'Legal?' Charges Relating to Repossession in 1991, West Bromwich Building Society - Any advice greatly aprpeciated

[Joy Chapman]

In the late 1980's my husband and I re-mortgaged our house, for the market value which was arond the £90,000 mark, with the West Bromwich Bromwich Building Society. Due to the ressession and my husband being made redundant we were no longer able to keep up repayments and our house was repossed in 1991. Since this time, we have been lucky enough to purchase another home using an interest only mortgage which we are still paying. Unbeknown to us at the time, as our property had been undersold, a deficit was incurred. It was not until approximately 10/11 years later that we were contacted by West Brom and informed that we owed £112,000. Due to alleged 'compound interest' this figure has now risen to £165,000. Although we have denied the debt, we have been forced by bullying tacticts into monthly repayments of £200 for the last 6/7 years. They also have placed a charge on our present property. My husband and I are both in our 60's. He is retired and unable to assist me in dealing with this due to serious mental health problems. Can any anyone please advise me on the legality of their actions? I can be no clearer on the exact dates as I am not in possession of the original documentaction and am awaiting duplicates from West Brom. Thank you in anticipation.

[42man]

Hello Joy....i'm desparately sorry to hear of your situation. It would obviously be of great interest to see exactly what this amount is made up of, should I presume you have sent off a subject access request to WBBS. Have you contacted citizens advice ? or the National Debtline ? (free and impartial advice - http://www.nationaldebtline.co.uk/ and also you might find this of interest - http://www.moneyadvicetrust.org/section.asp?sid=12

 

I'm sure you will also get some more advice from others in due course.....

[Joy Chapman]

Thank you for your advice, it is appreciated. We have made a Subject Access Request and are awaiting a response.

[Killerschick]

Hi Joy,

One thing you should definitely look at closely when you get the documentation about the loan is the date of the last payment before repossession and whether your later acknowledgement of the shortfall was within 12 years of that.

At the time you started paying West Brom (2003/04ish based on how long you say you have been paying them) it was generally assumed that the 12 years a mortgage company has to pursue a shortfall ran from the date a property was sold in possession. A House of Lords appeal case brought by West Brom (West Bromwich Building Society v. Wilkinson & Anor [2005] UKHL 44 (30 June 2005)) established that the limitation period of 12 years actually runs from the date of the last payment. In cases where no payment was made for some time before possession and/or a property took some time to sell this dramatically reduced the amount of time mortgage companies thought they had to pursue the shortfall. In your case as you reached an agreement before this case was decided it may even be that, unbeknownst to West Brom, their claim was already statute barred when they made arrangements to pay with you.

It's a tight time frame as you say you were contacted 10/11 years after possession but if you hadn't paid for a while before possession and did not admit the debt until some time after you were first contacted it's just possible there may have been a gap of more than 12 years and West Brom have no valid legal claim. I don't want to get your hopes up but seeing as you started paying at a time when the law had not been clarified there's a small chance you might not owe the money.

Even if the claim wasn't statute barred, another issue your post raises is that they are endeavouring to pursue you for compound interest. An earlier appeal case in relation to mortgage shortfalls (Bristol & West Plc v Bartlett & Anor [2002] EWCA Civ 1181 (31 July 2002)) established that a mortgagee has 12 years to pursue a claim for the principle debt under section 20(1) of the Limitation Act 1980 but interest can only be pursued for 6 years under section 20(5) of the Limitation Act 1980. Without having seen the grounds for their interest claim etc (and not being legally qualified – so don't take my word as gospel!) I wouldn't want to say that they are wrong but it is certainly worth questioning the basis for this interest.

It would also be useful to know whether West Brom took this through the courts and got a judgment and charging order or whether you voluntarily gave them a charge on your current property. If the debt is subject to a judgment, that could change the basis for interest charging depending on how the claim was worded.

 

If I can be any help when you do get more information then feel free to PM me.

 

KC

[sequenci]

If I can be any help when you do get more information then feel free to PM me.

 

 

It is preferred for advice to remain on forum for the benefit of all forums. Hope this is OK?

[Killerschick]

No problem, I just thought Joy might not want to post specific information, such as the dates involved or details of any judgment, on the forum.

[sequenci]

No problem, I just thought Joy might not want to post specific information, such as the dates involved or details of any judgment, on the forum.

 

That I *do* appreciate. There are some serious limitations experts on this forum so I would quite like them all to know the gist at least

 

Best wishes!

 

Seq.

[newstarter]

The first thing i would go for here is a part18 request for a statement of the acount to verifiy the date the acount went into default that way you could tell straight away if the debt is statute barred.The C.M.L say their members will not chase a shortfall debt for longer than 6 years (and thats capital) mind you i have little faith in them.

[Killerschick]

The first thing i would go for here is a part18 request for a statement of the acount to verifiy the date the acount went into default that way you could tell straight away if the debt is statute barred.The C.M.L say their members will not chase a shortfall debt for longer than 6 years (and thats capital) mind you i have little faith in them.

 

Hi Newstarter,

 

Just to clarify on the CML statement, it's not quite as generous as all that. The statement was issued in 2000 when borrowers who had been repossessed in the early 90's started being contact by lenders or indemnity insurers for the first time. This caused much negative publicity for the mortgage industry which the CML was trying to address. The actual voluntary agreement which was made was that borrowers who had not been contacted at all for 6 years or more would not now be pursued. If a borrower had been contacted within the 6 years following possession then the mortgage company or insurer would retain its right to pursue the borrower for the full 12 years to which it was legally entitled.

 

It should be noted that this 'contact' did not require acknowledgement as you would to start time afresh in relation to statutory limitation periods, further detail is given in the CML statement as to what constitutes contact under their rules. The CML statement has now been enshrined in the FSA's MCOB rules but these only relate to FSA regulated mortgages (post 31.10.04). Even if a lender was to fail to comply with the CML statement there's probably little that could be done, it's not a legally binding agreement and I would have little faith in a complaint to the CML as it has the industry's interests at heart.

 

In relation to a possible part 18 request, that would only be relevant if proceedings have been issued and that is not clear as yet. Hopefully the information will be forthcoming in response to the SAR and it won't be necessary to pursue the legal route.

CML Statement on Arrears & Possessions.pdf

[newstarter]

Killerschick your fast becoming my personal tutor (lol) thanks for that information,on your final point i agree with you and hope the op wont have to go down the legal route.

[Killerschick]

Glad to be able to do something useful with what I picked up in my mis-spent youth in the mortgage business!

[Joy Chapman]

Thank you all greatly for your much needed advice. We are still awaiting the documentation from West Brom. We were definately not contacted within the 6 years and certainly did not authorise a charge to be placed on our new property. We have never admitted the debt. West Brom obtained an independant valuation of our property without our knowledge. They sent a copy of this to us with a letter stating that they had put a charge on the property and a form which stated that unless we admitted the debt and started immidiate payments, they would force the sale of the house. Although we began making a montly payment, as we were so terrified of finding ourself homeless again (at this time our children were still of school age) we did not tick the box to say that we admitted the debt. This continues to be a harrowing and intimadatory experience, your interest and advice is greatly appreciated and gives us some hope.

 

Joy.

[Killerschick]

Hi Joy,

 

You have my every sympathy, it sounds as though you have had a horrible time of it. West Brom give building societies a bad name when it comes to shortfall collections.

 

It sounds as though at some point West Brom must have got a judgment as they couldn't get a charge on your property without either your authority or a court order, and to get a charging order they would first need a county court judgment. Perhaps if you were unaware of any legal action they got the judgment at a previous address? It may be worth getting a credit reference agency report to see if there is one, you can get one free by signing up to the trial period for credit expert and the like but make sure you cancel before you have to start paying for it. Alternatively you can write to Experian, Call Credit or Equifax with a fee and your previous addresses, their websites give more details. If they have brought legal proceedings without your knowledge then that can be grounds for having any judgment obtained set aside, although you also need a valid defence.

 

Look forward to hearing from you when you get more info.

 

KC

[Joy Chapman]

Hello All,

I wrote to the West Brom requesting all of the documents relating to the case via a Subject Access Request but was only provided with a minimal amount of information. I have contacted them again to request ALL of the information held on the file and am still awaiting this.

I appreciate that without all of the information you will not be able to come to a full conclusion but would be very grateful for some guidance on whether their actions have been legal. Therefore, I am providing you with a list of dates and events leading up to the repossession and subsequently in the hope that you will be able to advise me.

25/11/88 Mortgage for £60,000.00

31/12/91 Judgment for Plaintiff - house to be vacated by 28/01/92

27/11/92 House Repossessed

05/04/93 House sold for £72,00.00

1996 New property purchased via an interest only mortgage

19/04/01 Claim to the court by West Brom for the sale of new property to cover alleged interest on shortfall.

2001 was the first time that West Brom had contacted us in relation to any outstanding debt – although they have said that they wrote to us in 1997 but they are unable to provide me with anything to substantiate this claim – we did not receive any communication. As the property had sold for £12,00.00 more than the original sum borrowed, we had assumed that the debt had been paid in full and just walked away from the property devastated by the loss. However, following my SAR to West Brom they have provided us with a list of figures – previously unseen, that they feel justifies the ludicrous sum of money they are pursuing us for.

Original Loan Advanced £60,000.00

Arrears Fees £26,264.72

Insurance £3,006.22

Administration Fees £1,056.20

Solicitors Litigation Costs £3,166.31

Solicitors Sale Costs £779.75

Agents Commission and Management Fees £2,260.63

Valuation Fees £264.38

Locksmiths/Drain Water £447.01

 

TOTAL ALLEGED OWED: £97,245.22

 

Repayments Made £13,716.98

Sale Precedes £72,106.40

 

TOTAL MONIES PAID: £85,813.82

 

DIFFERENCE: - £11,431.40

PLUS:

Interest Charged £56,392.08 ????

 

We contacted our MP in 2003 relating to this matter and only stopped the forced sale of our new property by arranging to pay £200 per month although at NO TIME have we admitted to owing the ‘debt’ and have always disputed it. Due to our diminished circumstances, the sum has recently been reduced to £100 per month.

The basic facts are that, 19 years later, the West Brom are currently chasing us for a figure in excess of £165,00.00 (the WB have not been able to provide me with an exact figure) and as far as I can see are charging interest at approximately £15 per day. This on an alleged ‘shortfall’ of £11,431.40?

There is a charging order on our new property in relation to this ‘debt’ which makes it impossible for us to sell which we may need to do in the near future, mainly due to my husband's health condition.

I realise that this is only a very brief synopsis of the situation and can provide you with any further information you feel may be of assistance.

Any advice that you are able to suggest would be hugely appreciated.

[Joy Chapman]

Any advice much appreciated.

[jeffersno1]

Any advice much appreciated.

 

Hi Joe,

 

Im really interested in finding out how you got on, i've just been going through my fathers finances and have found West Brom have done somethng similar although not as extreme

 

Here is my story:

 

Father purchased house for £33,124.00

Repossessed 24th jan 1991

Property sold 18th october 1991 for £40,000

Proceeds of sale was insufficient to repay all costs leaving debt owing £10,422.13

He agreed to make repayments £25 per month 1st payment may 1997

Payments made for 10 years totalling £3,025

Payments were stopped from january 2008

He had an aneurism in september 2008

Claim made by west brom in october 2009 for £7.397.13 + £19,008.08 interest (£4.09) per day from 18th october 1991

He filled out forms dispite being unwell and agreed to pay £160 per month from jan 2010

Paid to date £4640 (29payments @ £160) + £3,025.00 = 7,665.00.

 

He is 69 years of age and struggling to make payments, im disgusted with West Brom, i cant believe this can happen in this day and age!!!

 

Is there anything i can do to get this stopped? Can they charge that much interest dispite him making payment over the years??

 

Any help appreciated

 

Thanks his son