shortfall letter before property is sold : LUSENET : Repossession : One Thread

Since my previous question, I have received the following letter from the Halifax....

"Following the repossession of the above property it is anticipated that when the property is sold there will be an estimated amount outstanding of #17416.80.

It has always been the Halifax's property to instruct debt collectors or solicitors to pursue borrowers directly for recovery of the loss, but this course of action is only carried out where an acceptable arrangement cannot be agreed direct with the borrower first. I am sure you would wish to avoid the prospect of further recovery action being taken against you using debt collecting agents or solicitors if at all possible.

The Halifax would be prepared to accept any reasonable offer that you wish to make towards the loss, either by lump sum payment or alternatively by an agreement to pay an affordable monthly payment over a period not exceeding 10 years.

If an agreement can be reached which is acceptable to both the Halifax and you and this agreement is fully maintained by you, the Halifax will discharge your liability in connection with the loss and no further debt recovery action will be taken by the Halifax against you and the additional mortgage security company.

It is to your advantage to consider your position as further recovery action by the Halifax will be necessary if we cannot come to a mutually acceptable arrangement......."

The letter goes on to request my response within 14 days.

The Halifax haven't even sold the house yet! I know that they are putting it up for sale for #16,950 whereas I paid #29,000 for it 3 years ago.

I have called them and requested copies of their valuations which they won't send - I was just told that I would be hearing from them with details of the loss. I was also told that they would be looking to recover 100% of the shortfall that makes #145 per month every month for 10 years!!

Should I avoid making any kind of offer until the house is actually sold? If it is sold for less than their asking price, could I be liable for a bigger shortfall?

-- Pendle (, March 16, 1999


What you should do depends primarily how up for a fight you are and to what extent you fit into the categories of person that lenders have trouble deciding whether to take to court or not. You can see more about these in the Do's and Dont's section of the site (which is in the repossession section).

We are seeing signs fo some lenders being more prepared to back down but ultimately, it depends on to what extent you are prepared to fight.

-- Lee (, March 18, 1999.

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