Help Please With Mortgage Shortfall Letter

[Malibu]

Hello, I'm new to the website and I would really appreciate it if anyone had any good legal advice as to how to tackle mortgage shortfalls.

Basically mine and my husband's property was repossessed last year and we've had no communication from our lender Santander since but we have recently received a letter from Enact explaining the shortfall and that they intend to recover money from us. We accept that we may owe money but we are reluctant to respond with an offer of payment just yet as Enact's letter seems rather vague i.e. it just says we owe £9,830.50 without giving us a breakdown of charges and the sale price and if the property was sold by an estate agent or in an auction. Also, they've asked us to offer a payment amount but we have no idea what to offer so do we need to seek legal advice and can you give any suggestions who to go to (we've used CAB in the past but we've never found them very helpful)? Our current background is that we're receiving housing benefit, I'm unemployed and 6 months pregnant (and we already have a 3 year old), my husband works full time but is on a low wage so we haven't got savings and we don't have much left after bills each month to afford to pay much to settle the debt.

[nemesis45]

Re: Help Please With Mortgage Shortfall Letter

Hi welcome to LB,
Given your current financial status there is little that is available to make any payment at all.
Have you been asked for an Income and Expenditure statement?

You should also demand a full breakdown as to how the short fall figure has been arrived at.

Please be assured no court will make you pay an amount per month that is unreasonable or
unaffordable. This could even be £1 per month.
As far as I can see from what you have said there is little or no chance in your being able to make any payment
in the foreseeable future.

As well as a financial statement a letter explaining the situation may get Enact of your backs.

nem


nem

[Malibu]

Re: Help Please With Mortgage Shortfall Letter

Thanks for the advice nemesis45

Yes they have included a financial statement for us to complete. Would you suggest that I probe into how the shortfall came about before completing and submitting the financial statement? Also, if they cannot legally force us to pay given our current financial position, are they likely to contact us in the future for payment?

[nemesis45]

Re: Help Please With Mortgage Shortfall Letter

Thanks for the advice nemesis45

Yes they have included a financial statement for us to complete. Would you suggest that I probe into how the shortfall came about before completing and submitting the financial statement? Also, if they cannot legally force us to pay given our current financial position, are they likely to contact us in the future for payment?

Hi the situation is that a mortgage shortfall has a limitation period of 12 years allowing it to be pursued, however the Council of Mortgage Lenders has sais that its members will not pursue after 6 years have elapsed.

It's not really a question of " forcing " you to pay it is in your case impractical to do so, whatever action they may take it is highly unlikely to achieve the result they seek.

Yes an explanation of how the shortfall figure has been arrived at is essential and should be sought as soon as possible.

Your I & E statement must be carefully put together make certain that every outgoings however small are listed and benefits and earnings are clearly stated.

You may be asked from time to time if your finances have improved.

nem

[FlamingParrot]

Re: Help Please With Mortgage Shortfall Letter

Hello, I'm new to the website and I would really appreciate it if anyone had any good legal advice as to how to tackle mortgage shortfalls.

Basically mine and my husband's property was repossessed last year and we've had no communication from our lender Santander since but we have recently received a letter from Enact explaining the shortfall and that they intend to recover money from us. We accept that we may owe money but we are reluctant to respond with an offer of payment just yet as Enact's letter seems rather vague i.e. it just says we owe £9,830.50 without giving us a breakdown of charges and the sale price and if the property was sold by an estate agent or in an auction. Also, they've asked us to offer a payment amount but we have no idea what to offer so do we need to seek legal advice and can you give any suggestions who to go to (we've used CAB in the past but we've never found them very helpful)? Our current background is that we're receiving housing benefit, I'm unemployed and 6 months pregnant (and we already have a 3 year old), my husband works full time but is on a low wage so we haven't got savings and we don't have much left after bills each month to afford to pay much to settle the debt.

Yes they have included a financial statement for us to complete. Would you suggest that I probe into how the shortfall came about before completing and submitting the financial statement? Also, if they cannot legally force us to pay given our current financial position, are they likely to contact us in the future for payment?

Absolutely! This should be your first step! :thumb: Before making any offers of repayment, you should write to Santander requesting a breakdown and full details regarding the following:

• the sale price
• who bought the property
• date when the property was sold
• how it was marketed and sold, i.e. at auction or through estate agents
• valuations they obtained before selling
• any maintenance costs until the property was sold
• breakdown of the costs involved in selling the property such as estate agents' and solicitors' fees
• whether you had mortgage indemnity insurance and if so, details of the claim they made to the insuerers
• interest calculations

Depending on the answers to the above, you may be able to dispute the amount owed under the alleged shortfall, for example if the house was sold below its market value and/or it wasn't actively marketed to obtain the best price or if they have added on costs and fees that are unreasonable or it was sold to an associated company.

The FCA MCOB handbook states that a lender must obtain the best price that could reasonably be paid for the property at the time it's sold: https://fshandbook.info/FS/html/FCA/MCOB/13/6

If they don't co-operate or their answers are not satisfactory, you may be able to complain to them and then take it up to the FOS if necessary.

You don't want to be paying a sum of money just because they ask you to, without knowing how they arrived at that figure. :scared:

[Malibu]

Re: Help Please With Mortgage Shortfall Letter

Thanks for all of the advice, its very much appreciated! I've received a statement of accounts from my old mortgage lender and I'm just writing out my response now, basically asking for answers which I haven't received (how the property was sold, what valuations were made before sale, who bought the property and how the interest has been calculated). I'm also asking them why they didn't let-out the property on a short-term basis as a means to recoup some of the charges as the property was vacant for a year. The sale price seems lower than what they could've got for it (£165,000) - zoopla.co.uk estimates a potential sale price of £244,091 but I don't know how reliable Zoopla's figures are.

This might be a dumb question but I'm going to ask it anyway - Do I have to pay litigation fees even though I was (and still am) exempt from court fees? I'm being asked to pay £1099 in litigation fees.

[FlamingParrot]

Re: Help Please With Mortgage Shortfall Letter

Thanks for all of the advice, its very much appreciated! I've received a statement of accounts from my old mortgage lender and I'm just writing out my response now, basically asking for answers which I haven't received (how the property was sold, what valuations were made before sale, who bought the property and how the interest has been calculated). I'm also asking them why they didn't let-out the property on a short-term basis as a means to recoup some of the charges as the property was vacant for a year. The sale price seems lower than what they could've got for it (£165,000) - zoopla.co.uk estimates a potential sale price of £244,091 but I don't know how reliable Zoopla's figures are.

Zoopla's figures are based on mathematical formulae taking into account things like the previous sale price of the property and the estimated price variation in your postcode for properties of that type since the last time it was sold. It doesn't take into account the condition of the property or anything that could increase or decrease its price outside the formulae, for example, if you'd installed a brand new designer kitchen and bathroom and built a lovely conservatory in the back or if it got flooded and there was general damage and you let it go to the dogs. Zoopla wouldn't know that or whether the property has 'kerbside appeal' or if they've just opened a curry house next door, if you see what I mean.

However, it would be interesting to see what valuations they obtained at the time from actual agents.

This might be a dumb question but I'm going to ask it anyway - Do I have to pay litigation fees even though I was (and still am) exempt from court fees? I'm being asked to pay £1099 in litigation fees.

Who is asking you to pay those? Are they part of the alleged outstanding amount?

When you say you are exempt from court fees, are you referring to having been eligible for fee remission? I suspect the litigation fees in question may refer to fees incurred by THEM during the repossession process.

[Kafka]

Re: Help Please With Mortgage Shortfall Letter

Sorry I haven't seen this thread before, but I went through something similar over the last few years, so I understand your issues.

Firstly, FP is surely right that they are charging you for their litigation fees incurred. The fee exemption would only apply to you if you were bringing the action, so sadly you are stuck with them.

One other point I didn't see covered in the list of details you want from them. There will be various charges added on for a defaulted account, often for late payment, non-DD payment, admin fees and so on. Many of these are unlawful and can be reclaimed to offset the amount really owed. You need full details of all charges applied to the account, as these weren't specified in the list above. You could find they make a large sum that can be challenged.

[Malibu]

Re: Help Please With Mortgage Shortfall Letter

Who is asking you to pay those? Are they part of the alleged outstanding amount?

When you say you are exempt from court fees, are you referring to having been eligible for fee remission? I suspect the litigation fees in question may refer to fees incurred by THEM during the repossession process.

According to the statement of accounts I received, they are saying that I am liable to pay their litigation fees and yes this is part of the debt amount they say I owe. Are they legally allowed to pass these fees onto me or is that for a judge to decide?

I received a full fee remission when I went to court over the repossession. I'm not sure if that makes any difference to being liable to pay their litigation fees - probably not.

[Malibu]

Re: Help Please With Mortgage Shortfall Letter

There will be various charges added on for a defaulted account, often for late payment, non-DD payment, admin fees and so on. Many of these are unlawful and can be reclaimed to offset the amount really owed.

I was actually reading up about this today and yes default and administration charges were being added to my account but looking at the statement of accounts I have received, they haven't mentioned these charges. I'm assuming they've included these in the interest amount so I will be asking them to provide a detailed account of all these charges.

[FlamingParrot]

Re: Help Please With Mortgage Shortfall Letter

According to the statement of accounts I received, they are saying that I am liable to pay their litigation fees and yes this is part of the debt amount they say I owe. Are they legally allowed to pass these fees onto me or is that for a judge to decide?

I received a full fee remission when I went to court over the repossession. I'm not sure if that makes any difference to being liable to pay their litigation fees - probably not.

It is up to the court to decide whether one side should pay the other side's legal costs. Fee remission only applies to court fees incurred by yourself, not by the other side, nor does it apply to other legal costs such as solicitors' fees.

[Kafka]

Re: Help Please With Mortgage Shortfall Letter

I was actually reading up about this today and yes default and administration charges were being added to my account but looking at the statement of accounts I have received, they haven't mentioned these charges. I'm assuming they've included these in the interest amount so I will be asking them to provide a detailed account of all these charges.

Good egg :thumb:

[Malibu]

Re: Help Please With Mortgage Shortfall Letter

Hello, I need advice again - I hope someone can help and give me some of their time!


Letters have been going back and forth regarding my mortgage shortfall. Some of my questions have been answered and some refused an answer. I haven't yet provided them with my financial statement and an offer due to not receiving full answers to my questions and I guess because they're not providing me with all the answers they haven't been adding interest onto my current debt. I'm wondering if I should continue pursuing answers or if I should just make an offer now. The answers I have been refused are...


- Invoices regarding repairs etc to the property (£2290.68). I have been told I am not entitled to access invoices between their client and their sub-contractors. They won't even give me a full summary of works undertaken. Surely if I'm liable to pay this total charge then I should receive complete information regarding it?


- I have been told I am 'not entitled to information regarding companies employed by (their) client following repossession' therefore they will not let me know which estate agent was used to sell the property.


- They won't tell me who bought the property.


They have also said my mortgage lender does not need an order from the judge to forward their litigation fees onto me.


They received good offers for the property (sold for £165k but had four offers between £170k and £197k). Offers of £170k and £190k were turned down due to higher offers being made approximately a month after. They haven't given me any other reasons why these offers were turned down and in my opinion I think it was unfair of them not to go ahead with lower (yet acceptable) offers based on the fact that I was still being charged monthly mortgage fees and so them accepting a lower amount could've potentially quickened the sale and reduced my mortgage shortfall.


I have only recently been given a full statement including interest/admin fees and I'm still trying to make sense of it all (isn't easy when I'm 37 weeks pregnant lol)


Do you think I should make an offer without a full justification of the shortfall amount, just to get it out of the way? I'm thinking that if I do then offer 20% or even, if I can get away with it, 10% (the shortfall asking amount is £9830.50). We're not in a great financial position but we can afford to pay installments.