Established in 1992
Mortgage Shortfall Debt Claims|Disputes
IBAS Mortgage Shortfall Debt Claims Unit (IBAS was founded in 1992) - has many years experience in handling and resolving mortgage shortfall debt liability claim cases after home repossession/s. Following a repossession the sale of the mortgaged property can mean that a mortgage shortfall liability is immediately created. It is then that the lender will issue a claim for the mortgage debt after repossession which is then the 'shortfall debt' and the lender will request payment, sometimes many years later. IBAS has a very experienced team providing a unique, totally independent, low priced professional, experienced and confidential service.
We know that a number of Mortgage Express 'shortfalls' are being chased for payment now after UKAR announced (below):
19 Feb 2018
As announced in March 2017, Bradford & Bingley plc (part of UK Asset Resolution Limited), sold two separate asset portfolios comprising performing buy to let loans to Prudential plc and to funds managed by Blackstone. The final stage of this transaction is now complete and the legal title to the loans included in the sale has transferred to Topaz Finance Ltd, an FCA regulated firm, who will manage the loans under the brands of Jasper Mortgages and Rosinca Mortgages.
All customers affected by the transaction are being contacted to update them on the change of ownership. A key consideration for this sale was the continued fair treatment of customers and there will be no changes to the terms and conditions of the loans as a result of this transaction.
Notes to Editors
Approximately 104,000 loans originated by Bradford & Bingley and Mortgage Express were included in the sale.
Prudential plc and funds managed by Blackstone own the beneficial interest in the loans and have separately appointed Topaz Finance Limited to act as the legal title holder and master servicer.
Anyone receiving a mortgage shortfall debt claim from their bank or lender due to a past home repossession should read the Daily Telegraph article to which IBAS contributed - 'Why none of us is safe' on 3rd May 2008 very carefully:
Daily Telegraph Article 03.05.08 - You can't make your mortgage payments, so the bank takes your home. William Little talks to those who've suffered the trauma.
Sara Cummins, head of the Mortgage Shortfall Unit at the Independent Banking Advisory Service (IBAS), says she has been advising an increasing number of well-heeled clients facing the loss of their homes: "They are often embarrassed about the situation they find themselves in because of how much they earn. But I've had to help barristers, solicitors and hospital consultants in the last year," she says.
Yet, even when property owners know the law, the banks can still force through a repossession.
Simon Cox, a 30-year-old solicitor, bought out a jointly owned property from his brother three years ago. He admits now that he took on too much and buried his head in the sand when things became too much. It was a three-bedroom property worth more than £400,000 in south-west London. "I took on the mortgage because I was a professional and I could afford it, and I felt obliged because it was my brother. But two years on from buying out the property, I started experiencing real financial problems. Arrears mounted and the bank repossessed the property," he says.
Yet this was not the end of the story. The following year, the bank started to pursue Mr Cox for a mortgage shortfall of £145,290 - the difference between how much they got for the property and how much was left on the mortgage.
"When the bank chased me for the shortfall, I was in sheer panic. I thought the repossession was the end of the story. I didn't know what to do. Being a solicitor, I tried to negotiate with them myself, but in retrospect this was not a good idea," he says.
"The bank saw this as a weakness and used the information that he was a solicitor to threaten bankruptcy as this would mean Simon's solicitor's licence would be suspended," says Sara Cummins of IBAS, to whom Simon eventually turned for help.
"I was forced to advise my senior partner of the pending bankruptcy and I was immediately suspended, making the situation even worse. I then had no income at all," says Mr Cox. The bank then turned the screws tighter still. Under pressure, Mr Cox gave away vital information.
"Cox had fallen into the trap of telling the bank's solicitors that his parents were willing to make a 'reasonable' settlement on his behalf for £20,000 and even provided a letter from them to this effect," says Ms Cummins. "This was his greatest mistake as it provided the bank with sufficient information to search his parents' asset position. It was then reluctant to negotiate a settlement as they found out that Simon's family were wealthy and should settle his debt in full."
IBAS then stepped in and negotiated a full and final settlement of the debt of £50,000, which his parents paid. Luckily, Mr Cox has since had his licence restored and returned to work in the City.
Yet his experience demonstrates how far banks will go to get their money back. Ms Cummins says that banks will keep a check for many years on whether a person with a repossessed property buys another in the future. They will then try to claw back any shortfall. This happened to 54-year-old chartered surveyor Mr P last year, after a repossession in the early 1990s.
"The bank in question is now threatening legal proceedings with a view to gaining a charge over the family home, which has been owned by Mrs P for 20 years whereas Mr P, her new husband, only recently went on to the deeds," says Ms Cummins. Now his wife's house is in danger of being repossessed as well.
"It was when my name went on the deeds that they discovered that I had another asset they could get their hands on, and they came calling," says Mr P. "It has been more than 12 years now since my house was repossessed, and surely they can't chase after that. But they're extremely intimidating, threatening that unless we pay £50,000 they will repossess the house. It is very stressful. My wife is on the edge and is very unwell because of it."
Ms Cummins is clear about banks' tactics. "Sometimes they will sit on the information for a few years, waiting for the property to gain value. They are very calculating and ruthless and push until they get what they want by whatever means possible."
Please Note: Names/content has been edited to protect those involved in the IBAS input to the article published in The Daily Telegraph
The Daily Telegraph article demonstrates the lengths lenders will go to to obtain payment and illustrates what you should not do after receiving mortgage shortfall debt claims.
See also the Telegraph article by Jenny Knight which is still relevent today (link below):
The hidden danger of joint mortgages
“When there were many creditors still chasing me for debts after my home had been repossessed 5 years ago the last thing you want was another 50k mortgage short fall. When all options had ran out there was only one thing left to do which was to declare bankrupt .however, just before I commit myself I embarked upon IBAS website in my search engine. After reading some testimonies I was a bit sceptic at the beginning because I had tried Financial Ombudsman and got nowhere.
But it was my last straw so I thought I’ll give it a go. As soon as I became a member things got on pretty quickly. They gave me all the questions and I reply with all the answers. My situation was that it’s highly unlikely I can repay this kind of debt in my life time. IBAS accessed my situation and told me what would be the likely outcome of my case. IBAS had negotiated a full and final settlement offer to the lender on my behalf successfully. It was the biggest relief I had since I got buried in this financial turmoil. I can’t thank Sara Cummings and her team in IBAS enough. Thanks guys and deeply appreciated all your helps. Mortgage Shortfall people out there please go to IBAS and find out more.” - Mr C - November 2016
IBAS has featured on BBC TV, BBC TV News, ITV News, Meridian TV and Sky TV News since 1992 and also contributed banking editorials and business banking articles for the Sunday Times, Times, Daily Mail, Daily Express, Telegraph (as in cases above) and Daily Mirror.
The side bar pages show how others in fear from a mortgage shortfall debt have obtained resolution & the information in those pages show why customer's telephone calls to lenders are always dangerous.
They also evidence how and why lenders pursue mortgage shortfall debts (once repossession and sale of the property has taken place) and why 12 year old mortgage debts or much older debts are 'chased' by lenders - First to gain an admission of the debt and then to obtain payment from your assets, which may include your new home.
Lenders pursuit of payment or gaining an early 'admission of the debt' can be extremely 'vigorous' and may well be intimidating as lenders seek payment from mortgage shortfall debt claims or shortfall demands for payment of a claimed mortgage shortfall debt.
Last modified: 17th November 2019