owe. Then any repossession hearing becomes them taking action over an even smaller amount, making their projected legal costs even more disproportionate.

Thanks - I'm weighing this up as a serious option - it sounds so obvious, none of the agencies or advisors (legal, debtline) have floated this as an option, is there a risk I'm just not seeing? Financial risk is it leaves 0 assets to use for moving costs/rent deposits (maybe even the mediator bill!) if they still pursue repossession, but is there a procedural or legal risk I've not considered before I start a transfer?

I’m not a lawyer, but I can see a gain in keeping to what you think the original terms of the mortgage were.

The only downside I can see is if you went bankrupt after repossession, then your debt falls into your bankruptcy. So if you’ve paid money back that would have fallen into the bankruptcy, it’s money that you wouldn’t have needed to have paid. Though I suppose you would lose it in bankruptcy unless you could spend it in advance on essentials. And as you say, if you need that money for moving or rent it isn’t available to you if you’ve paid it over. Though you would end up needing to pay that part back in any circumstance eventually (other than bankruptcy).

Yes, thats my default worst case scenario I'm planning for - repossession, breathing space, rent and deposits, moving (I will have to pay out some legal fees upfront, like mediation orders which is a few k), then bankruptcy. The repossession is a 6 year default to credit file anyhow, but depends how much their legal fees are. I'd say the property - at 50% of value might be 70-85k, but its run down and needs about 30k sinking in to resell. Its SO so not a quick sale, likely 9-12months+ (dunno how that affects costs), the legal fees  - realistically lets say another 30k for a 2day hearing if it went that way (assuming the 70-100k was a scare tactic) - they may just scrape what theyre asking, but the margin is very thin. I don't know if bankruptcy is something that ever fully goes away - but Im not really at a 'bounce back from it' age anymore

silvercar

Domsjo said:

silvercar said:

Domsjo said:

silvercar said:

Domsjo said:

MWT said:

The tricky part from what you've posted so far is clearly showing there have been mistakes made by the lender, and although that will help, failing to repay what you believe to be the correct amount still leaves the door open for them to claim reasonable legal costs.

Hope you can get a good outcome though...

Thank you. Yes youre right, while there is a clear paper trail of all their mistakes and misleading evidence, unfortunately they can still pursue their full claimed amount through court unless the true amount is agreed in writing - though this did make me consider if I should just ignore their rejection and pay them, see what happens?! 

Theres still mediation to thrash out any last options, and I can query if 100k is reasonable against the debt. You never know!

I would definitely pay what you think you owe. Then any repossession hearing becomes them taking action over an even smaller amount, making their projected legal costs even more disproportionate.

silvercar said:

Domsjo said:

MWT said:

The tricky part from what you've posted so far is clearly showing there have been mistakes made by the lender, and although that will help, failing to repay what you believe to be the correct amount still leaves the door open for them to claim reasonable legal costs.

Hope you can get a good outcome though...

Thank you. Yes youre right, while there is a clear paper trail of all their mistakes and misleading evidence, unfortunately they can still pursue their full claimed amount through court unless the true amount is agreed in writing - though this did make me consider if I should just ignore their rejection and pay them, see what happens?! 

Theres still mediation to thrash out any last options, and I can query if 100k is reasonable against the debt. You never know!

I would definitely pay what you think you owe. Then any repossession hearing becomes them taking action over an even smaller amount, making their projected legal costs even more disproportionate.

Thanks - I'm weighing this up as a serious option - it sounds so obvious, none of the agencies or advisors (legal, debtline) have floated this as an option, is there a risk I'm just not seeing? Financial risk is it leaves 0 assets to use for moving costs/rent deposits (maybe even the mediator bill!) if they still pursue repossession, but is there a procedural or legal risk I've not considered before I start a transfer?

I’m not a lawyer, but I can see a gain in keeping to what you think the original terms of the mortgage were.

The only downside I can see is if you went bankrupt after repossession, then your debt falls into your bankruptcy. So if you’ve paid money back that would have fallen into the bankruptcy, it’s money that you wouldn’t have needed to have paid. Though I suppose you would lose it in bankruptcy unless you could spend it in advance on essentials. And as you say, if you need that money for moving or rent it isn’t available to you if you’ve paid it over. Though you would end up needing to pay that part back in any circumstance eventually (other than bankruptcy).

Yes, thats my default worst case scenario I'm planning for - repossession, breathing space, rent and deposits, moving (I will have to pay out some legal fees upfront, like mediation orders which is a few k), then bankruptcy. The repossession is a 6 year default to credit file anyhow, but depends how much their legal fees are. I'd say the property - at 50% of value might be 70-85k, but it’s run down and needs about 30k sinking in to resell. Its SO so not a quick sale, likely 9-12months+ (dunno how that affects costs), the legal fees  - realistically lets say another 30k for a 2day hearing if it went that way (assuming the 70-100k was a scare tactic) - they may just scrape what theyre asking, but the margin is very thin. I don't know if bankruptcy is something that ever fully goes away - but Im not really at a 'bounce back from it' age anymore

If you are planning for bankruptcy, that’s a whole different ball game. The advice you need is totally different from if you are hoping to walk away even with a debt that you will eventually clear. Bankruptcy is totally different from a repossession, I wouldn’t assume one would lead to the other.