Income and Expenditure formgreenspun.com : LUSENET : Repossession : One Thread |
Firstly,I would be grateful if someone could advise me on the following...I understand by filling in an earnings declaration I may have admitted liability to my mortgage shortfall, I also understand that it may renew the debt for a further 6 years. However,my shortfall debt has almost reached 10 years now,so if I filled in another declaration now would that then supercede the 12 year rule?How long could that continue 6,12,18,24 years?Secondly, has anyone ever raised a petition on mortgage shortfall before? I'm considering raising an e-petition to send to parliament,which could include a proposal to change the law on the limitation rule from 12 years to 5 as I believe it is in Scotland. It could also include people who may be affected by endowment policy mortgage shortfall. Any views?
Mark.
-- M Groms (idgroms@hotmail.com), April 09, 2002
As I understand it, debt is either simple debt with a 6 year period in which the creditor has to start action to recover the debt or specialty debt such as mortgages where the period is 12 years. There seems to be a grey area around when exactly the 'debt' is incurred, with lenders saying that it is when they sell a re-possessed property in the case of mortgage shortfall liability claims, although another view might be that the debt arises out of the original contract default ie. missed mortgage payments. As far as I can tell from regular reading of the postings here, this point has not been tested in the courts.I'm not sure that the 6 / 12 year limitation is relevant once the creditor has started action, since it is a limitation on commencing debt recovery action, not a deadline for recovering debt.
If your shortfall debt is ten years old and you haven't been contacted by your lender or their agents then perhaps they will write it off if they have adopted the Mortgage Lenders Council code of practice limiting MSL claims to six years.
There doesn't seem to be much activity in Parliament for changes to the law on debt recovery. With the current trend in house prices and borrowing based on equity in property, I would not be surprised to see another 90's style crash and negative equity problems, increased repossessions etc.. Most people are too busy checking how much better off they are this week as compared to last to dwell much on the thought that the whole house of cards might come tumbling down.
The events of the Middle East ought to give everyone cause for concern though. If oil supplies are disrupted then the oil price will go through the roof, followed by industrial slow down, redundancies, slackening of demand, interest rate rises, run on the pound etc.
As someone who lost their property as a direct result of 15% interest rates due to what I consider to be criminally incompetent government by the Tories, and is now fighting a MSL claim by the Halifax, I would support the petition idea. I think it should call for a moratorium on MSL claims which date from pre-1997, as well as bringing the 12 year limit down to six or lower.
-- Gordon Bennet (arsenewhinger@hotmail.com), April 10, 2002.
1)As far as I can see from the home-repo pages the lender has 12 years (still under dispute) ,if the mortgage shortfall is a speciality debt, in which to CHASE you and that the clock starts ticking from the date of repossession of the property or the date of sale of the property,whichever is the earliest or possibly from the date of the contract default . Logically,if they can no longer chase you after 12 years they can't recover the debt, and is then in effect a deadline.2)I also note from the home-repo page that the Law Society has recommended a new limitation period of 3 years. Has anyone got any further information on this, as this would obviously be relevant for the e-petition.
3)I am also considering petitioning for a Mortgage Shortfall Disaster Fund (Contributions to be made by the Government),to help people suffering from this and to help people who have had their homes repossessed obtain a new mortgage.Also,to get Mortgage Shortfall Victim's names removed from blacklists,we are not criminals.Who was it who kept interest levels at cripplingly high levels and caused so many repossessions,not to mention the number of people made bankrupt and companies which went to the wall.Who wants to get into debt and lose their home,or business? If this country can send hundreds of millions ,if not thousands of millions, abroad to help people who have lost their homes due to earthquakes,floods etc...then why can't it help its own citizens,people who have been born and bred in this country?Does this country stand for Jusice or not? Over 1 million people have lost their homes, if this isn't a disaster then what is?
Mark.
-- idgroms (idgroms@hotmail.com), April 12, 2002.
1)As far as I can see from the home-repo pages the lender has 12 years (still under dispute) ,if the mortgage shortfall is a speciality debt, in which to CHASE you and that the clock starts ticking from the date of repossession of the property or the date of sale of the property,whichever is the earliest or possibly from the date of the contract default . Logically,if they can no longer chase you after 12 years they can't recover the debt, and is then in effect a deadline.2)I also note from the home-repo page that the Law Society has recommended a new limitation period of 3 years. Has anyone got any further information on this, as this would obviously be relevant for the e-petition?
3)I am also considering petitioning for a Mortgage Shortfall Disaster Fund (Contributions to be made by the Government),to help people suffering from this and to help people who have had their homes repossessed obtain a new mortgage.Also,to get Mortgage Shortfall Victim's names removed from blacklists,we are not criminals.Who was it who kept interest levels at cripplingly high levels and caused so many repossessions,not to mention the number of people made bankrupt and companies which went to the wall.Who wants to get into debt and lose their home,or business? If this country can send hundreds of millions ,if not thousands of millions, abroad to help people who have lost their homes due to earthquakes,floods etc...then why can't it help its own citizens,people who have been born and bred in this country?Does this country/government stand for Justice or not? Over 1 million people have lost their homes, if this isn't a disaster then what is?
Mark.
-- idgroms (idgroms@hotmail.com), April 12, 2002.
It is my understanding too that the lender has 12 years to chase a shortfall debt, and that there is some disagreement whether this period starts from the first mortgage payment default, from the repossession, or from the sale. Lenders might even argue it dates from when they quantify the debt, which might be some days after the sale. My understanding is based on Section 20 of the Limitations Act 1980. I think the confusion is added to by the voluntary CML agreement to not chase shortfall debts if they have made no initial contact within 6 years. This much-feted agreement simply means they'll stop worrying about the tiny number of really awkward cases which they fail to contact within 6 years. It has no effect on the vast majority of us. Call me cynical but I don't think you'll get anywhere with a 'disaster fund'. But an 'amnesty' on debts arising from the recession of the early 90s should be suggested somewhere about now, just at the time when lenders are beginning to get nervous again. As time goes on, the costs of chasing some of these debts must rise to meet the payments they receive -- making them pale into insignificance beside the richer pickings they can expect from the coming round of repossessions, simply because the amounts involved have risen so dramatically. Good luck
-- Melody (mbc109@york.ac.uk), April 13, 2002.
DRAFT OF MORTGAGE SHORTFALL E-PETITION:
HELP MORTGAGE SHORTFALL DISASTER VICTIMS
PETITION
In Britain between 1990 and 1996 over 1 million individuals were subject to mortgage repossession,principally due to the crippling interest rates imposed by the financial experts at the time.Now the Endowment Mortgage Shortfalls loom on the horizon and MS victims continue to suffer. Overseas debt can be cancelled ,and millions of pounds sent abroad to help those who have lost their homes in natural disasters,but ONE MILLION PLUS British citizens who have lost their homes get NOTHING. Or,doesn't this constitute a disaster?
DESIRED OUTCOME
1) That s20 of the 1980 Limitation Act be reduced to 3 years,as has been recommended by the Law Society (not 6 years as planned by the FSA).
2) That an amnesty be declared for debts arising from the 90s housing recession.
3) That Mortgage Shortfall sufferers have their names removed from blacklists. We are victims not villains.
4) That lenders be obliged to disclose (clearly) to borrowers in debt when information ,or part payment, given to the lenders could constitute an acknowledgment of the debt.
5) That a fund be set up to help Mortgage Shortfall victims and to help those who may suffer from Endowment Mortgage Shortfall in the future.
WHO WE NEED TO INFLUENCE
The Government and all Opposition MPs.
LENGTH OF PETITION
Until justice is done.
---------------------------------------
Now, I've found a copy of the Limitation Act 1980, and in it is this... " An action upon a specialty shall not be brought after the expiration of 12 years from the date on which the cause of action accrued" which I also take to mean" they can't chase you after 12 years".
The above can be seen on "www.lawcom.gov.uk/library/lccp151/cp151apa.pdf" - Appendix of the Limitation Act 1980, see item 8.
Incidentally,anyone who has been duped into sending an income and expenditure form or who has made a part payment should definitely read item 32 on the appendix quoted above.
Attn. Melody, Many thanks for your good wishes and your useful recommendation,as you can see I have included it. I was going to put write-off, but I prefer amnesty. I think your right to be cynical as regards the fund proposal,but one lives in hope.
IF ANYONE ELSE HAS A CONTRIBUTION TO MAKE OR CAN SEE ANY ERRORS, NOW IS THE TIME TO TELL ME.THANKS.
Finally, has anyone guessed what Groms means yet?
-- I Groms (idgroms@hotmail.com), April 13, 2002.
Melody,As I said before, I think you're right to be cynical about the MS fund proposal, I am skeptical about it as well, and I want to change it. What do you think of the following:
5) That financial aid direct/indirect be given to MS victims,e.g. greater tax relief given to them on purchase of a new property. I'm also thinking of adding this proposal:
6) That regulation be implemented to make lenders cap monthly mortgage payments when and if interest rates rise to intolerable levels, and have been requested to do so by the borrower.The subsequent arrears being added on to the mortgage and the length of the mortgage extended.
What do you think?
-- I Groms (idgroms@hotmail.com), April 14, 2002.
Whilst I applaud you for your initiative, it would be inequitable to give mortgage shortfall victims greater tax relief on a subsequent purchase, or to assist them financially through legislated means. This is unfair to other mortgagor's who are fortunate enough to have not been repossessed. Remember I am a victim too - so I have no axe to grind for anyone other than us. Perhaps a simple moratorium on arrears once the mortgagee is in possession would be more acceptable. That way, if the lender pulls the usual stunt of leaving the property empty forever and them selling for a song, the repossessee is protected. This would not affect the negotiation process for the reamining shortfall balance, and would ensure that the Lender's act expeditiously once the property has been repossessed.Interest rates cannot be capped in the way you suggest - this would have a knock-on effect on the markets. However, all mortgages could be sold with the proviso that the borrower can choose to lock in at a particular rate for, say five ot ten years. This would be a way of capping the term periodically within the amortization period. It's common practice in North America I hear.
-- Too scared to say (iwasduped@yahoo.com), April 14, 2002.
Many thanks for your reply,points taken. It looks like I will have to scrub the idea of a financial aid/compensation proposal for MS victims. A pity considering that there was an average loss of 14,400 pounds for each homeowner during the 90s recession (Ford & Burrows,1999). However,I think I can still make a claim for compensation for Endowment Mortgage Shortfall victims,don't you? I think your idea for a moratorium on arrears is a good one for future victims. I don't understand why capping interest rates would have a knock-on effect on the markets(but then I never did pass my economics exam),would that be worse than sustained 15/16% interest rates? A proviso that a borrower could choose to lock in at a particular rate sounds good to me too.What do you think of the other proposals in the e-petition draft?
-- M Amos (idgroms@hotmail.com), April 14, 2002.
I've just now seen short term "capped rate mortgages" you describe availabe in the UK,see Panicmortgages.com. What a shame I didn't have one! I don't know whether I like the name though.
-- M Amos (idgroms@hotmail.com), April 14, 2002.