Thousands of homeowners face home repossession year after year. According to the Council of Mortgage Lenders, the number of repossessed homes in the UK in the second quarter of 2011 fell by 7% compared to the same time last year. However, the number of mortgages in areas have increased, thus the forecasted number of home repossessions for the next two years is expected to fall between 40,000 and 45,000.
Avoid Home Repossession
Because of the current economic turmoil that the whole world is facing, more and more people are losing their jobs and are facing financial instability. Thus, affected homeowners face home repossession due to their failure to settle mortgage payments and arrears. If you are facing home repossession, there are steps that could be taken in order to avoid, or at the very least, delay it.
The most obvious way to avoid home repossession is to make payments on time. If in case there will be missed payments, it would be best to let the lender know about your current financial situation and the possible date as to when the debts will be settled. Some lenders may agree for a payment extension, however, the homeowner should make sure to settle the arrears on the agreed date. Some lenders may offer a repayment plan, such as spreading out missed payments over a longer time. Some lenders allow refinancing, wherein the loan balanced may be increased to pay off current arrears. Alternatively, the homeowner may apply for government loans to cover for the missed payments.
Stop Home Repossession
If the homeowner is not able to settle the arrears after 3 months and no agreement has been arranged, the lender will send a demand letter requesting full payment of the arrears. If the homeowner is still not able to respond to this demand, legal proceedings will follow. During this time, there are still a few things that can be done to stop home repossession.
First, consider selling your home. It is best to contact a trusty real estate agent for advice of the current market value of the home as well as the average number of days the property will be on market to sell the home. Real estate agents will also have great connections to possible buyers. Additionally, selling your home may require a few home improvements so that it could be sold for a higher value.
Next, consider a short or quick sale. A short sale involves selling the home for less than the total balance owned on its mortgage. However, the lender must agree to the short sale and the homeowner may not be fully relieved of his obligations to the lender. The homeowner’s credit rating will still be affected with a short sale. Lastly, the homeowner can still appeal to the lender and the court (if court proceedings have begun) for a special arrangement. If the homeowner can demonstrate that they can repay their current mortgage and can make an arrangement regarding the arrears, the lender may agree to this and stop the foreclosure or repossession proceedings. Alternatively, if the homeowner has suddenly changed in financial status and is able to repay current mortgages and arrears, the foreclosure proceedings can also be stopped.
Stopping home repossession requires patience and resourcefulness. One should not lose hope and exhaust all possible efforts in order to stop home repossession.
- Stop Your Home Being Repossessed
- What Is Home Repossession?
- Selling Or Remortgaging Your Home Before Repossession
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- What is Property Repossession