I have just received a letter from solicitors representing Nationwide building society. They tell me that I owe them just over £30000 as a shortfall payment, my mortgage was £42000 and the property sold for £20000, significantly less than it was worth.

They are saying that for the next 28 days they are willing to accept a payment of £3000 and write off the rest of the money. After the 28 days though, they say they will take steps to recover the full amount. I received a letter from them just over a year ago asking me to get in touch with them, but I ignored it.

My questions are : Would it be worth me writing and offering them £2000 or would this just cause me trouble if they don’t accept. Also come October it will be six years since my keys were handed in, if I can avoid contact with them until then would I be in the clear, or does the law still allow them 12 years.

If anyone has any thoughts about this I would be very grateful to hear from them. Thank you.

-- Gary Long (gazman65@hotmail.com), July 20, 2001

Answers

Gary

If the letter that you got a year ago was really the first then they are time barred by the Council of Mortgage Lenders agreement. It is likely, however, that they will have sent letters out to other addresses and will therefore say that they commenced recovery proceedings. This is highly debateable as the act of sending a letter does not constitute contact being made and as per the wording of the agreement it is up to them to prove that they contact you or that you ignored their letters.

That aside, can you afford £2000. If you can then there is no harm in making an offer - Mark the letter 'Without Predjudice' - the only thing this will do is show them that they had in fact made contact with the letter of 1 year ago which as it is outside the 11/2/00 deadline then they could be time barred.

If you make the offer I would consider offering a bit less and negociating upwards and if you get agreement the ensure that you get a letter saying that this is in full and final settlement and that no further contact shall be made either by the lender or by any third party on this matter. Also ensure they agree to remove all reference of the 'debt' from all credit reference agencies.

It must be good to see the back of something like this so if you can and you feel that it would be wise then by all means make an offer.

-- vpc (vpc@ntlworld.com), July 20, 2001.

I think the above is a reasonable strategy and is worth consideration. If you do make the offer keep it brief, make it clear you dispute liability but are making the offer simply to get them out of your life (otherwise if they don't accept the offer they will say you obviously accept liability - else you wouldn't have made an offer...)

However, if they do accept, your letter to them has to make clear it is in full and final settlement etc etc. I think there is a sample letter somewhere on the site, but if there isn't I'll put mine on. I got mine courtesy of NACABS policy unit (national association of CABS).

-- (bluemoon@mcfc.co.uk), July 21, 2001.