Repossession

The loss of the family home remains one of the most distressing situations we face. The Council of Mortgage Lenders most recent forecast anticipated that there would be a total of 37,000 repossessions in 2014.

When can repossession happen?

If you are a homeowner, you can only be evicted if your lender or freeholder has a legal reason and the correct procedure is followed. Repossession doesn’t happen automatically. It may be possible to stop the eviction at any stage in the process.

You could become homeless if you can’t keep up your mortgage repayments. If you ignore the problem, it will become more difficult to control your debt and avoid repossession.

Outline of repossession procedure

You can only be evicted if the court makes an order telling you to leave. You won’t automatically lose your home because your lender starts the eviction process. The process can be stopped at any stage, so it is important to keep negotiating with your lender or freeholder. If you are in arrears, you should try to pay as much as you can on a regular basis.

Preventing repossession

Your lender can take you to court if you don’t pay your mortgage or any other loan secured on your home. Your freeholder can also take you to court if you break one of the conditions of your lease, but this is very unusual. It may be possible to avoid going to court.

Mortgage arrears

Most lenders will only repossess your home as a last resort if you are having problems paying your mortgage. Lenders usually prefer to sort out your payment problems in other ways. Your options will depend on:

what type of mortgage you have
how far behind you are with payments
the reasons for your arrears.

Don’t ignore your lender’s letters or phone calls. It is always advisable to keep in touch with your lender. If you are having difficulty with your mortgage payments check the link to the Mortgage Support section of this website.

Letters from your lender

Your lender will usually send you a letter reminding you that you have missed one or two payments. The letter will normally ask you to:

confirm how you are going to catch up on your missed payments, or
contact your lender to discuss your situation.

Your lender will probably write to you again if:

your proposals aren’t satisfactory, or
your arrears increase.

The second letter usually says that solicitors will get involved if you don’t:

clear your arrears within seven days, or
contact your lender to discuss the situation within seven days.

It is better to negotiate with your lender before solicitors are involved. It would be advisable to get professional advice before negotiating with your lender.

Letters from your lender’s solicitor

The solicitor will send you a letter giving you seven days to pay off all your arrears or make a proposal for doing so. The solicitor can start court action without any further warning if they are not satisfied with your response. Still try to negotiate at this stage. The court is more likely to be sympathetic if you made an effort to sort things out before legal action began even if you can’t come to an agreement.

Disagreements with your freeholder

It’s very rare for a freeholder to evict a leaseholder. This can only happen if:

you break one of the conditions of your lease and
your lease has a clause that says that it can be ended.

The legal action will stop automatically if you can put the problem right. For example, by paying off what you owe. Try to do this before the freeholder applies for a court hearing. You will avoid the legal costs involved, which can be expensive. Get advice immediately if your freeholder threatens you with repossession.

If your freeholder tries to evict you without following the correct procedure, it may be a criminal offence.

If the case goes to court

You won’t automatically lose your home if your lender or freeholder has started court action. Try 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.

Get advice as soon as possible if you are threatened with repossession. An adviser may be able to help you to negotiate with your lender or freeholder and avoid the time and expense of going to court. It’s usually possible to prevent arrears or disagreements from becoming a major problem that leads to repossession. Seek advice from one of the agencies listed in the useful websites.

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