Every year in the UK, approximately 100,000 UK householders face the threat of losing their home because of arrears in paying their mortgage. Unfortunately, after a few months of missed loan payments, lenders can trigger legal proceedings through the courts to attempt to gain possession of the mortgaged property.
Also called repossession proceedings, homeowners often feel worried by all the official paperwork and uncertain outcome. Fortunately, however, it may be possible to defend yourself and your family during this unsettling time. If you are a homeowner and concerned about mortgage repossession, read on for helpful advice and details of how to obtain dedicated expert assistance.
How to Stop Repossession
It is essential to understand how repossession works. An awareness of timescales and levels of arrears is essential, as well as where to get assistance. Also, a clear understanding of your rights and responsibilities is useful because it will help to formulate a plan to stop mortgage repossession.
Usually, lenders prefer to reach an agreement that works for the owner-occupier concerned as well as the financial organisation. Conversely, failing to respond to lenders’ letters (or responding inadequately) may result in a summons for you to attend a court hearing.
Do not panic; stay calm and contact our advice service at the earliest opportunity. Proceedings take weeks; the law obliges lenders to follow a detailed process before initiating any court action. A minimum notice period of fifteen days applies to any notices served, such as court summons or orders.
Review your non-essential household expenditure and prepare a budget to see if you can make savings. If your circumstances have changed due to health or employment reasons, you might be entitled to state benefits. Eligibility depends on income, savings and any children in the family. There is also a Support for Mortgage Interest (SMI) scheme.
Talk to Your Lender
Talk to your lender and make a genuine attempt to reduce the outstanding debt during the typical three or six months’ leeway. After this time, lenders are more likely to apply for repossession. During discussions, therefore, ask about extending the mortgage term to reduce monthly payments to a more manageable level. That way, you might be able to reduce or even clear the debt.
If the current mortgage terms allow it, consider a payment holiday where you have a pause or reduction in payments for an agreed fixed period. Alternatively, try to arrange special terms or investigate remortgaging to a new deal that has lower monthly instalments. You might want to check the possibility of changing lenders to a more favourable agreement.
Prepare a feasible and realistic plan that the lender should accept. Making credible suggestions increases the possibility of the lender seeing things your way — and the court, if necessary. It is crucial, therefore, to gather all the relevant detail and facts. In this sense, expert advice can help to secure a positive outcome and prevent repossession.
Even if the case goes to court, continue efforts to agree on terms beforehand. Nonetheless, do be ready to turn up at court for a hearing if scheduled, so that you can participate in your defence and stop repossession.
In some cases, selling the property online or through estate agents may be a solution, especially if there is equity after settling the mortgage.
How to stop repossession
Facing Repossession is a very difficult time, if you do not seek the right advice that will help you stop your repossession then you could lose your home unnecessarily. We are here to provide a full assessment of your legally supported options, that your mortgage lender should have provided. More importantly, we can force a legally supported defence through the court so that you have a court order to follow and do not have to jump through the hoops your lender in no doubt trying to make you jump through now.
What happens if repossession is threatened?
When faced with a court hearing, it is best to seek prompt assistance. In any case, the judge will listen to both sides of the argument; the fact that a lender has applied for a repossession order does not mean that the court will automatically grant one. Professional representation is not always essential, though it may often be advisable or beneficial.
If you are unfortunate enough to be one of them then we can help.
Repossession Support & Guidance
If you are a homeowner and need support, we will guide you through your options to prevent repossession of your property with a free consultation. Our friendly, highly focused, team of experts will listen to your unique story and identify solutions for your specific circumstance. For over 10 years we have created a fantastic team that specialise in giving the best advice and help they can in order to stop repossession and to save homeowners from losing their property.
Some Repossession Facts and Myths
Thousand of apartments, flats and houses are subject to repossession proceedings every year, but many myths surround the subject.
Despite oft-heard rumours to the contrary, homes cannot be repossessed without warning. Homeowners who have mortgage arrears first receive a letter from the lender, after which there is usually an interval of some two to six months before any legal proceedings commence. Debt collection agencies cannot repossess properties, as only a court can grant such orders if the mortgage is on a residential basis.
Notably, it may be possible to stop repossession by negotiating with the bank or building society concerned and agreeing to:
- Pay off arrears over time.
- Refinance the property.
- Sell the property.
Caution is necessary; handing the keys to the property back to the lender will not end the matter. Mortgage lenders can still pursue debtors for up to twelve years in England and Wales and up to five years In Scotland if there is a shortfall after the property is sold.
Additionally, many Homeowners believe that if there is equity in the house, then the Lender will keep the proceeds from the sale. This is not the case, if there is a balance released after the house is sold, then it will be sent back to the Homeowner, however, it is going to be significantly reduced from what should be available if you sold the property for yourselves due to:
- The increased solicitors and court costs added to the mortgage.
- The Asset Management Company and estate agents costs for selling the property.
- The increased charges made by you Lender for coordinating the solicitors and Asset Management Company.
- The significant reduction in the sale price due to it being a repossessed property.
Of course, this does not even account for the time delay in the Lender selling your property and finalising your account and property title. Most Homeowners that are fortunate enough to get some money back, have to wait over 8 months, during which time, no assistance is available for being rehoused.