Mortgage shortfall Debt

[natant24]

Hi all.

Ok so the background is, me and my partner had a mortgage with Birmingham midshires, which ended up being repossessed. We were relieved to get rid of the house anyway as it was a bad area. Anyway, they put the house on the market and sold it for around £44,000. The original mortgage was an interest only mortgage (bad advice by bad financial advisor!!) so the outstanding balance was £64,000 (approx). The sale was at the end of 2013 and I did at the time get in touch with the lender and tell them that the house was under priced and that we had no means to pay any shortfall, and would they consider writing off the debt, obviously, they didnt care, said no, and went ahead with the under priced sale.

At the time, me and my partner had split, but we are now back together and Birmingham Midshires have since started chasing me, not my partner, via Shoosmiths LLP Solicitors for £27501.74. The figure is correct with fees and interest added on etc.

I sent back the income and expenditure form and an offer of payment for £5 a month, which I thought they would turn down, as the debt could quite possibly never be paid off anyway, but they have accepted, under "the strict understanding that the following proof is provided within the next 28 days: Rent, income/benefits and creditors. Failure to provide this further information may result in your repayment arrangement being withdrawn."

I would just like to know if legally, I have to provide this information? I assumed I didnt have to but this letter this morning seems to say otherwise.

Currently, I am on disability benefits and my partner only works part-time to help look after me and the children (aged 4 and 6), so our income is pretty sparse.

I hope this is enough information for someone to help give me advice.

Thanks!!

[PAWS]

Re: Mortgage shortfall Debt

Hello Natant.
I do not know if there is a legal obligation to provide this information but I would be inclined to send it. It is just to back up the info on you Inc. and Exp. Form. At least it will keep them off your back. I am sure someone with more knowledge will be along soon to give you sound advice.

[DebtSanity]

Re: Mortgage shortfall Debt

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[wales01man]

Re: Mortgage shortfall Debt

458 years to pay this back????????????

[FlamingParrot]

Re: Mortgage shortfall Debt

I sent back the income and expenditure form and an offer of payment for £5 a month, which I thought they would turn down, as the debt could quite possibly never be paid off anyway, but they have accepted, under "the strict understanding that the following proof is provided within the next 28 days: Rent, income/benefits and creditors. Failure to provide this further information may result in your repayment arrangement being withdrawn."

I would just like to know if legally, I have to provide this information? I assumed I didnt have to but this letter this morning seems to say otherwise.

Legally only a court has the authority to DEMAND an I&E form, however, it sounds like it will be in your best interests to provide it. If they refused to accept your offer, they could take you to court and obtain a CCJ and the you would be legally obliged to supply I&E information to the court. :juge:

Currently, I am on disability benefits and my partner only works part-time to help look after me and the children (aged 4 and 6), so our income is pretty sparse.

I hope this is enough information for someone to help give me advice.

In view of the above, I don't see any reason not to submit the I&E requested, it can only work in your favour if you can show you're offering all you can afford. Remember your priority payments such as rent, council tax, utilities and any tax debts, maintenance payments or court fines if applicable, should come above unsecured debts like this one. :thumb:

[FlamingParrot]

Re: Mortgage shortfall Debt

Ok so the background is, me and my partner had a mortgage with Birmingham midshires, which ended up being repossessed. We were relieved to get rid of the house anyway as it was a bad area. Anyway, they put the house on the market and sold it for around £44,000. The original mortgage was an interest only mortgage (bad advice by bad financial advisor!!) so the outstanding balance was £64,000 (approx). The sale was at the end of 2013 and I did at the time get in touch with the lender and tell them that the house was under priced and that we had no means to pay any shortfall, and would they consider writing off the debt, obviously, they didnt care, said no, and went ahead with the under priced sale.

Under FCA rules, lenders are obliged to obtain the best price possible for the property, and it sounds like this wasn't the case with this sale. The good news is that you have six years to complain about the lender if they didn't follow the rules, for example, if the house was sold for less than the market value at the time and/or they didn't do enough marketing to sell it for a higher price. As it's not been too long, you should be able to find out what similar properties in the area sold for at the time. It would be better if you'd had a valuation on your own home, did you ever get one?

You should complain to your lender in the first instance, if they fail to respond or their response is unsatisfactory, you can go on to complain to the FOS. :thumb:

I'd say you should get the payment arrangement in place first, before making any complaints. You should also mention your disability when you send the I&E.

[natant24]

Re: Mortgage shortfall Debt

Thanks everyone!!!

I did mention on the i and e form about disability etc so they do know, they just want all kinds of documents as proof now, as I have been on disability for about 2 years now, I dont think I even have an up to date letter from them.

And yes, i do realise how ludicrous 458 years is but thats the decision they made?!? I honestly thought they would say no and try the court route, or bankruptcy or something else.

When I found out the asking price of this house, before sale went ahead, I did complain to them in writing about it being massively underpriced and that I had no way to pay any shortfall back, and the response was that they had 2 valuations from estate agents and they went with the highest price, knowing it would leave a shortfall and that it was a fair price and that they would chase me for it.

We did have a valuation done on the property as we were trying to sell it ourselves, it was approx 18 months before repossession and was for £60k. I do know that at that time house prices were rising too, not falling, something which I did mention in the letter to them, which they never responded to.

I will try to find out other house sale prices in the area and see what I can dig up.

Thanks again everyone.

[natant24]

Re: Mortgage shortfall Debt

OH MY GOD!!!! Just looked up house prices and one that has popped up that got sold 3 months before ours sold for £80k!!!!! On the same street!! Same number of bedrooms, same style, they are all the same as they are all terraced houses.

[wales01man]

Re: Mortgage shortfall Debt

Problem with selling anything including repossessed house is its worth what someone will pay for it not what an agent or anyone thinks its worth.
To obtain a better price it may have to stay on the market for a longer time interest and insurances would add to the debt maybe cancelling out any price rise.

[natant24]

Re: Mortgage shortfall Debt

I know wales01man, we had it on the market for ages and it just wasnt budging, we had 1 viewing and no offers. Im gutted, I hate being in this situation now.

[wales01man]

Re: Mortgage shortfall Debt

Natant 24 Been in the same situation its a fact of life when your down on your luck it gets worse but we came through it

[natant24]

Re: Mortgage shortfall Debt

In view of the above, I don't see any reason not to submit the I&E requested, it can only work in your favour if you can show you're offering all you can afford. Remember your priority payments such as rent, council tax, utilities and any tax debts, maintenance payments or court fines if applicable, should come above unsecured debts like this one. :thumb:

I have sent them an I&E form they just want proof of my benefit and rent etc, to be honest I dont even know if I have the paper work for it all

Sorry tried to do a quote thing from someone elses post and couldnt do it properly lol. The quote in bold Italics is the quote from previous post lol. Sorry again. EDIT: AMETHYST - ( fixed - use [ quote ] text here [ / quote ] without the space - or high light the bit that's a quote and click the speech bubble button in the tool bar.

[DebtSanity]

Re: Mortgage shortfall Debt

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[natant24]

Re: Mortgage shortfall Debt

I completely agree debtsanity, I just have no idea what to do here.

I know bankruptcy is probably my only option here, but I dont have the cash to do that and by the sounds of it, this company wont make me bankrupt either if they are willing to accept £5 a month forever.

[DebtSanity]

Re: Mortgage shortfall Debt

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