Phil Jenks - The Halifax's Head of Mortgages today made a public statement regarding the Six Year Rule on BBC Radio 4. I made a taped recording of the programme and here is an accurate transcript of the Halifax's definition of when the 6 years starts:

"The six year cut off starts from the time we know that there's actually a loss in the case. So once we've completed the sale of the property, if in fact there is a loss, then the six year clock starts from that date".

I hope that this may be of help to some of the victims of the Halifax who are being pursued beyond this newly defined cut off period.

-- Tony Hayter (Tony@Hayter.com), March 12, 2002

Answers

Excellent...now all we need is for *all* lender's to abide by this code and a few of us might actually get some sleep some time soon. Thanks Tony.

-- Too scared to say (iwasduped@yahoo.com), March 13, 2002.

So anyone being taken to court where the lender and or judge is taking no notice of the CML six year agreement should be made fully aware of this. Or will they all simply change their minds again.

Was any mention made cross referencing this to the case shown in the Sun newspaper where someone was being chased AFTER 6years by the Halifax?

-- Matt (mattyc@ntlworld.com), March 13, 2002.

surely if they undersell properties they are fully aware that there will be a loss when they appoint agents and tell them what price to market the property? and therefore does the six years start from there? I also disagree, the six years does not start from the loss when sold it is when is there is a payment default or when contract is broken ie. posession. This is something i feel the courts will have to decide once and for all.

-- rathernotsay (drl@bsa-exe.net), March 13, 2002.

Well thats us stuffed then! We are being chased by the Halifax for a mortgage shortfall. My husband gave up his flat to the Halifax almost 9 years ago - however we have since found out that they they took over 3 years to sell it!! So here we are now 5 1/2 years on....

Lisa

-- Lisa (lisajh29@hotmail.com), March 13, 2002.

I spoke with an independent solicitor this week, the legal advice line offered by our house insurance cover, he stated that the time limit should start from the time that the first opportunity arose for the lenders to sue , ie the time that the contract was first broken and that payments had been missed, as that is when a contract has been broken!! So those first letters which were written stating your mortgage is in arrears could help to give a date for when action could have been taken for recovery of monies outstanding. By the way, this guy had also written an internal document for his department on Mortgage Indemnity Policy and was experienced with many cases of mortgage shortfall. regards Vijay

-- (CBCEARLY90s@aol.com), March 13, 2002.

The problem is "opportunity to sue" is not defined in Law. I tried this route with my Lender - as the mortgage was "technically" in default over a year before the repossession and obviously longer than that before they sold the property. The contract - the mortgage - is legally broken when you are in default. The default period is defined in your Terms and Conditions - e.g. after two payments are missed the Lender can ask for the full amount to be repaid etc. This is the key - "can" ask...so they, to an extent, determine the default date. No prizes for guessing that they choose the sale date of the property in most cases. Think about it - they can claim they tried to contact you etc etc for two years, sell a run down empty property for a song then come after you when they feel like it. Most people panic when they get that first letter and call them - so then they have you for the next twelve years. Fair and above-board? I think not.

-- Too scared to say (iwasduped@yahoo.com), March 13, 2002.

Thinking a little bit further.........

Looking at the Halifax statement all it actually says to me is that they have sat down and worked out what date to pick based on one criteria. When is the latest time we can start the 6/12 year clock rolling.

If you follow their way you can sit on a property for 20 years, sell it for next to nothing and then chase some poor person for another 6 years.

This is my statement based on discussion with a property lawyer and from much much reading:

The 6/12 year period begins from the date of default on the mortgage contract. That date is, as stated before, one of 2. Either from missed payments as set out in the mortgage agreement or, and almost always the case as the former is uncertain, from the date the property was repossessed.

If the lender does not sell for many years after that that is solely the responsibility of them.

-- Matt (mattyc@ntlworld.com), March 14, 2002.

This one has really got me confused - we are being chased 5 1/2 years after the property was sold on. However, they took over 3 years to sell it and I find it incredibly hard to believe that it was only on the day of sale or an offer was made that they realised they would make a loss as the property was sold for less than a third of what we paid for it. Its a bit of a long story - the Halifax (who are now chasing us) had bought up the properties which were forces married quarters and sold them on. After that, the area went down hill fast and there were major problems with the flats such as the balconies coming loose! Between that and it being at that time in the nineties, the properties were being sold on again for a few thousand pounds. So surley the moment we left they would have realised that they were going to make a loss?

-- lisa (lisajh29@hotmail.com), March 14, 2002.

In my, and my advisors opinions, the 'day they realise they will make a loss' is totally irrelevant. The date the time starts is on default and as that is tricky to get 100% accurate the consensus of opinion is that it is the date of repossession that is taken for the 6/12 years to start.

I repeat that the Halifax made this statement simply to allow themselves extra time to chase people. There is nothing in law to say it is when the realised a loss would be made - that could be the date the offer was accepted, the date contacrs exchanged, date of completion.... the list is endless and therefore cannot be used.

The Halifax and others, IMHO, will take nobody to court using this as they will not win. Judges tend to be logical and take the law as it reads - the date of default is the date the clocks begins. The date of default can NEVER be when 'they realised they would make a loss'.

The end

-- Matt (mattyc@ntlworld.com), March 14, 2002.