remortgage with a charge on the house??

Ian_Griffiths_Halifax

Then they may want their money if they think there is equity in the house.

If there isn't a charge on the house now but you try to remortgage later, any new lender may not allow you to remortgage to them unless the repossession lender is paid off.

I had a situation like this and the client managed to come to an arrangement with the lender and only paid £4,000 for a £20,000 debt.

LJW_2

Hi this is £24.000 and offered £5.000 through the cab but they said not and are now trying to get a charging order. I would prefer to offer them more do you have any advice that could help?

Ian_Griffiths_Halifax

Offer them a touch more but where would you get the money from? You may need to remortgage to raise it!

Somebody came on here a few days ago who knew about rule changes relating to old repossessions prior to a certain date. Hopefully they will see this and comment.

In the mean time, take a look at this thread.

http://forums.moneysavingexpert.com/showthread.html?t=880057&highlight=Repossession

mightymouse

Hi

Can you confirm that the period is more than 6 years between repossession and first contact, this includes any letters that might have been put in the bin.

LJW_2

Hi it is more than 6 year probably around 10 but CAB have been dealing with this and for matters to do with housing its 12 years!

mightymouse

Hi

The Council of Mortgage lenders and then FSA have by agreement limited the lenders ability to recover if no contact made within 6 years from 2000:-

How long after my property is taken into possession can a lender pursue me for a shortfall debt?

In England, Wales and Northern Ireland, a lender legally has 12 years in which to contact the borrower to begin the process of obtaining repayment of shortfall debt; this period is usually 5 years in Scotland.

From 11 February 2000, lenders who are members of the CML have agreed voluntarily that they will not pursue a shortfall debt following a mortgage possession if they have not managed to contact the borrower within a period of six years from the date a property was taken into possession.

Residential mortgages sold after the 31 October 2004 are regulated by the Financial Services Authority (FSA). The mortgages conduct of business (MCOB) regulations follow the standard set by the CML voluntary agreement, requiring lenders to begin proceedings to collect a shortfall debt within a period of six years.
Top

© Council of Mortgage Lenders 2006

I think I am right saying that you did not attend the Court hearing re the debt which led to the interim charging order and that there is a further hearing in June to make the charging order final.

On Monday I will check with the FSA re their reaction to lenders and / or their agents persuing claims which are outside the agreement, there may be an option to take this back to Court and also postpone the charging order hearing in June.

I will post back here re their comments.


Ian Griffiths suggested looking at this

http://forums.moneysavingexpert.com/showthread.html?t=880057

LJW_2

Hi mightymouse that would be great if you could do that, it's quite confusing all this legal stuff. I't nice to get help off her though!:j

silvercar

LJW wrote: »

Hi Ian, i will explain a little. My OH may be having a charge put on our joint home from a shortfall from a home he had 10 years ago. We got a 100% mortgage between us. Is this what you mean?

If he has acknowledged the debt in any way in the first 6 years since the repossession took place then he will be liable for the shortfall.

The CML agreement with mortgage lenders relates to debts that were never chased or acknowledged ie borrowers disappeared and lenders never sought to find or found them. Once the lender and (ex-) borrower are in contact the parties will have to agree on a repayment schedule or at least accept that the debt exists.

The usual attitude of lenders is to leave the repossessed sort themselves out for a few years and then re-examine their situation to see if they are in a position to make some repayment. In the meantime the debt grows with interest.

Whereas years ago (early 1990s) the practice of repossessions was more shady, with lenders not always acting in the best interest of the repossessed. Since then, and certainly since the agreement, lenders are making efforts to show that they havve secured the best price (acknowledging the need for a quick sale and the market). The CML agreement goes some way to balance the mistakes of the past.

Back to your case. If the debt has been acknowledged the lender would be allowed to chase for the repayments and if they can't reach agreement may well try to put a charge on the property. I think they would either have to get agreement of your other half or go to court to do so.

In the mean time there is nothing to stop you remortgaging before they put a charge on the property.

If you downloaded the deed from the land registry site (£3) you would see if there was a charge. Quaintly, I think the site is closed for purchases on a Sunday.

LJW_2

Hi the company took 11 years to look for my OH so do you think we have a case. Although he has now had to acknowledge the debt through the CAB and has a ccj and interim charge on the house!

mightymouse

Hi

I have spoken to the FSA,FOS,CML & RBS and considered your position regarding mortgage shortfall and its recovery by your lender.

It is crucial that you are able to say that the Bank has not contacted you for a six year period since February 2000.

The concensus of opinion is that the Lender has probably written to you but that you have not responded to their contact.

I quote a paragraph which your previous lender adheres to and if 'no contact' then you have grounds for complaint to the Financial Ombudsman.

We will comply with the law and relevant codes of practice or similar documents which are followed by members of the Council of Mortgage
Lenders.

The main codes include:

CML Statement of Practice on Handling Arrears
and Possessions;

CML Statement of Practice on the Transfer of
Mortgages;

BBA/BSA/APACS Code of Banking Practice;
Association of British Insurers General Business
Code of Practice;

Ideally you will need copies of all the paperwork held by the Lender but as you now have Judgment against you it might be possible on a 'without prejudice' basis to ask them for proof of contact.

I will stop there and if you are able to show that contact was made after 6 years has expired then I will go on the the next step.