Property repo'd and sold - So Shortfall Debt becomes a reality

[rory32]

Mods - i wonder if this could be moved to the "Mortgage Thread"

 

 

Done.

[nuke em]

Thanks !

[nuke em]

It wasn't just my lender that wouldn't put anything in writing initially. According to what I was reading in the press (not tabloid) at the time, several lenders were trying to negotiate over the 'phone in order to try and settle shortfall debts. I assume this was so that they could secure a good deal for themselves, while questioning the borrower at the same time about financial reserves, etc.... before committing themselves to anything in writing.

 

My own situation was... that I left the property and moved away to start a new life. Although this looks very reckless and irresponsible, I had very good reason to do so at the time... As expected, the lender eventually traced me and I had a scary letter on the mat one morning.... so game up, so to speak. I contacted them in writing and explained the situation as it was, detailed my circumstances (income/outgoings) and offered token payments on the shortfall.

 

I then wrote and said that I didn't think it fair to chase me for £52K, when my partner was named on the mortgage as well.... so they agreed (in writing) to split the liability in half.... to £26K, with interest frozen on my half.

 

Throughout these early exchanges, they assumed that they had nothing to gain by pursuing me for a huge amount, ie... another property. They didn't ask and I didn't tell them. They assumed that I was renting and when I twigged this, I listed my mortgage as "housing costs".... so I never lied about it either.

 

If it had gone to court, then there was a good chance that I would have had to disclose this info... which is why I offered token payments straight away and appeared co-operative from the start. Due to my circumstances, they accepted £10 per month.... which I had chopped down to £5. Paid £5 per month from then on until I had my 1st letter through asking for £5K in F&F.... and could I ring them to discuss ? I didn't have £5K, so they reduced it to £3K in a bid to get me to settle.... only I didn't have £3K either...

 

Months went by... then the next letter asking for £3K in F&F... and could I ring them to discuss ? Didn't have £3K... so they reduced it to £1K in a bid to get me to settle... but I couldn't get hold of £1K either.

 

Months went by.... until I decided to contact them myself one day. Rang up and spoke to a very nice lady there... Explained that they had sent me letters in the past to try and reach a settlement and were they still willing to do this ? She said that they would be willing to consider any offer, of course. I then said that I was almost embarrassed to say what I could afford.... but she encouraged me to do so.... so I said £500.

 

She then said that she would approach her Manager with my offer and get back to me. She also said that I had shown a great deal of commitment to repaying this debt, even thought these were only token payments.

 

Next morning I had a letter stating that they would be willing to accept the £500 in F&F, Experian would be notified and their files would be closed.

 

It was over.

 

I'm not suggesting that you go down the same route as me... when you have another property it's a risky game to play. I had no choice... and that's why I played it as outlined above. If you wanted to, you could go down the S.A.R - (Subject Access Request) route to re-claim charges and then negotiate on the remaining balance.

 

If this was me going through what you are though.... I wouldn't tell them that you own other properties for now and certainly not in writing.... whether they're being auctioned or not... Do a little digging to see how much they will settle for without knowing this info.... and go from there. If they are completely unwilling to consider a F&F with you, then go down the S.A.R - (Subject Access Request) route....

 

I used to have a saying... "Life is but a game of Chess. If in doubt, move a Pawn" In other words, move slowly until/unless they get p*ssed off with you.

 

Hope it helps...

 

 

I do like this stratergy but my problem is too many properties. This will be like a pack of cards when it all caves in. Dont think i will be able to do F&F with the lenders even one at a time, guess BR is where i will end up. Cant even be bothered to claim the illegal charges back on the basis it wont make much difference to my financial position, it will all end up as shortfall debt anyway. Sold my house a while ago now so in rented anyway.

[nuke em]

Had an absolute blinder last week, discovered that a possession order was granted last month on one of my properties. ( i try and defend all my repos if only for the experience and to see what judges will & wont accept, afterall i have lost everything already so what more do i have to loose?)

I had no clue that the lender had even started proceedings, cos the tenant only sent me all the mail, threatning letters, LBA, court hearing date & COURT judgement date etc to me in one big bundle last Friday - by then it was too late, possession had already been granted in my absence. I was thinking about doing a N244 to try and get the order stayed on the grounds of being incorrectly served (the lender knows it was a BTL property and that i dont live there) but whats the point?, with the wolves getting nearer & the buzzards circling above......Nuke em is getting Nuked!!

[PriorityOne]

Your situation with BTL is out of my comfort zone, but I do think that everyone needs to defend themselves as far as possible with these vultures.

 

If an N244 is what you need at this stage, then submit one and PM one of the mods. for help. Your creditor(s) certainly won't expect you to do it and you may just get a result.

[nuke em]

Your situation with BTL is out of my comfort zone, but I do think that everyone needs to defend themselves as far as possible with these vultures.

 

If an N244 is what you need at this stage, then submit one and PM one of the mods. for help. Your creditor(s) certainly won't expect you to do it and you may just get a result.

 

Thanks P1

 

I did think about that, however & even though i have not been correctly served, i am still in arrears and cant afford to pay them off, so the judge still has to give possession to the lender. All i would be doing is throwing good money after bad defending it. ( i also would advise anyone else to do what you are advising me as well but in my situation it wont make a hill of bean's worth of difference )

 

This is the year of record Repossessions afterall

[Ell-enn]

Hi there, don't you think it would be a good idea to submit an N244 asking for suspended possession? this would give you time to make proper arrangements. If you need help with submitting the defence please let me know.

 

Kind Regards

 

Ell-enn

[Killerschick]

With regards to your comments about mortgage lenders, it sounds as though you are dealing with buy to let mortgages and in this case you are going to find very little sympathy from either lenders or the courts.

Buy to lets aren't regulated by the FSA so their guidelines do not apply.

Lenders and Courts are generally sympathetic to someone struggling to keep their home and want to help avoid them being made homeless.

But when it's a buy to let gone wrong it's basically just a poor investment choice the same as if you'd bought shares that went down in value etc. This is probably why you've found the lenders to be quite tough. The fact that there is no equity in your properties is another contributory factor. When a lender stands to make a loss, they will try to accelerate their action to minimise that loss.

You admit you can't pay the arrears and in that situation there is little that the lender or the Courts can do. I would agree with the earlier recommendation that when all the properties that you are likely to lose have been repo'd and sold i.e. the debts have been crystallised, that you consider bankruptcy. As you have already sold your own property this will probably be relatively painless.

If you have money available now, rather than settling the shortfalls already incurred perhaps you could use it to try and stave off repossession on some of your remaining properties? Or if you really think you are going to lose everything, let it happen and then go bankrupt.

[nuke em]

With regards to your comments about mortgage lenders, it sounds as though you are dealing with buy to let mortgages and in this case you are going to find very little sympathy from either lenders or the courts.

Buy to lets aren't regulated by the FSA so their guidelines do not apply.

Lenders and Courts are generally sympathetic to someone struggling to keep their home and want to help avoid them being made homeless.

But when it's a buy to let gone wrong it's basically just a poor investment choice the same as if you'd bought shares that went down in value etc. This is probably why you've found the lenders to be quite tough. The fact that there is no equity in your properties is another contributory factor. When a lender stands to make a loss, they will try to accelerate their action to minimise that loss.

You admit you can't pay the arrears and in that situation there is little that the lender or the Courts can do. I would agree with the earlier recommendation that when all the properties that you are likely to lose have been repo'd and sold i.e. the debts have been crystallised, that you consider bankruptcy. As you have already sold your own property this will probably be relatively painless.

If you have money available now, rather than settling the shortfalls already incurred perhaps you could use it to try and stave off repossession on some of your remaining properties? Or if you really think you are going to lose everything, let it happen and then go bankrupt.

 

 

All correct as i see it, i'm just going through the motions, i am filing a defence and attending all the repo hearings, gaining good knowledge each time, quite often from the other side lawyers! My situation most prob will end up in BR unless i can pull some "houdini magic F&F" with all the lenders after all shortfalls are quantified.

[nuke em]

Update , all properties now repossessed , i know they going to sell them very short, any advice as to letter(s) i should be sending them about getting the best price, duty of care and the such lik ewill be much appreciated.

 

nuke em

 

down, out but not gone

[gizmo111]

What do you estimate the shortfalls to be and are you planning on bankruptcy?

[nuke em]

Yes bankruptcy will be definite option due to the sums that will be involved. but i will try and "Raise the Titanic" before hand by battling with each & every one of them on the give away ( & i mean even in these depressed times), the real give away prices they are selling them for. hence i need some strategies & template letters to fire off to them

[gizmo111]

If you are declaring bankrupt then it is not worth your energy worrying about the sale price - what difference if you go BR for £100K or £150K?

The only people who gain from selling at the highest price possible is the mortgage companies.

[nuke em]

true, i agree but i might be able to argue,delay, offer minimal f&f on each one and not go BR, i know its easier to go BR but i see it as a challenge. worst case if any of them dont play ball thats what i'll do

[TheChancellor]

Update , all properties now repossessed , i know they going to sell them very short, any advice as to letter(s) i should be sending them about getting the best price, duty of care and the such lik ewill be much appreciated.

 

nuke em

 

down, out but not gone

 

Sorry to hear your news NE.

 

Been there myself - early 90's - though admittedly not on that scale.

Were your tenants not playing ball or what started the decline - increasing mortgage rates?

 

Remember, you've done it once & you will do it again.You're not like the "ordinaries" sitting in the bank adding charges onto your account who'll never do anything else.

 

Cream always rises to the top.

[Rachie1973]

Interesting thread.

 

tell me..... when my house was valued at £270k in March and then repossessed in May, do you think that the mortgage company selling it at £199k in August is actually a point to raise if they chase us for the £10k shortfall?

[gizmo111]

Interesting thread.

 

tell me..... when my house was valued at £270k in March and then repossessed in May, do you think that the mortgage company selling it at £199k in August is actually a point to raise if they chase us for the £10k shortfall?

 

They will chase you, and I would get all details of the sale from them now regarding any offers they may have received. What were other propertied on a similar basis selling for in that street in August?

[rory32]

Skipton Building Society v Stott [2000] 2 All ER 779

 

Brief summary below.

After a sale by the mortgagee in possession, the judge at first instance had found that the plaintiff had negligently failed to take reasonable care to ensure that the premises were sold at the best price that could reasonably be obtained: Held: Where a lender having sold property secured by a charge took the property into possession and sold it, but failed to obtain the best price reasonably obtainable, any liability of a guarantor of the loan was reduced to the extent of that failure. In calculating damages the task of the court is to determine the true market value of the property, and where there is a bracket of acceptable valuations the court will take the mean figure within that bracket as being the market value.

 

Skipton is ruled out of court | From the Guardian | The Guardian

[Rachie1973]

They will chase you, and I would get all details of the sale from them now regarding any offers they may have received. What were other propertied on a similar basis selling for in that street in August?

 

There was nothing similar sold this year but the houses either side of us both sold within 3-4 months last year in excess of £250k, one of them twice.

 

Ours was in poor decorative order but 'sound' as it were, and it's larger than either side.

 

We didn't have any offers on the house, however the lender took off our seller and put it with another sole agent.

[gizmo111]

There was nothing similar sold this year but the houses either side of us both sold within 3-4 months last year in excess of £250k, one of them twice.

 

Ours was in poor decorative order but 'sound' as it were, and it's larger than either side.

 

We didn't have any offers on the house, however the lender took off our seller and put it with another sole agent.

 

That was last year though and house prices have dropped significantly since then. Did you have it on the market and how long for?

[nuke em]

Sorry to hear your news NE.

 

Been there myself - early 90's - though admittedly not on that scale.

Were your tenants not playing ball or what started the decline - increasing mortgage rates?

 

Remember, you've done it once & you will do it again.You're not like the "ordinaries" sitting in the bank adding charges onto your account who'll never do anything else.

 

Cream always rises to the top.

 

Thankyou Chancellor,i am certainly NOT like the "ordinaries" sitting in the bank adding charges onto my account who'll never do anything else. I think i was a good landlord, no complaints ever from tenants. provided good quality accomadation and provided the communities which i served a good service BUT i was foolish in buying so many properties ( that was def my fault) and the end it was interest rates that got me, not that any lender ever wanted to help me pre-repossesion, if they had of accpted those earlier proposals to cut my interest rates they would not be lookng at such huge shortfall losses now. I they "they" as i have no chance of paying them back unless they accept pennies in the pound in F&F settlement. So how smart were those lenders?, they could have reduced my interest rates for say 2 to 3 years, capitalised the balance of the outstanding interest and added it to the respective loans , wait for the corner to turn , they would of had me paying their interest charges ( a long term profit line for them) , i would have kept my properties etc etc instead not one of the would help now THEY and not ME ( 'cos the worst that can happen to me is Bankcrupcy ) will face huge shortfall debts on each property which they will have to write off against their tax liablilties ..Maybe thats just part of their business plan....

 

funny then when they screw up , like the N Wreck & Bradford & Lendanybody they just go cap in hand to us, the taxpayer and say "give us money we are in trouble"

 

And we, through our wonderful leaders, like to be the the Man from Del-Monte and say "YES" . pity they dont do the same to their customers

[nuke em]

Rachie1973

here is a template letter that has been doing the rounds. I havent used it in the last 4 months but when i did last use it back in June 2008 i havent heard back from that particular lender since then over an alleged shortfall debt of £33k - -----i guess they must still be collating the info i requested !. --- modify to suit

 

 

Lender name

Lender addrerss

 

Sent by recorded delivery

 

Your Ref

 

Property address :

 

Dear…….

 

I DO NOT ACKNOLEDGE ANY DEBT TO YOUR COMPANY

 

Re your letter dated [DATE], I am writing to you regarding the responsibility of the lender when selling the property As you are aware "THE LENDER" has a duty of care towards the client when selling the property. This means that the lender and any of its agents must obtain the best possible price at the time for the sale of the property.

As you are aware a lender who sells a property without due care can be sued for negligence.

A lender also has a duty to mitigate loss. You will be aware of Skipton Building Societyv Stott [2000] 2 All ER 779 where the lender failed to obtain the best price reasonably obtainable.

In order for me to deal with the matters you raised, please supply me with answers to the following points;

1. Please provide complete details of all marketing efforts employed by “”LENDER”to obtain the best price for property under your “duty of care” to the borrower

2. Give details of all Estate agents approached re the sale of this property, who was engaged and why, who was not engaged and why and what were the terms of engagement.

3. Please provide name & address of the Estate Agent then used to sell this property. Give details of why the choice was made

4. Please give details of each and every person who enquired about , looked over the property.

5. Please provide details of viewings, best offers received, what date they were received, from whom they were received and to whom were they made.

6. Please itemize all positive selling points that were written on the sales particulars prior to the sale of the property.

7. Please provide a copy of the sales particulars from the Selling agents.

8. Give copies of the required min three valuations that were instructed, what instructions were given, full contact details of the surveyors, who was contacted in each case and by whom.

9. Please provide property addresses of the comparatives that were used in making these valuations.

10. Please explain the involvement of /contact made to any Behind Market Value Companies in the sale of this property.

11. Please confirm the “LENDER” valuation of £AMOUNT on this property in “DATE” - [delete this item line if you have been with same lender for more than 3-4 years]

12. Please confirm my continuing efforts to sell the property that resulted in an offer of £AMOUNT from a qualified buyer that was sent in a letter to you in the {DATE} which you apparently choose to ignore. [delete this line item if not applicable]

13. Please explain how interest has been calculated since the start of the arrears and provide a full breakdown of any & all added charges.

 

I further confirm that I have no wish to communicate with “LENDER” via the telephone and I request that you remove any telephone number(s) you may hold for me from your records and that all future correspondence between us shall ONLY be in writing.

 

I look forward to receiving all the above information in due course from “LENDER” in due course.

 

Yours Faithfully

 

you

 

 

( if anyone can think of some modifications to this template it will be appreciated as i'm sure i will be needing to send if off many times more)

[Guest MamaG1]

This is a fantastic result, priority one, pls run me by how u achieved this in the end.

 

Maybe I could follow your method, and see where my saga goes from here. They have chased me for a shortfall of £103k SPML. they recently sent me a letter, in my current house owened before I bought the house that was re-possed, living in it with my family. I sent them back a letter saying I ccant help them unless they supply me more info on th epropertyin question and the contract. I am still waiting. Property repod in 2007.

 

 

Nuke em, I know its been a long time youve been on line, but can you pls help. what happened to your cases, I know it is very painful to go throuh all this pain of loosing every thing that u have worked for just like that all crumbling in your face and there seems nothing one can do about it.

 

But we shall rise again, but only this tome will be smarter.

 

Site team, can you please help get Nuke em an priority one to update us on their final outcome.

 

Please help

Edited April 5, 2010 by MamaG1

[nuke em]

MamaG1 , i have come along way since my first posts here in Oct 2007, for a start i now know that all Mortgages are fraud in factum, on the basis that the "lender" did not provide any consideration for the so-called mortgage CONtract. Basically you created the funds when you signed which they then "lent" you!!! ie they lent you your own credit!!!!.. straight up fraud!! my remedy revolve around commercial liens & estopple

[PriorityOne]

My final outcome was a F&F payment of only £500 on a (negative equity) shortfall balance of around £52K.... and that was approx. 12 years ago now.

 

Happy days...

 

No sure what Nuk'em's final outcome is to be honest....