In the UK a homeowner was given clear title to the home he lived in, even though he has not paid on the mortgage since 1993. The lender was NatWest. Although the courts say this case is very rare the man claimed squatters rights and the court agreed. In 1993 the lender told the homeowner to pay £40, or about $80 at today’s rate, as part of negotiations. He did so and never heard from NatWest again – until recently. Observers say the man entered into negotiations with the lender, paid the small amount, and waited.
Lord Justice Mummery, sitting with Lord Justice Hughes and Mr Justice David Richards, said it was now too late for the bank, which had appealed against the original decision, to take action. He added its right to enforce the mortgage had expired because legal proceedings against Mr Djabar Babai and his wife Zinat had not been taken within 12 years. So much for the typical 90 period before forclosure often seen in the United States. Foreclosure is called repossession in the UK. With a rash of foreclosures in the US there could be a possibility that someone’s negotiations could go in to suspended animation for a number of years. We should call it the Babai syndrome.