Theoretically the mortgage blacklist contains details of people who have been repossessed. It’s supposed to be maintained by the Council of Mortgage Lenders. They say that it’s held by the two main credit reference agencies and that you have to ask the lender who repossessed you which agency it records its repossession information with. But when we asked different lenders on behalf of people who had been repossessed the lenders told us they didn’t know who they deposited this information with. And that they only deposit this information in certain cases. But they wouldn’t tell us which cases. We checked the two main credit reference agencies for some repossessed people and found no signs of repossession details. It’s very fishy. We’re investigating the blacklist further; we have suspicions about how it actually works but we’ll post more when we have more evidence.

By the way, the Council of Mortgage Lenders and the credit reference agencies are very concerned about people calling it a blacklist. They say it isn’t a blacklist, just a record of repossession information. We say: it’s a blacklist.

The credit reference agencies say lenders record repossession information that includes:

• the repossession address
• the address from which the mortgage application was made
• the address that the repossessee has moved to.

Note that the credit reference agencies are also members of GAIN – the Gone Away Information Network – which lists debtors who move address without giving a forwarding address. We’ve found no signs of any repossessees actually being listed by GAIN members but we don’t have access to the whole list. Again, we have our suspicions about how the list actually works and will post more evidence when we have more information. In the meantime, you can see the Council of Mortgage Lenders’ information about the repossession blacklist at http://www.cml.org.uk/faqs/posreg.htm

If your lender applies to the court for a possession order and the court grants it, then this will be recorded by the Register of County Court judgements. This is separate to the Council of Mortgage Lenders’ possession register (though there are close links between the Register of County Court Judgements, which is actually a credit industry-owned company, and mortgage lenders). If you hand in the keys to the property – a voluntary repossession – then lenders do not usually apply to the court for a possession order. This is why – we think – many repossessees do not face a money judgement order and can find no trace of their repossession on their credit reference. We think the credit reference agencies do still hold information about the repossession but that you have to serve a full SARN notice on them to see it. We’d like more feedback on this.

As briefly and simply as we can explain it: both Abbey National and Nationwide have started threatening – and using – Statutory Demands to bludgeon repossesses into paying shortfall demands.

Carol Riley’s National Association of Mortgage Victims, working with Mary Ward Legal Centre’s Ahmad Butt, has done a great job of having two of Nationwide’s thrown out of court. We don’t yet know if anyone has beaten off any of Grabbey National’s.

Here’s how they work – and how to beat them.

Grabbey or Nationwide send a letter demanding that you pay the unproven debt within 21 days. This is the statutory demand. Somewhere in the wording will be a threat to make you bankrupt or insolvent if you don’t pay up within those 21 days.

You have 18 days from the date of the letter to get to court and file an application for set aside. You’ll need to go to the court to get the two forms you need to do this. According to one advisor, the forms are not very user-friendly so you may want to take them down to your local Citizens Advice Bureau for help filling them out.

Once you’ve filled them out you must hand them back in at the court, where you will also have to swear an affidavit. This is a lot less scary than it sounds. It’s where you say why you want the Demand set aside. Your reason is that the lender will not prove the debt and that you think the MIG was missold so you want the lender to justify it or go through Civil Procedure Rules or a court hearing.

If you’ve been following the Home Repossession Page’s suggestions you’ll already have a ream of letters from the lender, which evade the issue of giving you the proof, you want. If you haven’t been following the Home Repossession Page’s suggestions, here’s a good reason why you should.

Our main source says:

“The proper use of such demands is where the court is used to instigate the distribution of a debtor’s assets in obvious cases of undisputed, proven debt. Make the affidavit part of your application for set aside VERY clear; it has been known for judges to refuse set aside even when it is obvious that the demand was an inappropriate action.”

If you don’t apply to have the demand set aside, the lender will likely go to court and ask to have you made bankrupt. This should involve a hearing and you should be notified of it and have a chance to put your case against it. But your chances are a lot better if you get the original Statutory Demand set aside.

And if all this sounds like a nightmare… yup!

That’s why Grabbey National and Nationwide do it.

Our source reports a particularly nasty use of Statutory Demands by Curtis solicitors of Devon.

“After three letters, within ten days of the third, if their claim is not disputed and just ignored, Curtis may serve a statutory insolvency demand upon you (SID). If you haven’t made your position clear to them, they will ‘twist’ the law and use a SID to make you bankrupt – sounds unbelievable but true! SIDs are inappropriate where no money judgement orders are issued and/or claims are disputed but if you just keep quiet it will be Curtis’ hope that these facts are overlooked by a judge reading their SID, especially when you’ve been shown to be uncooperative by not communicating – you’ll be assumed to be in the wrong. It’s crazy but all of a sudden the onus of proof goes to you, and will probably involve using a solicitor – not the end of the world but still costs time, hassle and money.

IT MAY BE WISE TO ACT VERY QUICKLY [if Curtis is pursuing you]. If you chose to do so, send your correspondence by recorded delivery it needn’t say anymore than is advised on the home-repo website but make it very clear that you are treating the situation seriously but require proof of the claim before you can proceed.

Having come across similar problems with UK banks and lenders, it doesn’t surprise me that there are strange things afoot behind their decisions to lend or not. I enjoyed your pages and would like to add some information that may be of interest…

A few years ago I (like many others) got into some serious financial problems. I could go into the details if it helps, but to cut a long story short, I consulted an Insolvency practitioner who explained some things:

Banks are unlikely to throw good money after bad if you seriously default on loan payments. They will put a lot of pressure on (debt collectors etc.) and even threaten court action, but what they really want is for you to agree to pay the debt for the rest of you life. They will get court orders to reposes, but if you are in a negative equity situation after the sale, this is when you really start to feel the pressure.

Apparently most large loans are covered internally within banks by insurances. When a borrower defaults, the insurances are cashed, thus covering the loan. This is possible because most banks view loans as ‘low risk’ investments.

Bearing this in mind it is therefore obvious that settlement a settlement can be made. It is possible to re-negotiate the debt to around 8% of the outstanding value! This should be good news for everyone who has ever borrowed honestly, and tried their very best in difficult circumstances to keep the lender happy, and inspite of that has got caught with apparently no way out.