Sorry about the subject line, couldn't think what to put.

In my case the MIG firm, Royal and Sun Alliance, paid out to the Halifax. When I do not know as they will not tell me! It seems that there is no MJO - I have been told they do not have one - so to my point:

If there was no MJO obtained by the Halifax and the RSA paid out under the MIG then I would think that firstly the RSA were negligent in paying the claim as they did not check everything was carried out properly by the Halifax and secondly that if they now want to recover their money that it is not me who should pay but the Halifax.

My logic says that as the Halifax has claimed on the MIG when they have not done their part in leaving the path clear for RSA to chase me (no MJO) then the RSA should claim back from the Halifax and the Halifax should then chase me for the shortfall (alleged).

Does this make sense to anyone else. It does to me because if I claimed under insurance and it was later found that I had not carried out my part correctly the insurance company is allowed to demand the payment back. Therefore they can demand the payment back from the Halifax.

-- Matt (mattyc@ntlworld.com), March 25, 2001

Answers

Yes, I see what you're getting at with this, and it does make sense, and it all goes to highlight the real possibility that the lenders' stance over many alleged shortfall debts ('We don't need a money judgement') could be flawed (i.e. not withstand a Court of Appeal judgement, especially given the undue delay which seems to be feature of so many of our 'cases').

One thing: how do you know that your lender claimed on the MIG? Is this information Halifax gave out willingly? (Because I don't think that Abbey does.) I'd be really interested to know how you found out.

-- Eleanor Scott (eleanor.scott@btinternet.com), March 29, 2001.

Hi Eleanor

It's nice to know that my brain is still working well!!!!

I know that the Halifax claimed under the MIG as the Royal and Sun Alliance are chasing me saying that as they paid out the laws of subrogation allow them to get the alleged shortfall back from me.

I also know that they do not have a MJO as they have written to say this. So it seems that as long as our educated logic is sound then, if they continue to harrass me then I can say that they should investigate fully the claim made by the Halifax as it seems that there may have been negligence in making the payment.

Hope all is quiet on your front.

Matt

-- Matt (mattyc@ntlworld.com), March 30, 2001.

I have a theory: let me throw this out for your thoughts. It's playing devil's advocate a bit, but in trying to support Matt's logic this occurred to me.

When Rights of Sub are exercised, the Insurance Co typically pays out to the Lender and the Lender comes after you for the shortfall. Where the time limit under which the Lender has to do the chasing expires, the Insurance Co then picks up the mantle and carries on with the game. Are they chasing the same thing? I think not. The MIG payout is an insurance claim, is it not, and therefore the "nature" of the debt has changed. The Insurance Co are chasing you for the sum equal to their payout (and trying it on for the rest if there is a difference.) Assume a MJO was obtained by the Lender in Case A. This validates the debt in the eyes of the Law. The Lender can only chase you for the debt as detailed in the MJO. The Insurance Co cannot chase you for an equal (but materially different) debt too...are they named in the MJO? I bet they aren't. I think this is a legal point but vital to those being chased by anyone other than the Lender(or their appointed reps) where a MJO is in place. Case B - no MJO. Rights of Sub exercised...same as above but the Insurance Co are then chasing you after X number of years. The nature of the debt they are chasing is what? The original shortfall? Or the MIG payout? If it is the original shortfall...then the MIG clause wording is vital to determine which party has the 12 year rights. I think it can ONLY be the Lender in the old policies. The Insurance Co chase you after X number of years because the Lender failed to get anything. They are not chasing you under Rights of Sub..they were exercised already..they are chasing their MIG payout. Different debt..subject to the 6 year rules I believe - from the date of MIG payout - not when the debt reverted back to the Insurance Co after the Lender didn't get anything. Anyone follow me?

-- Too scared to say (iwasduped@yahoo.com), March 30, 2001.

Yes is the answer, I follow exactly what you are saying. Perhaps this is why, despite several times of asking, they will not tell me when the repo took place and when they paid on the MIG (amoungst many other things they will not say).

-- Matt (mattyc@ntlworld.com), March 30, 2001.

This is turning into an interesting thread! It also might explain why Abbey, at least, frequently claims that its MIG affairs are 'confidential'.

I wonder if it might not be worth approaching Joseph Aaron about this (the solicitor who's also an insurance expert, currently representing an ex borrower whose fighting Halifax over a 6-years-plus 'shortfall')?

-- Eleanor Scott (eleanor.scott@btinternet.com), March 31, 2001.

I don't know if anyone can follow what I am about to say but here goes :- We were first contacted in '97 by Eversheds stating they represented the Insurers of the Lender and and claiming a 29k shortfall. Therefore one assumes that the MIG was paid out. When we disputed the time limit (6yrs) they reverted back to representing the Lender. Now, could it be that when the Insurers are after the money, they cannot chase you after 6years because it is not a Speciality Debt and so the Lenders (out of the goodness of their hearts, and a small renumeration, say 5%) take the case on for them because they CAN claim it IS a Speciality Debt under the Mortgage Conditions. They then pay the Insurers back any money recouped , which keeps everyone happy (except the repossessee.) Have I stumbled on to a * glitch * in the Law? I wonder. But, of course, this is just my own personal opinion!! J.

-- Jacky Jones (jones5@btinternet.com), March 31, 2001.

Yes, this is the logical conclusion of where I was headed.... (I think - duh). Do I wish I was a qualified solicitor or what. I'd take myself to court in a test case. I wonder if that lawyer would care to take this argument further for his client?

-- Too scared to say (iwasduped@yahoo.com), March 31, 2001.

I just had a read of an old threatening letter from my luvverly lender. They actually state, in writing, that they are chasing the shortfall even though the MIG paid out, because they are entitled to under Rights of Sub blah blah. Then...they go on to say whatever monies are recovered from you [me] the borrower will be distributed between themselves and the Insurer in the fullness of time under the terms of their agreement, but this is confidential...and does not allow me to dodge the bullet basically...blah blah. Yup. This is worth pursuing methinks.

-- Too scared to say (iwasduped@yahoo.com), March 31, 2001.

Thanks Too scared, I knew I was right! This would also make some sense of why they refuse to show you the MIG. Is there something in that document that could possibly stop them from swapping-ie; Insurer-Lender-Lender-Insurer???? Thanks again. Jacky.

-- Jacky Jones (jones5@btinternet.com), March 31, 2001.

And presumably anyone whose Repo is more than six years old has a right to demand details of MIG payouts, to see where everyone stands legally?

For example, suppose my Repo happened over 6 years ago. I can argue that any MIG payout cannot be claimed from me by the lender under Rights of Subrogation, because is it time-expired after 6 years, not being itself a specialty debt. So I am *entitled* to know how much was claimed, in order to evaluate the current 'shortfall claim' properly.

If it turns out that the lender did not claim on the MIG, then it has stuffed up because (a) it is too late for it to do so now, and (b) it has failed in its duty to mitgate the loss.

Either way, one would think that the lender needs to cough up the MIG policy and claim details under CPR and pre-action disclosure. This would allow us proper scrutiny of these documents.

-- Eleanor Scott (eleanor.scott@btinternet.com), April 04, 2001.