People never know how to deal with a SARN response.

The answer lies in this question: "why did you serve the SARN?" The answer is: to get hold of evidence about the strength of the lender's claim - without having to wait for the lender to try to sue you. So look through the lender's SARN response for evidence of wrong-doing and carelessness.

The SARN response is part of your attempt to build up evidence. It goes along with the notes you should be making of estate agent's comments about prices of property in the area, with details of the mortgage, with press cuttings about mis-sold Mortgage Indemnity Guarantees, etc.

Go through the SARN. Put sheets in date order where you can. Number each page.

Then get some paper (or a spreadsheet program) and make a list of dates on which they did anything (commissioned agents, sold the house, claimed on the MIG, cashed in endowments, reviewed the numbers, wrote to you, whatever...). Next to each date make a note of amounts that they claim they received that date (if any) and/or amounts that they claim you owed and the evidence that you have or that they have given you for each action. You are looking for discrepancies. You are looking for the bits of evidence that you do not have.

Aim for something like the table below. It's a hassle - but it's not as big a hassle as paying £30,000 to a negligent, mis-selling lender.

Keep on noting down what they did. Keep on filing all your evidence in a sensible way so that you can find different parts of it quickly.

Most people find some oddities in their SARN response. In the example above, you can see that the lender turned down an offer within a month, only to sell the house for a much lower price only 18 months later.

People find all sorts of odd things in SARN responses. Click here to see one Abbey National's customer's discoveries in the SARN responses she received.

What is not good is to confront the lender with the detail of what you have found. If you do, they will knock off £20,000 and pursue you for £10,000 (or whatever) instead. If they subsequently go to court they are more likely to claim they were "reasonable" if they have done this. But they will only do this if you give them the opportunity by confronting them with the evidence! So don't do it.

If you don't confront them with the errors you have found and if they do serve a claim (what used to be called a writ) on you, you can do two things:

1. respond to their claim by issuing a "counterclaim" against them for their mistakes (instead of responding with a mere "defence")
2. point out that you are happy to drop your counterclaim if they drop their claim
3. provided justification for forcing the lender through full disclosure, which is a pain the bum for them

By formally responding to their writ with your own counterclaim (maybe for mis-selling a MIG or for negligently underselling the property), you have raised the stakes. You are negotiating from a very much stronger position. Your position is stronger partly because you are more likely to be able to claim costs against them, even if they win (because the mistakes you found were a good reason for you not to have bothered negotiating with them in the first place, and partly because they may face a higher chance of losing if they do go on to court.

So you need to present their mistakes to them after they have issued a claim.

How do you continue to collect evidence when you don't want the lender to cotton on to how much of their activities you can criticise?

SARN every other party that were involved (you identify them by looking at the response to each SARN!) and keep asking for documentary evidence for everything that the lender claims. It is unlikely that they will put the effort into trying to work out what errors you have noticed in their claim. They are too busy trying to cut their debt-chasing costs to do that.

You don't have to approach it all this way. You can ask them to explain each and every odd-looking step in their actions. Many, many people do this and find that the lender or its debt collector simply avoids answering the questions. (Hardly negotiating, eh?)

Once they've begun to found oddities, some people simply respond to each new demand with a request for proof of the lender's claim, without specifying what exactly they think is wrong. They just keep asking for Mortgage Indemnity Guarantee (MIG) documents (if they think the lender mis-sold a MIG to them) or evidence of appropriate marketing of the property (if they think the lender undersold it).

They are putting it back on to the lender to read their own files and explain themselves. If you read the first sequence of letters on the Lender's shortfall letters page in the Repossession section of this site, you'll see a repossessee doing just that. It's a lot easier to write brazen letters like this once you know that the lender's own files contain the evidence of their mistakes.

If you have found evidence of wrong-doing or negligence, then once you have gone as far with all that as you can - ie your lender is just sending variations of the same letter over and over again - then you can reply to any further lenders' letters with something along the lines of:

"Thank you for your demand of xxth month year. I feel no need for action on my part given the poor evidence for the alleged debt."

If you find no evidence of wrong-doing, you may want to sit tight like this or you may want to make an offer, which should depend on how much of a loan papertrail you have left in your life, what assets you own (houses, expensive cars) or what you earn that is PAYE.

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Last modified: 07 Jun 2002
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