My daughter is being persued for £13k shortfall in 1994. She was duped into filling in I&E form by Drydens thereby started clock ticking

Through this site I have been able to restore her shattered nerves and we are up for the fight.

Bradford & Bingley will not (or maybe cannot) produce Mortgage Deed or MIG policy. I will let you all know what happens next.

-- mike tansey (tanseym@yahoo.co.uk), March 23, 2004

Answers

I have made some notes for you of which may be of assistance, if your daughter has not beneficial interest in either her own property or someone else’s do not panic it’s high court stuff and very expensive to recover more so if the ex borrower has limited income and no assets. £13K without the interest remember, should it go legal they may attempt to claim interest subject to the limitation period and the appropriation of the mortgage account. If your informed that you have no rights, tell them rubbish you have 3rd party rights under the 1930 Act and the The Third Party 1999 Act. With regards to the MIG, although you do not gain any benefit (post 92) from it the B&B would have to show that they had mitigated their loss by claiming on it of which they have a duty to do so, they can not by pass the MIG and go direct to the borrower as the MIG is an indemnity of which only 2 parties can be involved and they are the lender and the surety (insurer). So you do have a right to ask whether or not they had claimed and request that they show proof of such a claim. If they do not provide the information as well as other pieces of information you can apply to the court for pre-trial disclosure for specific documents. I have explained all this in the additional passage below. Remember you do not have to have court proceedings against you to initiate ‘Pre-trial disclosure’ ( cost £30 without a hearing, £60 with.) try it, it realy kills them and turns the cards over.

Should they have not claimed on the MIG, warning bells, they should have, why have they not, simple when you look at it in a bit more depth, here we have to look at the interrelationship of Insurance and Mortgages.

Post the ABI guidelines produced in mid 1992, the way in which MIGs were sold changed considerably, the warranties changed, and the excess was applied usually about 20% against the lender. Prior too 1992 most MIGs covered the full amount for the benefit of the lender. The MIGs were offered by Insurance companies to lenders being part of a deal between the lender and insurers so that the insurers could sell building insurance and endowment polices they all thought they were on a winner until the property crash, high unemployment and recession. So the insurers got a good deal and the lenders got a good deal as during the 80’s their commission was about 20% reaching up to about 50%. So where are we going on this, hang it’s coming.

The lenders became greedy and wanted to sell the insurance themselves so they started to offer their own insurance hence the pressure was on the insurers to pay more commission, however what had happened the lenders particularly B&B frustrated and repudiated most of the existing MIG policies in other words they were no longer able to claim on them.

So the question arises should they have not been able to claim how does the borrower stand when a shortfall is claimed?

The insurance pool lost over £10bn from MIG payouts, prior to 1992 so you see why ABI brought in new guidelines.

So you can see why B&B and the other lenders do not wish to get bogged down with MIG side of things particularly had they not claimed!

Some other bits and pieces

First things, if you are being chased just before 6yr point (normally the case at 5yrs 11mth’s) don’t respond, only respond if you get a county court claim. If you get chased at the 12yr point i.e. 11yrs 10mths (normally the case) don't respond again until get the county court claim. They will chase you at the first point only because of the limitation period of 6yrs to chase for the interest element which in some case can be quite substantial or just enough to cover the legal fees if it goes slightly sour at the judgement time. If they chase you at the 11yr point they are on dodgy ground as far as the court is concerned especially if there has been a history of communication or that they were aware of your whereabouts, but note they would have to do this as the 12yr limitation period would apply.

So do you make contact or not, there advantages and disadvantages.

The advantages – if it goes legal your in a strong position in one respect as you would be seen to be abiding by the pre-action protocols (these are the general protocols not like the ones for personal injury etc). If gives you an advantage of time to obtain information, yes but, you may say, they don’t supply anything. It is a lot simpler than it looks. How to get information firstly follow the information on this repossession website in respect of SARN. Treat this differently than your normal information requests. The SARN can be quite selective and a lot of information would be hidden or just removed/snowed out. Your request for further ‘information that supports their claim’ would be for more specific information i.e. a copy of or proof that the MIG had been paid, copies of the sale literature etc. So make sure all requests are sent recorded delivery just to make sure they have received them, you can even chase up the recorded date and time on the royal mail website.

Now, how to deal with the negative response. On your 2nd / 3rd request you state this ‘ Should you not respond to my request for this information I shall have no choice but to apply to the county court for this information under CPR 31.16 and that further I shall seek cost of such an application’. (Make sure your write every 7days for the information if you going to use the CPR 31.16 route.) You can make this formal request on form N244. Make sure that you specifically state what information you want and how long and times you had requested such information and that you request that the court ‘Orders’ that the information requested be provided. The cost is about £30 without a hearing £60 with a hearing. Should you get stuck on this, say so on this site I shall seek you out and advise accordingly or you could ask for a solicitor to do it. You can apply for this ‘pre-trial disclosure’ before legal action has commenced only the threat of legal action would be enough. This will most certainly upset the apple cart and get things moving in the information sense. If the court does order and they refuse to send the information you can ask for the case to be struck out for not complying with a court order in relation to their claim (subject to a claim being made), which means if they had just made the claim 1 month before the 6yr point the 2nd claim would have its interest element time bared 6yr+.

So in short getting information is possible.

The disadvantages are that you have confirmed who you are; they will intensify their demands for money and refuse to provide information. Just put the letters aside and politely request that they provide all the information you have requested before you respond more directly to their alleged claim.

By this time they would have already carried out searches on your abode, at the land registry office, checked you post code details for affluence, had you checked by a local private investigation team and so on. The first thing they want to know is, are you worth taking to court over. If you have no assets, not employed or on low income and that your circumstances are not going to change, they are hardly going to take you to court for over £5k especially if you contest it as they are only going to waste £3.5k minimum in legal fees which would take years to recover if at all.

The most important piece of information they would want would be your telephone number followed by your NINO (National Insurance Number) they would pass this on to a dodgy bloke and have it checked for income details either via DWP (DHSS) or the Inland Revenue at a cost of about £20 would know more about your income details than yourself.

If you are renting, in other words don't have your own home or equity in another property or your partners, you’re in a strong position. If you do own your home or have equity in another and the lenders know this then sadly you’re on a looser they will pursue you via the courts as they will know you have access to funds in the short term or long term (your looking at a charging order here). Though if you have children they would be unable to force a sale on your home until the children were of age.

If you have no home or equity they just want you to pay money, even if its just £10 so that the limitation period starts again or they have a CCJ they will just wait until your circumstances change then jump on you again. However in this situation you are more likely to get a good Full and Final offer accepted unlike the unfortunate who have their own home or equity in another.

If you want to know anything else JUST ASK

-- JUSTASK (justask@btinternet.com), March 23, 2004.