Sample letter

Ask your mortgage lender not to pursue the shortfall (joint names)

Use this letter where your house was sold more than six years ago and you were first contacted by the lender after 11 Feb 2000.  Lenders should not pursue the mortgage shortfall under the Council of Mortgage Lenders' policy.

25 November 2020

Dear Sir/Madam

Without prejudice

Account number:

You have contacted us regarding the amount you claim is owed as a shortfall on the mortgage following the sale of our property.

We understand you are a member of the Council of Mortgage Lenders (CML). As you will be aware, the CML has the following policy on obtaining repayment of mortgage shortfall debts. This applies to all CML members.

“Lenders are committed to fair and sympathetic treatment of people who have suffered repossession, and accept that individuals should not face long delays before lenders contact them to discuss repayment of the shortfall.”

“From 11 February 2000, lenders who are members of the CML have agreed voluntarily that they will begin all recovery action for the shortfall within the first six years following the sale of a property in repossession. Anyone whose property was taken into possession and sold more than six years ago, and who has not been contacted by their lender about recovering any outstanding debt will not now be asked to pay the shortfall.”

We would point out that the property in question was sold on . Also the first contact we had from yourselves was on .

We therefore suggest that under the CML policy our property was sold more than six years ago and we have not been contacted by yourselves within that time. Therefore we should not be asked to pay any outstanding shortfall debt.

We would draw your attention to the Financial Conduct Authority’s ‘Mortgages and Home Finance: Conduct of Business sourcebook’ which says that if a lender decides to recover a mortgage shortfall debt they must make sure the borrower is informed of this within six years of the date of sale.

We look forward to your confirmation, in writing, that any outstanding shortfall debt will not be pursued against us any further.

We look forward to hearing from you.

Yours faithfully