| If your lender has repossessed the property via a | | | | this or more likely, apply to be able to enforce a |
| court order, or you have handed back the keys to the | | | | money judgement on the repossession. |
| property, you may want to know how much you will | | | | There are different rules as to how long in time the |
| be liable to pay back. However until the property is | | | | lender can take to come after a debtor for the |
| sold that will not be clear. However the shortfall has | | | | shortfall. If it is a capital shortfall, then under the terms |
| arisen we can advise you how best to deal with it. | | | | of the law the lender can still take steps to recover |
| It is the responsibility of the borrower to continue to | | | | the shortfall for up to 12 years. However that being |
| pay the monthly mortgage repayment (including capital | | | | said, many lenders have signed up to the Council of |
| and interest), and to continue to maintain and insure | | | | Mortgage Lenders code which confirms that they will |
| and repair the property until such time as it is sold. | | | | not take steps to recover shortfalls greater than six |
| Many repossessions happen in an economic | | | | years old. This is the same length of time that they |
| slowdown just at the time when property prices are | | | | have to recover interest on the loan. |
| falling as well. So whilst the lender has a "duty of care" | | | | If you are unsure about how much money you owe or |
| to you to obtain the best possible price for the | | | | from when this liability runs, you should take advice. |
| property and to keep any potential loss on their part to | | | | If you cannot afford to pay off the shortfall in full then |
| a minimum, this may be very difficult in a market that | | | | there are possible solutions:- |
| has a diminishing asset. Many lenders are now placing | | | | - Offer a lump sum in full and final settlement. It may |
| the property out to rent for six to twelve months. | | | | be that if the lenders can be convinced that this will be |
| When the property is sold, the costs of the sale such | | | | all that can be obtained they make take the offer. Be |
| as solicitors and estate agents are taken from the | | | | sure to get it in writing and marked "Full and Final |
| sale proceeds and then the mortgage redeemed. If | | | | Settlement" |
| anything is left over any second charges are | | | | - If there is no chance whatsoever of paying of the |
| discharged as well. When all the available funds have | | | | liability the lender may write off the debt completely |
| be applied, anything that left unpaid will be known as | | | | - Bankruptcy may be the only option for very large |
| the mortgage shortfall. In a falling market such as we | | | | shortfalls and we are taking a large number of people |
| have at the moment, it is not unusual to have shortfalls | | | | through the process because of mortgage shortfalls. |
| of up to £50,000 | | | | We deal with many people who have suffered |
| If there will be or is a shortfall the lender can sue for | | | | significant mortgage shortfalls. |