Marital Repossessiongreenspun.com : LUSENET : Repossession : One Thread
My ex-husband handed back the keys to our flat (which had negative equity) whilst I was away at University and then went and brought a new house with his girlfriend (I had previously been letting the property and making up the shortfall however I could no longer afford to do this once at Uni. and thought he should also take some responsibility as he could afford to)
This was three years ago (and I have heard nothing from the Lender and my credit rating has always been fine). I have just remarried and we need to apply for a mortgage. Has anyone any similar experience - (he could have afforded to either live there or rent the property out as I had been doing) and I am afraid that his actions will prejudice my future.
The lender (TSB) also made us take out a mortgage indemnity policy when we purchased the property in 1988 (at a cost of about #900). We were told at the time that this would cover the shortfall if we defaulted. Does anyone know the benefit of this policy?
-- Alison Brown (firstname.lastname@example.org), November 05, 1998
First things first: don't worry too much about this one - there are people who specialise in challenging lenders over MIG-related shortfall claims - with some success.
The lender would argue that the benefit of the policy to you was that you got a mortgage that you wouldn't otherwise have got. This, of course, was not the benefit you thought you were buying. I don't know how much evidence you have that the TSB said the policy would "protect" you but mis-representation of MIGs and their benefits has been widely reported and you shouldn't have too much trouble convincing a judge of this. There's more to it than that and it is complex but it is largely in your favour.
Because lenders don't like to waste their money, they may well threaten you with court action and claim you were not the beneficiary of the MIG (see the Bradford & Bingley letters in the Repossession section) but they are unlikely to issue a writ if you turn out to know your rights. Bear in mind that lenders generally draw the line at isuing writs not at sending you threatening letters. So expect the threats to continue once they start.
You face three questions: Whether they will pursue you. Whether you will win. Whether you will get another mortgage. TSB's (and Lloyds') mortgages are administered by Cheltenham & Gloucester, which has acquired a poor reputation for mis-selling, for not acknowledging mis-selling and for taking an aggressive stance against customers in difficulty. They may pursue you.
Based on the above, you would probably win though you would need to keep your wits about you.
You should be able to get another mortgage easily. Read our blacklisted section for more on this.
Hope this helps.
-- Lee Kimber (email@example.com), November 07, 1998.