Mortgage shortfall Debt

[natant24]

Re: Mortgage shortfall Debt

I know it is no solution, its the only thing i could think of to do when they sent me the forms. I had already asked them to write off the debt but they refused so now i am here. I hate that i got in this position its horrific!

Thanks everyone!!

[FlamingParrot]

Re: Mortgage shortfall Debt

I'm going to throw the cat among the pigeons somewhat now...

These, what I call informal payment arrangements with creditors, are all well and good for relieving yourself from a bit of creditor pressure but what's the exit route out of it? As someone above said you will be paying it back fro ever and a day. Are you happy with that?

Such payment arrangements work best when they are temporary. So for example where someone has gone on sick leave and they're only getting sick pay until they're better, a temporary reduced payment arrangement keeps things ship-shape until full income is restored at which point normal repayments can continue for the repayment term.

That's not where you are at though is it? You are living by and large on benefits it seems and so you are left with, what seems to me, an unsatisfactory state of affairs where you will be making payments from benefit income for the rest of your life.

So, you are now about to ask me, "what's the solution then?"

I will let you digest this post first before getting to that. Perhaps you won't agree with my rationale anyway- let's see.

I'd say £5 a month is something you can probably live with for the rest of your life if need be. Frankly I don't see that being a problem, if the creditor agrees to it and the OP is able to demonstrate that's all they can afford due to long-term illness or disability, what's wrong with that?

Bankruptcy does have a number of undesirable consequences that can affect many aspects of your life, not just your credit rating. For that reason it should only ever be considered as a last resort. I fail to see what the advantage would be in this case. Personally I think it's very good news that the creditor in this case has agreed to the £5 repayment and I'd be very much inclined not to upset that applecart one bit! :thumb:

[FlamingParrot]

Re: Mortgage shortfall Debt

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

Have you got a bank account? How do you pay your rent and how are your benefits paid to you? You should be able to produce bank statements showing all that if you are using a bank account.

[FlamingParrot]

Re: Mortgage shortfall Debt

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.

It sounds like you have a very good argument to complain to the Ombudsman (FOS) in view of the above. :clap2: You have already complained to your lender and they failed in their obligation to obtain the best price for your property. If you get a ruling in your favour, you may well find yourself having to pay a lot less than what they say the shortfall is, it's always worth going for it even if it takes time. Even better is the fact that, since you already went through the process of complaining to the lender, you can go straight to the FOS now and avoid upsetting them now they've accepted your £5/month offer. :grin:

FOS complaints take time but you can just keep paying your agreed amount while this gets sorted out. :thumb: :thumb:

[stevemLS]

Re: Mortgage shortfall Debt

Not sure I agree that there is merit in complaining about the price they sold it.

OP says themselves in post #10 that they marketed it "for ages" but it wouldn't shift. 1 viewing and no offers.

If it was sold at auction, and marketed, that is probably sufficient proof to show that they got the best price possible.

[FlamingParrot]

Re: Mortgage shortfall Debt

Not sure I agree that there is merit in complaining about the price they sold it.

OP says themselves in post #10 that they marketed it "for ages" but it wouldn't shift. 1 viewing and no offers.

If it was sold at auction, and marketed, that is probably sufficient proof to show that they got the best price possible.

It can't hurt, can it? It costs nothing and the OP has nothing to lose.

It is the lender who has a duty to market the property in order to get the best possible price, not the borrower.

[natant24]

Re: Mortgage shortfall Debt

Thanks again everyone!
I think I will try and go the FOS route.
I have been in touch with the estate agent that marketed the property for us and they have emailed me their valuation that they did and it was actually marketed at £69,950. They emailed me the details so I can forward that to the FOS too. Ive found the proof I need so I will forward that to them, keep them off my back and stick to the payment plan.
And the property was not sold at auction, it was marketed at an estate agents and advertised on rightmove, thats how I found out how much it was marketed for, and was able to send them a letter advising them of the low price. The house got repossessed on September 6th, and the sale went through on 31st October, so only 2 months. So seeing as house sales take 6 weeks to go through looks like someone snapped their hand off getting a cheap deal, as anyone would!!
It wont cost me anything to complain, if I get nowhere, c'est la vie.
I really dont want to go down the bankruptcy route obviously. They said they will review this payment plan in 12 months, so I will give it that and see how we go.

And again, I know I am repeating myself but thank you all so much for all the advice.

[FlamingParrot]

Re: Mortgage shortfall Debt

IMHO you are making all the right decisions above. :clap2: :clap2: :clap2:

Payment arrangements are usually subject to review but if your circumstances don't change, they have no reason to change the arrangement. You can't offer what you haven't got, simples! :grin:

It certainly is worth complaining due to the rather low price achieved for the property, around a third off the price it should have achieved. Sounds like you have the necessary evidence of their negligence in this respect. :thumb:

[DebtSanity]

Re: Mortgage shortfall Debt

Deleted post.

[stevemLS]

Re: Mortgage shortfall Debt

It can't hurt, can it? It costs nothing and the OP has nothing to lose.

It is the lender who has a duty to market the property in order to get the best possible price, not the borrower.

Agree it does no harm, was trying to manage expectation.

And indeed appreciate that the mortgagee in possession has to get the best possible price, the point that I was making was that OP had him/herself been marketing the property prior to repo with little interest.