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Is Your Home Being Repossessed?

If arrears on your home keep increasing over the months, your lender may make an application to the courts to take out a repossession order. Lenders vary in the time they allow the borrower to catch up, with some taking out repossession orders just six months after the first instance of arrears, although most will allow a longer period before they take legal action.

There is a protocol which involves a series of steps that mortgage lenders have to follow before court action can be taken. The lender must provide you with clear information about the arrears amounts and interest charges, discuss the matter with you and take into account any requests you may have; for example, altering the date of monthly payments. They must also give you notice of when court action will begin in the case of you having missed payments under an existing or previous agreement.

In the event of the case ending up in the courts, the judge will take into account your lender’s adherence to this protocol, and the case outcome could well be affected by this. Even after the lender has initiated proceedings, it can take up to another 75 days before the court is in the position to listen to the lender’s request.

Fourteen days before the court hearing, the lender will write to the homeowner to inform them that the proceedings have begun, and at the subsequent repossession hearing the judge will listen to both the claims of the lender and the borrower’s offers for making a deal to sort out the arrears. By this point most property owners will have retained the services of a solicitor such as Duncan Lewis to represent them in court.

At the hearing the case may be dismissed or postponed, or adjourned, and you may be allowed to remain in your home whilst you stick to the terms of the agreement for paying off the arrears. This is referred to as a ‘suspended possession order’. Alternatively, it may be that an order is made out for you to vacate the property, which is an ‘outright possession order’. This order may or may not also specify that you must pay back the arrears, referred to as the ‘money judgment’.

Having outlined the worst case scenario of the outright possession order, it is worth noting that in the vast majority of cases the borrower is able to come to some sort of an arrangement with the lender for paying back the arrears and remaining in the property. It is never too late, within reason, to attempt to reach an agreement. Most county courts are now provided with government-funded desks that give free representation at these hearings, and which are designed to promote mutual agreement between the parties in repossession hearings. These are invaluable in reducing the number of immediate repossessions.

It is also worth noting that evictions do not necessarily follow on from the issue of repossession orders. Many borrowers pre-empt eviction by selling their properties, and generally speaking repossession is the extreme and final step and is only taken if there is no way for the borrower to rectify the situation. Housing solicitors will be pleased to offer help and advice if you have been issued a repossession order.