I have recently received a letter from lender solicitor demanding £28800 which they claimed they lost after selling my house. I surrender my key in 1991. The same solicitor/debt collector had sent similar letter about five years ago. Would you please advise me what I should do and whetehr lender can claim losses after 10 years.

-- Sadrul Hussain (sadrulhussain858@tiscali.co.uk), January 14, 2003

Answers

Sadrul,

They have 12 years in which to make a claim (Bristol & West v Bartlett), usually starting from the 2nd or 3rd missed mortgage payment (subject to what is written in the terms & conditions of your mortgage, you need to check this with a solicitor), so it may well be that they are statute barred. Furthermore, many lenders adhere to the CML's voluntary 6 year code, you need to check whether yours does, you can check whether a lender subscribes to the Mortgage Code by phoning The Mortgage Code Compliance Board on 01785 218200. The following is an abstract taken from their website:

'In addition, from 11 February 2000, lenders who are members of the Council of Mortgage Lenders have agreed voluntarily that they will begin all recovery action for the shortfall within the first six years following the sale of a property in possession. Anyone whose property was taken into possession and sold more than six years ago, and who has not been contacted by their lender about recovering any outstanding debt will not now be asked to pay the shortfall. The Association of British Insurers supports this approach on behalf of the mortgage indemnity insurers.'

You do need to read all the info on their web page regarding this as their are exclusion clauses, their address is as follows: http://www.cml.org.uk/servlet/dycon/zt- cml/cml/live/en/cml/pub_info_dept

Also read the Home Repossession website information, particularly the 'Do's and Don'ts'. Be particularly careful not to acknowledge the alleged shortfall. In any communication with them make it clear that you deny lability and do not admit the debt. If you don't the limitation period will start afresh from the date of that acknowledgement.

If you have any further queries just post them up. Hope this helps.

Mark.

-- M Amos (idgroms@hotmail.com), January 15, 2003.