Indemnity Policygreenspun.com : LUSENET : Repossession : One Thread
Can you please advise on Indeminity Policies. When we purchased our house back in 1991 we were advised to purchase this policy by the Abbey National, they stated that if our home ever became repossessed then this policy would be enforced and would pay for any shortfalls.
Can you please advise me what the 6 year and 12 year rules are please. I don't quite understand them. Our home was repossessed in 1995. Please help.
-- (email@example.com), November 07, 2003
If this is a MIG (Mortgage Insurance Guarantee) you are talking about then I'm afraid you are another one of the thousands of victims who were mis-sold/mis-represented the insurance cover, but please check with a legal professional. The problem is that the MIG policies actually cover/ed the lenders not the borrowers. Furthermore, if the lender has claimed on the policy the insurance company can chase you for the loss under the rights of subrogation, although usually the lender tries to recuperate the money on behalf of the insurance company.
Firstly, I would recommend you read as many previous postings as you can on the Q&A site and read/follow the "Do's & Dont's on the Home Repo page too. Sarn the lender and put them to strict proof. Be advised lenders read this site.
A lender has 12 years under the Limitation Act 1980 to chase you (see Bristol & West v Bartlett - July, 2002). The 12 years usually runs from the 2nd or 3rd missed mortgage payment, however, you need to check your mortgage terms & conditions to be certain, it could be, for example from the 1st missed mortgage payment. In respect to interest the limitation period is 6 years (see postings on Home repo Q&A for more details). See also the posting ***The 12 Year Limit and Endowment Mortgages*** .
You should check to see whether the CML 6 year voluntary Code (see below) applies in your case.
If the above doesn't help then I think the best course of action is to negotiate a "Without prejudice" settlement. I suspect this will be the best option in your case.
The Council of Mortgage Lenders have a Voluntary 6 year code which states:
"In addition, from 11 February 2000, lenders who are members of the Council of Mortgage Lenders have agreed voluntarily that they will begin all recovery action for the shortfall within the first six years following the SALE of a property in possession. Anyone whose property was taken into possession and sold more than six years ago, and who has not been contacted by their lender about recovering any outstanding debt will not now be asked to pay the shortfall. The Association of British Insurers supports this approach on behalf of the mortgage indemnity insurers.
All lenders which subscribe to the Code have now agreed to adhere to it whether they are a CML member or not. You can check whether a lender subscribes to the Mortgage Code by phoning The Mortgage Code Compliance Board on 01785 218200."
See CML webpage for full explanation: www.cml.org.uk/servlet/dycon/zt- cml/cml/live/en/cml/pub_info_dept
Be careful not to acknowledge the debt by stating on any communications that you do not acknowledge the debt, that you deny liability and that you dispute the debt. If you make an offer to settle make sure you also include "Without prejudice" on the letter and state that you are making the offer on an "ex gratia" basis. If someone acts on your behalf then ensure you ask them (in writing) not to acknowledge the debt on your behalf (and keep a copy of the letter). Telephone calls cannot acknowledge the debt. If this mortgage was a joint liability one then be aware that any Ex joint partner may acknowledge the debt for all parties by making a part payment. An acknowledgement/part payment can restart the 12 year limitation period. Finally if the lender has a Money Judgment Order (MJO) then, in theory) they can chase you indefinitely.
Take a look at these two websites that should help:
Please be advised that I'm not a professional advisor so please check all this out with one. If you have any further queries just post them up. Good Luck.
-- M Amos (firstname.lastname@example.org), November 07, 2003.