Introduction

After you have your home repossessed for failing to keep up with mortgage repayments, you might be dealt another blow with a mortgage shortfall debt. In a nutshell, this is when the home is sold by the lender but the selling value doesn’t cover the outstanding amount left on your mortgage. 

We have five free letter templates that can help you fight back against mortgage shortfall claims. Use one or more of these letters for free as you go through the process of standing up to this type of debt. 

Ask your Mortgage Lender for a Breakdown of Account

The Data Protection Act 2018 allows you to request a breakdown of your mortgage account. This is a good place to start if you have been made aware of a mortgage shortfall debt. You should not be charged for requesting your mortgage lender supplies the breakdown of your account. Use our free letter template to make this request. 

Ask your Mortgage Lender for a Breakdown of Account

Ask your Mortgage Lender not to Pursue the Mortgage Shortfall

You might want to ask your lender not to chase you for the mortgage shortfall due to financial difficulty. Although a lender can typically recover the debt within 12 years, under the UK Finance code of practice, they must inform you of the debt within six years or not chase any of the money owed. Use our letter to ask your mortgage lender not to pursue a mortgage shortfall due to your financial difficulty. 

Ask your Mortgage Lender not to Pursue the Mortgage Shortfall

Ask your Mortgage Lender to Accept a Full and Final Settlement Offer of Payment

If your mortgage lender has chased you for the mortgage shortfall debt within the appropriate timeframe but you cannot afford to repay the whole amount, you could make a settlement offer instead. Our full and final settlement offer letter template for mortgage shortfalls could save you thousands of pounds. 

Ask your Mortgage Lender to Accept a Full and Final Settlement Offer of Payment

Ask your Mortgage Lender to Write Off Your Debt

You can ask your mortgage lender to write off your debt entirely with our other free letter template. We draw upon the FCA Mortgages and Home Finance: Conduct of Business sourcebook (MCOB), which states that mortgage providers should not chase mortgage shortfall when the debtor is not able to pay the money back. 

Ask your Mortgage Lender to Write Off Your Debt

Dispute Liability for a Mortgage Shortfall

You can claim you don’t have liability for the mortgage shortfall for one of many reasons. One of the reasons you may not be liable to pay is due to the Limitations Act 1980, which states that mortgage shortfall debt can only be recovered within 12 years. If you want to dispute liability for the mortgage shortfall,m use our free letter template to make your case easily. 

Dispute Liability for a Mortgage Shortfall

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
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