What happens after house repossession?

Mortgage Payment Arrears: How Long Do You Have?

Naturally, if you have been affected by repossession of your home, you might be wondering what will happen next. Repossession for non-payment of a mortgage is, unfortunately, an unsettling event for individuals and families alike.

Although various factors can lead to the repossession of a residential property, the most common cause is mortgage arrears – in other words, failing to make regular repayments. According to published statistics, more than 7,800 homes were subject to possession orders in England and Wales during 2018. Significantly, the North West and North East, including Yorkshire and Humber, saw the highest incidences of foreclosure.

On a more positive note, repossessed homes accounted for less than one per cent of those sold during the same year. To discover more what happens following property repossession, read on. Below, we explain lenders’ legal duties, additional costs and legacy debts.

Legal Duty: Lenders

After a minimum of ninety days, mortgage payment arrears mean the lender has the right to repossess the property. Nonetheless, some lenders allow longer than this minimum. If the default in monthly payments continues and the lender gains court approval to take possession of the property, they must sell it for the best possible price and within a reasonable timescale. Usually, therefore, most repossessed homes tend to go on sale relatively quickly.

Additional Costs

Additionally, lenders often pass on costs such as court fees, depending on the mortgage loan contract. Once a court makes a possession order, the payment of monthly mortgage instalments usually ceases.

Rather than fix the asking price itself, the bank, building society or other financial institution will probably take expert advice from a local valuation service. While some properties sell through the usual estate agency channels, others go to auction. Typically, lenders might choose to auction property to achieve a quick sale.

Responsibility for taking care of the property passes to the lender that has taken possession until they sell it to a new purchaser. However, although lenders have to pay for basic maintenance and essential or emergency repairs during this time, they are entitled to pass the cost on to the mortgagor, i.e. the previous owner-occupier. If they do recharge in this way, they add the sum(s) to the mortgage account.

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After the Sale

After selling the property concerned, any money remaining after settling the mortgage loan, fees and selling expenses is repayable to the borrower. Lenders have to notify customers of such entitlements, except when it is not possible to contact them. If a lender does not have the new address, for instance, they or a court will hold the money until they can contact the ex owner-occupier and return the balance.

After repossession, debt problems do not necessarily go away. Notably, depending on the sale price – along with any additional charges and interest – the proceeds might not be enough to settle the mortgage. In some cases, an outstanding balance might remain due. If so, the lender has to notify the borrower. Whether the lender pursues the borrower for the remaining balance or not will depend on the company policy and the circumstances.

Six-Year Limit

Sometimes, lenders may decide not to pursue payment. However, should they decide to do so, they must inform the borrower within a maximum of six years.

Finally, if the lender decides to use another company or a debt collection agency to attempt to recover the amount due, they must notify the debtor. Assuming that the mortgage lender has the new address details, they must also send out statements that itemise any further interest charges.

We help save your home by stopping your eviction, helping you clear your arrears negotiating with your lender.

What people have to say about Home Owner Management Services

I was at a total loss at what to do with my situation, having been a mortgage broker, I was convinced I had the ability to talk to my lender and negotiate however; nothing I could offer was good enough!

They explained the process to stop the eviction and when it all came together it was like a case of De Ja Vu, it went EXACTLY as they said it would. They got me enough time to save up my deposit to go and rent, and I just let the lender have the house because I had negative equity anyway.

I am now back to a comfortable state of living and have no stresses anymore. I didn’t have to borrow any money from anybody because I didn’t have to pay the mortgage while I was saving up for my rent.

The best part was having the ability to remove my belongings at my own pace, and it not being done for me! I didn’t need to arrange storage or anything. I cant begin to express how grateful I really am!

Mr L

Thank you so much for your help. We can now keep our home for the long term. We now have to pay our Lender a monthly payment we can finally afford after a year of turmoil. The hardest thing was unpacking all the boxes we had already packed because we thought there was no hope.

Everything you did for us was so quick and professional, our home was saved before we knew it, it took some time to sink in, but they really did achieve what we thought was impossible. In less than 24 hours of phoning them the eviction order was cancelled.

With the weight off our shoulders we can concentrate on living again and earning the money we need to pay the mortgage without living in fear of the Bailiff knocking on the door with an eviction order!

Mr & Mrs J W

I really had my head in the clouds as I believed I now had no where to turn. I had already made my appointment with the council to assess me for emergency housing. However my council said they could only find me a hostel to stay in. 1 call to Aggressive Lender Solutions and I no longer had a problem.

They resolved the Eviction order in a matter of days, giving me every confidence that they could achieve it, every step of the way. I don’t know where Id be if they didn’t help.

Mr B

I really can’t thank you guys enough. I was certainly headed for another breakdown, however, the sheer weight of your support saved me from despair and I am sat at home nice and  warm, in familiar surroundings thanks to you.

I can’t believe, looking back, how much time I wasted trying to convince the lender to let me stay, so many documents and offers, my only regret is honestly not phoning you sooner.

Mrs M

It is never too late to contact us, even if your eviction is only an hour away. Call 0800 298 0571