Repossessions- What you Need to Know

When you buy a home, it’s important to understand that it still doesn’t fully belong to you until your mortgage is completely paid off. This means that if you’re unable to make your payments on time your mortgage lender has the right to evict you for not upholding your end of the contract. This process is known as repossession.

Once the lender has repossessed your home they will sell it to recoup their losses- and if it sells for less than the outstanding balance you’ll still be responsible for paying the difference. “This adds additional trauma to an already stressful situation, so it’s essential that you do everything you can to keep up with your monthly payments” says Wimbledon estate agent, Robert Holmes.

If you have found yourself in danger or repossession, here are the steps you should take.

  • Talk to your mortgage provider. Lenders will almost always prefer to find a mutually beneficial solution before going to court, so pick up the phone and have a conversation with them.
  • If the lender is willing to consider a new repayment plan, it must be agreed in writing. If they’re not, then they are legally required to inform you of their plans to repossess your property.
  • Seek professional help. Best Gapp advises, “It’s always advisable to talk to a solicitor if you can afford to do so, but if this isn’t the case there are plenty of charitable organisations who can advise you on the repossession process. Contact your local Citizen’s Advice Bureau, Shelter (0808 800 4444) or Civil Legal Advice (0345 3454 345)”
  • Consider a short term bridging loan. This is a highly effective way to stop repossession proceedings in their tracks by settling your mortgage arrears. Any outstanding debt will be transferred to the new finance company who will be able to liaise with your mortgage provider to further minimise the stress on you.
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The repossession process:

  • Miss one monthly repayment- your lender will contact you, and possibly impose a financial penalty.
  • Miss two monthly repayments- you will receive further letters and a formal warning about the repercussions of not keeping to your contract agreements. Do not ignore this letter– make contact even if you are unable to make your full payment as the lender may be willing to give you another month.
  • Miss three monthly repayments- your lender will now be legally permitted to begin legal proceedings against you and apply to repossess your home.
  • Before your lender begins legal proceedings against you, they are required by law to notify you in writing. They will also have to contact the local court and formally apply for the repossession of your property.
  • You will receive a date for your hearing from the court via letter. You will be provided with a defence form, which you must complete if you wish to challenge the repossession. It is essential to receive legal advice regarding this so you are aware of the full process and your rights.
  • At the hearing you will be allowed to make your case for staying in the property. The judge will listen to evidence from both parties before making a final ruling.
  • If you wish to settle the case out of court, it may be possible to negotiate with your lender’s solicitor.
  • If the judge rules that you must be evicted from your property, you will have between 28 and 56 days to make alternative arrangements. After this time, your property will be sold.

Andrew Reeves summarises “If you’re in danger of having your home repossessed it’s important to act fast. Burying your head in the sand will always lead to more trouble, so get on the phone as quickly as you can and access expert advice.”

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