URGENT! How does a charge against a property work?

greenspun.com : LUSENET : Repossession : One Thread

My mum and dad had their house voluntary repossessed in 1994 following problems with making repayments since 1993. (The mortgage was with Abbey national) After living in rented accomodation they finally bought another place in 1999. Dad passed away in 2001. In late 2002 my mum received a letter, I believe from eversheds (dealing on behalf of Abbey Nat) asking for repayment of the shortfall against the repossessed property. She went to the CAB who advised her to ignore any correspondance, which she has done!! She has now received a letter stating if she doesn't make contact a charge will be placed against the house she now owns. How does a charge work? and can they do this?

Any assistance will be appreciated. Fal

-- Fal Patel (Fal.patel@tiscali.co.uk), July 07, 2003



Firstly, I'm very sorry to hear of the loss of your father. Can you tell us whether your mum was a party to the mortgage of the repossessed property, was it a joint mortgage??


-- M Amos (idgroms@hotmail.com), July 07, 2003.


Thanks for the prompt reply.

Yes mum was a joint party to the original mortgage. She let dad deal with most details and has very little knowledge of the mortgage details.


-- Fal Patel (Fal.patel@tiscali.co.uk), July 07, 2003.

A charge can only be placed against a property with either, a) your consent (i.e. when taking out a mortgage) or b) a court order

It looks as if AN are working to the 12 year rule despite the voluntary code which says members of CML will not pursue after 6 years.

The lady should not acknowledge any correspondence or admit to the debt as that will start the recovery period clock again. She should see a solicitor quickly for proper legal advice on what to do. Otherwise the next step will be for AN to issue a court summons for the full amount, and on judgment seek to cover the debt with a charge over her new property. In this case, they cannot impose a charge without a court order (unless of course it is by amicable agreement in order to avoid court procedings), but however, the danger is that once a charge is imposed, it can, though not too often, be turned into a dispossession and order for sale.

-- David J. Button (davidjohnbutton@supanet.com), July 08, 2003.

Hi Fal,

Very tragic and traumatic when things like this happen - lenders claim to be symphathetic but never demonstrate it :-(

Advice is as other posts but I wouldnt necessarily seek legal advice unless court forms or a land registry charge notification arrives through the letterbox. Some solicitors tend to 'put their feet in it' and as an agent representing your mum could re acknowledge the debt for another 12 years.

Incidentally some temporary relief may happen soon - the rumour is that Eversheds are leaving the mortgage shortfall arena very shortly also follow the info on this site - SARN the lender - see what they have on your mum.

Good luck and best wishes.

-- fairerfinancialworld (fairerfinancialworld@hotmail.com), July 09, 2003.


I see you've received good advice already.I have a copy of a SARN letter if you want one. Although, it's been mentioned, please do be careful not to acknowledge the debt, otherwise the 12 year limitation period will restart. Always state that you do not acknowledge the debt, that you deny liability and dispute the debt in any communications. Offers to settle should be made "ex gratia" and have "Without prejudice" written on them. If you have any further questions just post them up.


-- M Amos (idgroms@hotmail.com), July 12, 2003.

Fal, you need to ask your mother to approach the court for copies of the possession order if she has not kept any. If the lender obtained a money Judgement at the same time as the repossession your mother is in danger of them applying for a charge on this property. If your monther needs to contact the former lender it is best to do by telephone, if any letters are written they must dispute the debt and be marked "without prejudice". She needs to see a copy of the Money Judgement if there is one.

You should also read the Debt Collectors Guide which can be found on the OFT web site. http://www.oft.gov.uk/News/Press+releases/2003/PN+97-03.htm

Eversheds will need to show that previous contact had been made within 6 years from the sale of the property, otherwise your mother falls within the CML policy.

Hope this helps Jane

-- Jane (jane.glover@ntlworld.com), July 16, 2003.

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