Mortgage shortfall
If any balance remains after the sale or repossession of a client’s home, the lender has 20 years to recover the capital amount owed and five years to recover any interest owed.1s8(2) PL(S) Act 1973 Note that the lender/creditor only has five years from the date of sale or possession to decide and inform the client of their intention to pursue them for recovery of any shortfall.
Advisers should be mindful of the Financial Conduct Authority’s rules under The Mortgages and Home Finance: conduct of business sourcebook (MCOB). MCOB 13 is concerned with how firms administer a regulated mortgage contract, administer a home purchase plan and administer a sale shortfall.2