Response to advice wanted, want to buy our council house, was repo in 1995

Sandra,

I concur with what Moira has said. Be aware that lenders/debt collectors also read this site. I am also of the opinion that when you apply to check your credit rating, this action flags up any registered debt and can be picked up by a debt collector. As regards the CML 6 year voluntary code you should read what the CML actually say:

These are extracts taken from the Council of Mortgage Lenders web site: "www.cml.org.uk/servlet/dycon/zt-cml/cml/live/en/cml/pub_info_dept". Read everything on the web page though, as there are exclusions.

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.

All lenders which subscribe to the Code have now agreed to adhere to it whether they are a CML member or not. You can check whether a lender subscribes to the Mortgage Code by phoning The Mortgage Code Compliance Board on 01785 218200.

I think you really should resolve the shortfall problem first as Moira says. If you don't you can wind up with a charge on the new property and that will also accrue interest!

I would first put the lender to strict proof of the debt and see if the CML vol code applies in your case, if this doesn't result and it's also impossible to raise the shortfall amount and reach a negotiated settlement, perhaps you could get another mortgage with the original lender and include the negotiated shortfall amount in that. If you'll have a lot of equity in it they might accept. Of course, the shortfall fig you would have to pay is likely to be higher than if you reached a normal negotiated settlement. Just an idea anyway. Good Luck.

Mark.

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