Archive for the ‘What Is Home Repossession’ Category

What Is Home Repossession?

Friday, May 1st, 2009



“Your home may be repossessed if you do not pay your mortgage or other loans secured on it.”

The repossession of homes is becoming a more and more frequent occurrence particularly in the UK as a result of the credit crunch. A property is usually repossessed when an owner is unable to make mortgage repayments and falls into arrears with the mortgage lender, and as a result their home is repossessed via a court order. Having your home repossessed can be an awful ordeal particularly when it has occurred as a result of circumstances which you are unable to control.
Home repossession occurs when a mortgage lender, usually a bank or building soceity, decides that the loan which has been lent to a borrower or owner of a property can no longer be recouped by reasonable means. This results in the mortgage lender applying to the courts for the issuing of a repossession order and following this is an eviction order.

What happens during the whole repossession process is explained below:

1. Failure to Make Repayments
Due to a variety of circumstances homeowners often find themselves being unable to make repayments on a mortgage. In the majority of cases a mortgage lender will allow 2 payments to be missed before taking further action. The lender will contact you via telephone or mail in order to try and recover missed payments. If you are in this situation speaking to the mortgage lender and arriving at some arrangement for further repayments would be the best step to avoid repossession of your home. Lenders will always consider repossession when there is no alternative so trying to negotiate a solution to the problem is always the best option.

2. Possession Order
Possession hearings are relatively informal. The judge will look at the documents in support of the claim and ask the claimant’s representative to confirm the latest figures on the account. The judge will then consider what order to make. The basic possession order gives the mortgage company the right to repossess the property 28 days after the hearing but the judge can make different orders.
A possession order is when a lender approaches the court for a possession order as:
a) a homeowner has made no attempt to contact the mortgage company with regards to arrears on their account.
b) the lender cannot reasonably expect the homeowner to make repayments because of finance problems or bankruptcy.

When a mortgage company or lender makes a possession order, the borrower or property owner will be required to appear before a magistrate of the courts along with a representative of the mortgage lender. Upon appearing before a judge, the homeowner is provided with the opportunity to appeal for lower repayments as long as they can prove that the income which they are receiving is low enough to justify the amount they are offering to pay.
At this point the representative of the lender can decide whether or not to agree to the terms which are put forward by the borrower. If the repayment is thought to be sufficient, the lender will often agree to a new repayment structure rather than carry out a repossession. The judge can overrule the decision of the mortgage company if he or she feels that the homeowner will be able to make the repayments of the arrears on the mortgage account. If the judge decides to go down this route they will issue a Suspended Possession Order.

3. Suspended Possession Order
When a homeowner appears before a judge in court, the judge may decide to issue a Suspended Possession order. If the homeowner can prove that they will be able to make further repayments on this property, the judge may agree to giving them more time to make repayments or even a temporary new repayment structure to clear the arrears.
If the terms of the Suspended Possession Order are not adhered to ie. if repayments are not made as agreed, the mortgage lender can restart the proceeding of repossessing the home. This will result in the lender applying to the courts for an eviction notice. When a homeowner misses their repayments, a judge is likely to go ahead and issue an eviction order so it’s very important to stick to the payments agreed within the suspended repossession order.

4. Eviction Order
The final part of a property repossession is an eviction order.  When an eviction order is issued by the magistrate, it will specify the date on which the homeowner will be required to leave the property. Bailiffs will arrive if the premises are not vacated by the specified date. They will remove you from the property. It is important to note that obstructing a court appointed officer is regarded as a criminal offense and it is not recommended. If the property has not been evicted by the specified date, then the bailiffs will remove the homewoner from the property and with only what few belongings they can carry. There will be an opportunity to collect the remainder of the belongings on a further specified date in the company of a court appointed officer. Following the eviction and removal of all belongings from the home, property repossession is complete. Repossession properties are then sent to auction. But could this repossession property have been avoided in the first place. Click for info on how to avoid home repossession in the first instance.

Tags: , , , , , , , ,
Posted in What Is Home Repossession | 1 Comment »

Repossessed Homes: What Happens in Property Repossession?

Sunday, September 27th, 2009



Property repossession and the number of repossessed homes is on the increase in this time of recession. This guide is intended to help you understand the stages of repossession, why it takes place and the things that you can do if you are faced with this issue.

If you are currently paying a mortgage on your property and are falling into arrears, your lender has the right to start repossession proceedings. The terms of your mortgage contract will state this. Normally a lender has the right to start repossession after 2 months of arrears, but most lending organisatons will work with you to try and clear the arrears and thereby avoid legal action against you. The best thing is to keep talking to your lender and update them on your current situation. If you are unable to keep up repayments or your lender is not satisfied with your proposals then the lender will take legal action by going through the local county court. This is done so that they can take control of the property and gives them the right to sell the property and recover the outstanding balance on the mortgage.

In the first instance you will receive letters from your lending organisations debt collections department as well as telephone calls to try to collect missed payments. As stated above always keep the lender informed of circumstances and attempt to come to a mutual agreement to clear the debt over time. If your account remains unpaid for 4-6 months or more, the your account will be referred for legal action to a firm of solicitors. They will probably write to you demanding that you pay the arrears in full or warning you that you will face repossession of your property if the arrears are not cleared and the account is not brought up to date. Always contact the solicitors and propose a mutual contract agreement or arrangement to clear the arrears.

Proceedings to start repossession will typically begin after 6 or more months of arrears and with the solicitors representing the lending organisation issuing repossession proceedings through the local county court. A hearing date will be set by the court and its advisable that you attend. It is important that you have all your documentation concerning your mortgage account and your account history as part of your preparation for the hearing.

At the court the person presiding over the hearing (usually a judge) can decide whether to do a number of things:
1)Adjourn the hearing – You will receive a new hearing at this stage and this usually happens in the case of absence or the requirement of more information.
2)Indefinite Adjournment or Dismissal – this normally occurs if full payment of the arrears have been made.
3)Order for Possession – This order will give the lender the right to possess your property after a period of 28 days. Even at this stage there are options for you to take in order to sell your house quickly.
4)Suspended Possession Order– in this case the order is suspended following the payment of the current installment and a mutually agreed amount towards the arrears.

The final option is a favourable position for all parties as it gives you a further chance to clear the arrears and gives the lender some security that payments will be made. However, if you default on the payment or the agreement the lender has the right to seek possession of the property by way of a possession warrant or notice of eviction.

A notice of eviction or possession warrant is occurs if you fail to meet the criteria of the suspended possession order or if you are still occupying your property after the time frame for order of possession has lapsed. In this case the lender will apply to the courts to have you formally evicted. The court will send you a date and time at which you must leave the property. A bailiff of the court will attend your property accompanied by a representative of the lender as well as a locksmith. They will come with the intention of taking formal possession of the property. Even at this stage avoiding property repossession is not too late.

Tags: ,
Posted in What Is Home Repossession | No Comments »

Court Hearings

Saturday, May 2nd, 2009



At the time of a repossession hearing you can often expect a wait. Many home possession hearings are often dealt with by the courts on the same day with each case being allocated 5 minutes. This often runs over and as a result cases will be dealt with later than the scheduled time. This is not however an excuse to appear late, you are advised to turn up a minimum of 15 minutes before your hearing. Judges will not wait for cases, so if a borrower is not present at the relevant time, the possession order will be granted anyway.  If you are required to attend a repossession hearing and are running late, you should telephone the court and inform them so if there is a valid reason the case can be rescheduled.

Documents to Bring to Court
When attending a repossession case in court you are advised to being any supporting documents which may assist your case. Depending on teh cirucmstances, these might include:
·    Evidence of income and expenditure – pay slips, invoices, proof of benefits etc. This could result in the granting of a suspended possession order.
·    Letters from a borrower’s solicitor to prove that a sale is in progress, estate agent’s details. In this situation the magistrate will provide the borrower time to sell.
·    Proof of mortgage offer, evidence of re-mortgage application. Evidence provided will result in the courts giving you time to remortgage.

The Lender’s Solicitor
The solicitor or representative of the mortgage company or borrower will also be present at any court hearing. Before meeting with the judge they will meet you to discuss any possible way an agreement can be reached. Even at this stage many property repossessions are avoided.

The Hearing

Repossession hearings are generally informal affairs. They are often held in a small meeting room in a court. Whilst speaking to the judge, everybody remians seated and the the judge is addressed as Sir or Madam. Public entry is not permitted, only legal parties of the representatives are able to enter with the borrower and lender.
The judge will be provided with figures of the account on the particular repossession property. The lender’s representative will also provide any other documents to act as a support in the case for repossession. This may include a copy of the Mortgage Deed and copies of the details held by the Land Registry showing that the property is owned by the homeowner and has been mortgaged to the lender. The lender’s representative will also inform the judge if any agreement has been reached by the two parties involved.
The homeowner will then be given the opportunity to explain their side of the matter to the judge. You should remember that there are time constraints and some judges are also impatient. You should keep things concise and be prepared to explain what you intend to do. Borrowers should try to focus on:
·    why they were unable to make their mortgage repayments.
·    how they propose to clear the arrears or what they will do about them.
·    documents or evidence which will show they will be able to carry out what they are proposing eg. evidence of a remortgage, evidence of being able to make payments.

Suspended Possession Orders
If the judge on the day decided on issuaing a suspended possession order, the borrower should take special care to make repayments and avoid an eviction. They should budget accordingly.

Adjournments
There are several reasons why a judge might adjourn a mortgage possession case:
·    The lender has not provided the correct documents or there is a dispute about the level of the arrears. The judge might adjourn to a future date for the correct documents or a full statement of account to be provided.
·    The lender has made a payment which either clears the arrears or reduces them to below the level entitling the lender to a possession order. The judge will “adjourn generally with liberty to restore” –this means that the lender can ask for another hearing if the arrears build up again.
·    Occasionally if the arrears are low, or have already been significantly reduced by regular payments, the judge may say that the case will be adjourned for as long as payments continue. If payments are not maintained the lender can ask for another hearing.
·    If it appears that the borrower may have a defence, (rare in mortgage cases,) the judge will adjourn so that both sides can produce more evidence.

The Borrower’s Day in Court
Surprisingly, the majority of borrowers do not go to court for their possession case.
The hearing is a borrower’s chance to convince a judge not to make a possession order. Most judges do not want to make people homeless and will do what they can to prevent the lender from repossessing. However, if the borrower is not there, the judge is likely to rely on what the lender says. Unless an agreement has been reached, a 28-day possession order is almost inevitable.

Tags: , , , , , , , , ,
Posted in What Is Home Repossession | No Comments »

What Can Be Done After Your Home Has Been Repossessed?

Saturday, May 2nd, 2009



In certain cases it is possible to still negotiate with a lender once a property has been repossessed by the court bailiff. Lenders sometimes agree to terms which allow a borrower to go back into the repossessed home. However, as the property repossession has been completed, the mortgage company is not obligated to listen to any proposal. The best way that a homeowner can regain access to their house is to carry out a large payment in a lump sum. If you are in this situation, being able to raise a lump sum can often make a lender change their decision. Once a repossession has been completed, the lender will receive the case again and begin the process of finding a new buyer. The repossession houses are often sent to auctioneers in order to get a quick sale.

Retrieving Belongings
If the property has not been evicted by the specified date, then the bailiffs will remove the homeowner from the property and with only what few belongings they can carry. There will be an opportunity to collect the remainder of the belongings on a further specified date in the company of a court appointed officer.

Tags: , , , , , , , , ,
Posted in What Is Home Repossession | No Comments »