Response to national home loans (or paragon) debt collectors

Hi David,

This is what the CML Website has to say about it:

However, lenders are committed to fair and sympathetic treatment of people who have suffered repossession, and accept that individuals should not face long delays before lenders contact them to discuss repayment of the shortfall. Where a forwarding address is known, most lenders will contact borrowers fairly soon after possession with a view to agreeing a manageable arrangement for repaying all or some of the debt.

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.

Does this time limit apply to every case?

The new time limit does not affect anyone who is already -

adhering to alternative payment arrangements for the shortfall debt; or

who has already been contacted by the lender, even if the initial contact was made with them by the lender after six years from the date of the sale of the property in possession. The six year limit only refers to beginning recovery action and does not affect a lender's ability to recover the shortfall debt over a longer period. If there is evidence of mortgage fraud, the new time limit will not apply.

Following the sale of a property in possession, lenders often find it difficult to contact the former borrower to advise them of any surplus monies or shortfall debt. Lenders use a variety of measures to identify where the individual is now living. This might include using tracing agents. Situations can arise where a lender or its third party agent is trying to contact the individual (for example, by letter or telephone) to discuss repayment of the shortfall, but the individual simply chooses to ignore such contact. This is despite the fact that the contact is being made at the individual's new address. In these cases, lenders will consider that contact has been made for the purposes of the new six year limit. If an individual is unclear whether contact has been made within the six year period, the lender will be able to confirm the position.

So in other words they can (by CML's own website's admission) contact you after 6 years.

As Mark says follow the Do's & Don'ts - good luck and the Home Repo site is a great source of support.

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