Time limits on mortgage shortfalls

[edk83]

Hello...

I had a joint mortgage on a properly that was repossessed a couple of years after I moved out. Pretty standard relationship breakdown that got violent so had little choice. We initially agreed to sell it and put it on the market but she withdrew it shortly after and refused to move.

I moved out around April 2008, mortgage payments stopped mid 2009 after I could no longer pay them and rent. The house was repossessed November 2011 so my ex continued to live there for a further 18 months paying nothing.

The house was sold at action in April 2012 for around 70k, the 105k mortgage and fees left us with a 41k shortfall.

The lender wrote to me in mid 2012 with a 50% settlement offer of 20k which I ignored and have not heard from them since. The debt was showing on my credit record but has now dropped off.

Now I understand the lender has 12 years to recover the 41k, but that's on the capital and not charges or interest.

The mortgage was interest only, does that mean time runs out for the entire shortfall in the next few weeks?

I check my credit report for any sign of ccjs, have moved house since they sent me the offer. I've also read that some lenders agree to only chase mortgage shortfalls for 6 years anyway?

Thanks for reading if you got this far!

[MIKE770]

your lender has 12 years to start any legal action to recover money you owe.


But a lender must inform you within 6 years that they will/will not pursue you for shortfall, see what others say on here to confirm?

[edk83]

Interesting, they haven't said anything, other than the initial offer years ago.

Would the interest only mortgage not make the shortfall all interest rather than capital? Or is it that the payments were interest only and we would still have owed the capital?

thanks

[MIKE770]

n ow it is getting more in depth as to the actual situation:- 1. Not a normal repayment Mortgage?
2. Interest only Mortgage?

[edk83]

Yes it was an interest only mortgage at the time. I can't seem to find any information about the differences online. Only info about making the final payment which we didn't do of course.

[MIKE770]

capital has not been repaid, therefore still out standing, as I see it, have asked for somebody to pop in here who may be better informed on your situation, see what they say.

[pt2537]

Generally limitation period is 6 years for charges and interest, but 12 years for shortfalls under a mortgage which is classed as a specialty for limitation purposes

[edk83]

But does an interest only mortgage make any difference? I'm guessing not then as the main debt is still capital and just wasn't being repaid with the mortgage payments.

Does the lender have any duty to use the money from the auction sale as payment towards the capital first?

Also is there any reasonable defense after 6 years at all? I have successfully defended other debts after 6 years. I'm Interested in this thinking that they could have an obligation to inform me if they intend to pursue or not.

If they do claim I'll attempt to defend it of course.