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Response to court next week

from M Amos (idgroms@hotmail.com)
Some further info obtained for you....

I would have thought that the worst case scenario is a suspended possession order (SPO) on terms of current mortgage instalment plus something off the arrears. C&G v Norgan (CA) allows the court to spread the arrears payments over the remaining term of the mortgage if this is necessary.

It is worth requesting the court to adjourn the case 'sine die' (indefinitely) on the above terms on the basis that no possession action should have been taken as the borrowers had paid a large amount off the arrears and were trying to negotiate an arrangement to clear the rest. If the court will not do this, the fall-back is the SPO.

I would have thought that it could be argued that Abbey had not complied with the CPR 'overriding objective' in that they refused to negotiate reasonably and did not do anything to avoid the necessity of court action - in other words, the possession action was unreasonable, unnecessary and unjustified in the circumstances.

Because of the non-compliance with the CPR in bringing an unnecessary claim, the court should be asked to order that 'the claimant does not add the costs of this action to the security or otherwise recover them'. If the court makes no order as to cost, Abbey are able to add them to the security (i.e.to the debt) under the terms of the mortgage. These costs can be considerable.

If Abbey are allowed their costs, these will be added to the mortgage and will accrue interest so it is important to consider what (extra) interest orother charges are accruing and try to increase the monthly payment to cover these

The court may not be prepared to disallow Abbey's costs but, as above, I think the worst scenario is an SPO. It is important that the borrowers attend court to try to persuade the judge that they have made every effort to keep Abbey informed of their circumstances, paid what they could while in financial difficulties and since getting back into work, have resumed the full monthly payment and paid a large amount off the arrears. Abbey's lack of cooperation needs to be highlighted, and it would be useful to take as much detail of the contacts with and offers to Abbey/their solicitors (and their responses) as possible, e.g. in the form of a chronological log or diary (some/all of this may have been sent to the court already). Non-compliance with the Mortgage Code should also be highlighted, with copies taken to court to give to the judge and the other side (print them off the net).

The borrowers should write to the court and Abbey's solicitors asap stating that they intend to ask the court to adjourn the action on terms of the monthly instalment plus £X towards the arrears (this needs to be as much as can comfortable afforded but in any event enough to clear the arrears by the end of the mortgage) and wish to oppose Abbey's right to costs on the grounds that the claim was premature and unnecessary etc. It is better to declare your intentions as soon as possible and not raise issues at the hearing without warning. The court does not like this. An income and expenditure statement should be taken to back-up the offer. It is possible the hearing will be adjourned to give the case more time to be heard. If this happens, the borrowers should start paying the sums offered asap

Hope this is helpful.

(posted 7172 days ago)

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