I see a lot of questions being asked or comments being made suggesting a lender has undersold a property in possession or did not sell it while the price was high.(posted 7709 days ago)While I am not defending the argument over "Duty of Care" I would advise the following, there have been many cases citing this argument.
For example:
Mrs x had her property repossessed in Jan 2000, it was valued at £85,000 and her redemption figure was £82,600. The lender, Kensington Mortgages held the property on the market for some 4 months trying to recoup their full figure.
During that time there were 2 offers of £77,500 and £79,950. Kensington believing they could get a bit more deicded to continue marketing the property for a further 3 months. During that time the original offers were withdrawn and the only offers on the table were a maximum of £75,950. They decided to sell at that resulting in a loss of some £7,000. Of course had they sold the property for £79,950 they would have reduced that loss to a negligable couple of thousand.
Mrs x then brought a case to court to argue that Kensington had a duty of care to sell the property at £79,950 and not £75,950.
Unfortunatley the lender is in a win win position all the time. The judge ruled that the lender does not have a duty to sell the property at a particular time or for a particular price if they believe they are acting in the best interests of all parties or as in this case they believe they can get a higher price to cover all thier costs.
Only if it can be proved that the lender is intentionally being obstructive or underhanded can a case such as this be won. And that happens in less than 1% of cases.
Again, I am not defending the system but its the way it is currently.
If a lender decides that they wanted to let your property out in a declining market and obtain an income while the market improves, they can do this also. Even if it means bigger losses at the end.