Stop Repossession

What is the repossession process?

Repossession is a legal process that occurs when a lender obtains a court order to take possession of a property due to non payment of the mortgage. The initial repossession correspondence is usually in the form of a letter reminding you that you have missed payments. It will request you to contact the lender to discuss the mortgage situation and discuss when you intend to catch up on arrears. As a result, the owners home could be at risk unless they are able to make huge savings in other areas - which is unlikely given the fact that tax, utility and credit card bills are on the rise.

If the owners lender is not satisfied with their proposals, or if their debt and arrears situation gets worse, they will probably write to the owner again. Lenders will then apply to the court for a possession order to allow them to take over the property. As a home owner, you can only be evicted if your lender or freeholder has a legal reason (grounds) and the correct procedure is followed. Repossession doesn't happen automatically. It may be possible to stop the repossession process at any stage. If there is no way you could be able to make the payments, the repossession order will go through and you will be given a date for which you will be requested to vacate the property.

The majority of mortgage lenders believe that the number of repossessions in the UK will increase over the course of this year, according to a new study.

Property Repossession

When it comes to property repossession banks, building societies and other lenders are, now more than ever, only interested in one thing - getting their money back! The truth is lenders simply don’t care about the selling profit, escalating debt of property owners or the hardened economic climate. What’s worse, property repossession often leaves home owners with remaining debt. Once banks have repossessed property (often spelt “reposed property" by mistake), they usually sell it for whatever they can get. In some cases – when the bank fails to recover enough money to pay off the entire mortgage, as well as its interest and fees - the insolvent homeowner is left with mounting interest and debt even after the sale. For obvious reasons, homeowners should try to avoid property repossession at all costs.

Avoiding Repossession

Many people find that they are in the position of having to avoid repossession. Unfortunately these days, things are economically a lot more uncertain than they once were with mounting credit debt and the possibility of redundancy and unemployment. Most people find saving for such a rainy day difficult, so most of their money tends to become tied up in their property, so when you consider this, you can easily see how you can fall behind on your mortgage payments and find yourself in a situation of having to avoid repossession. We all hit hard financial circumstances sometimes: losing a job, perhaps getting a divorce, bereavement or long-term illness can all affect your ability to keep your mortgage current. Mortgage lenders are sympathetic for a while, but they will only accept so many late or missing payments before they are looking to get something back for their investment and you are in a position of needing to avoid repossession. A simple online search will show you many property buying companies that will buy your house and thus help you avoid repossession which anyone will know is a distressing and embarrassing situation.

Advice on Repossession

Lenders can take legal action to get back the money you owe them, and freeholders can also take you to court if you break one of the conditions of your lease so it’s very important to get the correct advice on repossession. In either situation, it may be possible to avoid going to court. It is very important to be cautious and always get independent advice before you make any decisions. As a home owner, you can only be evicted if your lender or freeholder can prove a legal reason and the correct procedure is followed. Repossession doesn't happen automatically. It may be possible to stop the process at any stage if the correct advice on repossession is followed.

If you have not been able to stop your lender or freeholder from starting court action, it doesn't necessarily mean that you will lose your home. It's still worth trying to negotiate a solution before the hearing. If this isn't possible, the court will listen to both sides and will decide what should happen to your home. You should get advice on repossession before the case goes to court. The options that may be available may depend on the reasons why you have been threatened with repossession. An adviser can explain your options and whether the court is likely to allow you to stay in your home.

Repossession Orders

Unless you are a very unusual person, appearing in court to defend a Repossession Order is a difficult experience. You will feel you are going into a world that you know nothing about with a group of people who know all the rules. In fact, the last thing the judge or the Mortgage Lender will want to do is to grant an order (repossession order) to repossess your house.

The Mortgage Lender will often say that they accept the offer but that they just wanted to ensure it was paid by taking it to court - this could be regarded as a waste of the court's time but it's used when unofficial plans have been set up and broken by the borrower before. Although the Repossession Order will be granted, it will be suspended if you make the payments.

The only way repossession will happen is if you have no hope of repaying your arrears or you have been to court before and proposed a deal and then failed to keep to it - and now you have no other deal to offer. This situation shows one of two things - you really do have no hope of paying the arrears or you did not prepare your offer carefully enough.