£165,000 interest being charged!!

[Joy Chapman]

In 1988 my husband and I re-mortgaged our house for £60,000 with the West Brom Building Society. Due to the recession and my husband being made redundant we were no longer able to keep up repayments and our house was repossessed in 1992. 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 9 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 over £165,000. Although we have denied the debt, we have been forced by bullying tactics 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 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.

11/88 Mortgage for £60,000.00

12/91 Judgment for Plaintiff - house to be vacated

11/92 House Repossessed

04/93 House sold for £72,00.00

1996 New property purchased via an interest only mortgage

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 we did not receive any correspondence. As the property had sold for £12,000.00 more than the original loan advanced and we had already paid £14,000 in repayments, 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.

 

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 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. My husband is entitled to legal aid due to his medical condition.

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

[newstarter]

Right,i have read your post with intrest,your not the first to be crossed by the West Brom and i doubt you will be the last.Ok the defecit after the repo was approx 11.5 k,9 yrs later they pop up from nowhere saying you now owe 112,000 which has risen to approx 165k due to compound intrest.The property sold for 12,000 more than the original loan and you had already paid off 14k previously,reading it like that,something tells me you are being taken for mugs,in short you are being ripped off in a big way.For a start the time limit for claiming intrest is six years according to the statute of limitations regarding mortgages and you can bet they have messed around with the figures to make this situation favourable to them.Whilst i cannot be 100% certain im sure at the worst you should only have been liable for the 11.5k.Your best bet would be stop paying this shortfall for now and put the whole issue into dispute and get some free legal advice,most places will give you a free 30 mins,but my feeling is they were out of time to claim intrest on the shortfall.

[newstarter]

what did you get by way of your s.a.r request?

[Lea_HTH]

Statute of limitations for mortgages is 12 years.

 

You don't need to 'accept' the debt - you're paying it and they clearly have a charging order, which means they have gone to court to obtain that. You should have challenged it at the time.

 

Not a whole lot that you can do now, but if your husband has mental health difficulties (under a consultant), then the likelihood of you having your home repossessed to pay this charging order is very slim - his capacity would need to be assessed. In addition, if your income is low, do an income and expenditure sheet and offer them a lower amount as a monthly payment.

 

It doesn't sound quite right that you borrowed 60k, property sold for 72k three years later, and you had already repaid 14k. The arrears figure must have been sufficiently high in order for them to obtain possession in the first instance - then they would have added on substantial fees for various things, managing the property, getting it ready for sale, shutters, legal costs and so on, which could easily have raised the amount they claimed you owed at the point of sale - and the time since could easily have raised the level to the figure you now state.

 

Frankly, if you are thinking of challenging this, you will need the assistance of a solicitor.

[newstarter]

statute of limitations,the capital element,ie the 11.5k,yes the lender does indeed have 12 years from the default to claim the shortfall,but once again this is just the capital element.The unsecured element,ie the intrest on the capital amount is limited to six years,this is part of the limitations act!,The above post is typical,no chance,no way out,nothing you can do,attitude of a professional who,s never been short of a bob or two in their life,has never faced the worry of loosing the roof over their head,and yet sleepwalk through clients cases with an air of cold, distant professionalism which quiet frankly leaves me both amazed and astonished.I had to put up with this attitude when i was in a mess,up to my neck in debt with an eviction order hanging over my head,if i had listened to the utter claptrap being spouted by the brief i was going to instruct,we would all be in bed and breakfast accomodation now,having strip washes and daily trips to the laundrette .

 

Now,to the thread at hand,if i were in your shoes i would stop paying any payments for now and put this into dispute,in short your being screwed for an awful lot of money,yes your already paying this debt,but your paying because you have been pressured into paying it through bullyboy tactics by the lender,in other words under duress,i would bet my bottom dollar they are only entitled at most to the 11.5 k and thats worst case scenario,remember you were contacted after 9 years by B.M and told you owe 112k,you have to ask yourself how this figure was arrived at,ok you have figures on paper sent to you through the S.A.R but you need to dig deeper,i know i would,there must be charges galore which you can challenge,they would be getting nowt from me untill i had done my research and questioned everything in detail.

[Lea_HTH]

statute of limitations,the capital element,ie the 11.5k,yes the lender does indeed have 12 years from the default to claim the shortfall,but once again this is just the capital element.The unsecured element,ie the intrest on the capital amount is limited to six years,this is part of the limitations act!,

 

The above is the reason why lay people should not attempt to give legal advice. It is manifestly wrong and misleading to make the statements you have made. The OP clearly stated she had been making payments towards these arrears AND that there was a charging order for the amount - so the issue of limitation simply doesn't apply, and if it did, the period would 12 years after the last payment was received. You have subsequently misunderstood the issue of capital sums and interest - there are subsections to be read in conjunction with the first statement, which define the circumstances under which that particular element of limitation applies to 'interest'.

 

 

The above post is typical,no chance,no way out,nothing you can do,attitude of a professional who,s never been short of a bob or two in their life,has never faced the worry of loosing the roof over their head,and yet sleepwalk through clients cases with an air of cold, distant professionalism which quiet frankly leaves me both amazed and astonished.

 

Sometimes people talk a load of tosh online, and sometimes people who don't know any better take it all on board and think they stand a fighting chance when in actual fact all they will do is throw good money after bad. You are misleading the OP with your incorrect interpretation of the law. Plus, you know absolutely nothing about me, yet feel somehow you can make assumptions which you then throw out as fact. It just makes you sound even sillier than you did with the incorrect interpretation of the law - and that was silly enough.

 

 

I had to put up with this attitude when i was in a mess,up to my neck in debt with an eviction order hanging over my head,if i had listened to the utter claptrap being spouted by the brief i was going to instruct,we would all be in bed and breakfast accomodation now,having strip washes and daily trips to the laundrette .

 

Because all lawyers, despite tending to be excellent scholars, who study for generally a minimum of six years, learning the law, doing all kinds of pro bono and working their way up from the bottom of their profession are just going to spout 'claptrap'. Uh huh, that's why people need lawyers, because someone on the internet can very easily misread a statute, ignore all the case law following on from it interpreting such acts and give advice, anonymously, with no come back. Yup. That's why we need lawyers.

 

Now,to the thread at hand,if i were in your shoes i would stop paying any payments for now and put this into dispute,in short your being screwed for an awful lot of money,yes your already paying this debt,but your paying because you have been pressured into paying it through bullyboy tactics by the lender,in other words under duress,i would bet my bottom dollar they are only entitled at most to the 11.5 k and thats worst case scenario,remember you were contacted after 9 years by B.M and told you owe 112k,you have to ask yourself how this figure was arrived at,ok you have figures on paper sent to you through the S.A.R but you need to dig deeper,i know i would,there must be charges galore which you can challenge,they would be getting nowt from me untill i had done my research and questioned everything in detail.

 

To the OP, I strongly suggest that you take all your paperwork and seek the advice of a solicitor with whom you can sit down and discuss the issue. They will be able to look through the paperwork and give you a clear indication of whether or not there has been any kind of legal misguidance which would allow you to challenge what has occurred up to this point.

 

I would strongly recommend that you take any other advice other than 'see a solicitor' with a large and hefty pinch of salt, largely because people get over emotional about dispassionate advice (see above), and think that everything can be a legal case. It can't, and sometimes people's actions (paying money for a debt they claim they do not owe) leads them into a situation whereby it would be virtually impossible for a judge to determine in their favour - the balance of probabilities would show that making the payments was an acceptance of a debt. The only thing to fight over would be 'how much'.

[Lea_HTH]

To newstarter: kindly do not derail the OP's thread any further, you will get no further reply from me as I am here to assist those in difficulties with accurate legal guidance.

[newstarter]

whilst i have no wish to enter into some spat with a so called professional i dissagree totally with the points you have outlined and my last word on this would be to the O.P,question everything the West Brom are doing,there is no substitute when it comes to advice as that from those who have been in your position and got themselves out of it,without the aid of letters at £25 a pop to tell you the downright obvious.

[Lea_HTH]

whilst i have no wish to enter into some spat with a so called professional

 

The above highlighted bit is where you end up looking silly. You are free to disagree all you like (even though you are wrong), do so politely - it is one of the things I like about my profession so much - we go into court, we dispute everything our opponent has to say, but we always do so whilst remaining polite.

 

I trust the OP, being of a senior generation, will take the appropriate advice on this thread.

[newstarter]

on that point i will politely disagree.

[totiesquoties]

hi joy,

ring nationaldebtline regarding this, they are excellent, and free, and do not judge anyone, their website is www.nationaldebtline.co.uk

if a charging order was first obtained on the first property interest is stopped immediately, national debtline will tell you this, so what this compound interest is does not make sense, ring national debtline and explain everything to them, and see their website, hope this helps totiesquoties.

[Joy Chapman]

Thank you all for your comments. I have spoken to the CLA who are looking into the matter but this is only via written and phone contact. As we are eligible for Legal Aid, are we able to contact an independant solicitor or must we continue to deal with the CLA?

 

Joy.

[Lea_HTH]

Thank you all for your comments. I have spoken to the CLA who are looking into the matter but this is only via written and phone contact. As we are eligible for Legal Aid, are we able to contact an independant solicitor or must we continue to deal with the CLA?

 

Joy.

 

You can go and see a solicitor of your choice - they will make an application for legal aid (they will not be able to do so if someone has already made an application for legal aid on your behalf - the application would have to be transferred and needs the agreement of the original applicant) - it is not definite that legal aid will be granted, one has to have a realistic prospect of success as well as a low income.

[Joy Chapman]

Thank you. In addition, we have been thinking of joining IBAS - do you know if they are reputable?

[Lea_HTH]

I presume you are talking about the Independent Banking Advisory Service? IBAS is an acronym for quite a few services.

 

I have no view on them one way or another.

 

Best advice: see a solicitor; don't pay any money up front to anyone; find out what the fees are likely to be and what your prospects of success are, and then make a decision based on the advice of someone who has had the opportunity to review all of the paperwork and evidence available. Only by reviewing everything, including previous court hearings, will someone be able to ascertain if there is a possible claim available to you.