Halifax Arrangement Negotiation

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Hi everyone, I posted previously a few weeks ago ('Halifax Voluntary Repossession'), and I've just received a letter from the Halifax today saying that they anticipate that when the property is sold, there will be a shortfall of 19,359.66. (The original mortgage was for 25.5K).

They are basically saying that if I play ball and go for a payment plan, I can pay it off in 10 years and they won't take further action. They've also asked me to fill in a financial analysis of my monthly income.

I would be very happy to pay a final settlement of 3500 max (my family have already agreed to lend me the money), but I've read on this site that I should ignore their letters until the court order comes through - then aim for a settlement. Is this right?

I would rather get things over with now if I can, but don't want to agree to a payment plan because of the horror stories I've heard about them when you cannot meet the payments for any reason.

Sorry to waffle. If anybody can help or give a bit of support I would be very grateful.

Thanks,

Mel

-- Mel Trudgett (melanie.trudgett@ntlworld.com), May 14, 2003

Answers

Mel,

No, I don't think that's right. Where does it say on the site exactly that you should ignore their letters until the court order comes through - then aim for a settlement ? I think you should put the lender to strict proof (as advocated on the site), to make sure they have done everything correctly and can justify all expenses incurred. You may also find something which could help you negotiate a better deal. I don't know anything about your personal cicumstances, but if you have few assets and low income it might be worth considering insolvency. The law is due to change next year under the Enterprise Bill and it will be a lot easier to go bankrupt, even now there are transitional arrangements and discharge will be substantially quicker. If you are prepared to do this you could make an offer of say 390 pounds to the building society (cost of declaring insolvency now) as a full and final settlement. A number of people have settled this way. Even if you are a home owner again it's not impossible to do this.

Mark.

-- (idgroms@hotmail.com), May 15, 2003.


Hi Mark, Thanks for your response. I must have misunderstood the information and the do's and don't section.

In light of what you have said, exactly how would I respond to this letter from the lender - without this being an admission of my guilt of the 'debt'? I would be happy to offer a settlement now, but it looks like they want the full GBP19.5K. I only have 14 days to respond, before they take 'further recovery action'. So I'm starting to panic about what I should or shouldn't do right now.

Thanks for your advice about bankruptcy. I will look into this option further.

Thanks,

Mel

-- Mel Trudgett (melanie.trudgett@ntlworld.com), May 15, 2003.


Mel,

The first thing you should do is write back to the lender stating that you have received their letter and you do not understand how they can *anticipate* the shortfall when the property has not even been sold yet. (If your original mortgage was 25K and they are anticipating a shortfall of 19K, my maths says that with a guess at possible interest and costs, they are selling your property for about 10K?, does this sound reasonable? - you know the area and current property prices).

You should also state that due to the seriousness of the matter in terms of how it could affect the rest of your life, you do not appreciate being given time limits to respond as you are seeking advice and will contact them again when you are in a position to reply after considering *all* the facts.

Do it today, and that will take some of the pressure off.

Tracey

-- One Angry Mother (madcow678@hotmail.com), May 16, 2003.


Mel,

This sounds very peculiar to me. Firstly, you should not make any offer of settlement until the property has been sold and any shortfall proven (if that is what you decide on). Don't send them any income & expenditure details at this stage. Perhaps the lender has reached a verbal agreement on a possible sale price, but it all sounds highly irregular to me. I believe the Halifax are members of the CML (Council of Mortgage Lenders) but you need to check. You can check whether a lender subscribes to the Mortgage Code by phoning The Mortgage Code Compliance Board on 01785 218200. If they are members, and I would be very surprised if a big lender like this isn't, I would explain what is happening to the Mortgage Code Compliance Board, as it appears to me Halifax are in breach of the Mortgage Code. How, for example can they threaten you with "taking further recovery action" when they still don't know what there is to recover, & give you 14 days to reply? How can they expect you to agree a settlement or repayment program on a hypothetical amount? Is this their fair and sympathetic treatment ? See the CML web page Debt Following Mortgage Possession on: http://www.cml.org.uk/servlet/dycon/zt- cml/cml/live/en/cml/pub_info_dept

Also "Handling of Arrears and Possessions" http://www.cml.org.uk/servlet/dycon/zt- cml/cml/live/en/cml/pub_info_arrears

If the situation is as you say I think you have grounds for a complaint. The Office of Fair Trading might be worth ringing too. I would contact the Compliance Board first and also take professional advice on this before replying. I'll see if I can also get a legal opinion for you too. To avoid acknowledging the alleged debt just make sure you state that you deny liablity and dispute the claim, more than reasonable at the moment as they haven't even sold the property!!!! I would also include the words "Without prejudice" in any communications. I would be very interested to hear how you get on. Good Luck.

Mark

-- M Amos (idgroms@hotmail.com), May 16, 2003.


Mel

I would go along with Mark's advice.

Have you SARN'd them yet...even though the property is not sold the SARN info might be helpful at this stage possibly.

Personally I would keep my letters polite but to the point...there is no point in getting "stroppy" with them.

Don't let on that you have family willing to help....they would have you sell your granny to get their money.

Don't panic....there is very little they can do to you at this stage and most of us have lots of letters threatening court action within 14 days...don't be intimidated by them.

Good luck and let us know how you get on!

all the best

M

-- hanging in there! (Anderston828@aol.com), May 16, 2003.



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