How long does a lender have to claim on a MIG? : LUSENET : Repossession : One Thread

How long does a lender have to claim on a MIG, do we think? Does it have to approach the relevant insurance company within 6 years of the sale of the repossessed home? Or does it have a full 12 years? Or is it even less than 6 years?

Is there a definite legal position and/or code of practice on this?

This follows on from the MJO/MIG thread below, and could be important.


-- Eleanor Scott (, April 07, 2001


If we assume the legal premise of the position we outlined above is correct, then logically, it would be 12 years. If we accept that the "nature" of the debt changes upon the exercising of Rights of Sub, then until the Lender claims upon the MIG, thereby passing the debt or a portion thereof to the Insurance Co, the debt remains a speciality one and would be subject to the 12 year rule.

-- Too scared to say (, April 07, 2001.

But wouldn't a lender have to claim pretty quickly on a MIG policy after the property is sold, just as any other 'policy holder' would have to claim pretty sharpish on any policy, after the 'event' or whatever which gave rise to the claim actually occurred? [in this case the sale of the property]. There are usually quite strict conditions laid down about this in all insurance policies.

-- Eleanor Scott (, April 09, 2001.

I think this is the whole crux of the Lender's problem Eleanor. Once they do claim, the debt changes from specialty to simple and they are effectively stuffed.

-- Too scared to say (, April 09, 2001.

Which could effectively mean that lenders who have claimed on a MIG have only 6 years to chase for the *full* amount of the claim?

Suddenly I'm not surprised lenders don't like telling ex borrowers whether or not they've claimed on a MIG or not.

All the more reason why we should all serve SARNs on lenders and their agents. For example, did you know that where the code "Category 40.1" shows up in material SARNed from Abbey/Eversheds it means "Mortgage Indemnity Policy"? Interesting, no?

-- Eleanor Scott (, April 09, 2001.


-- notacompletedummy (, May 17, 2001.

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