Property Repossession – What Happens?

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.

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