Repossession is a very real concern for many homeowners at the moment due to the current economic climate. However, the process of repossession is quite lengthy which most people are not aware of, therefore we have put together this guide to help people understand the process in more detail.
There are 7 main steps in the repossession process; it can take quite a long time to go through the process and throughout there is a chance for you to come to an agreement with the mortgage lender to stop repossession.
1. Letter From The Lender
If you miss a mortgage payment, you will receive a letter from your lender detailing this and the fact that you need to make up the money owed. If you fail to contact your lender after this letter, you will receive another letter reminding you of your arrears and warning you of the possibility of court action in the event that this letter is ignored or you are unable to pay.
2. Lender Applies To Country Court For Possession Order
The lender cannot carry on the processes of repossession without this order; in order to obtain it they must write to the County Court and give justification as to why the judge should return the house into the possession of the lender.
3. Court Writes To You Telling The Hearing Date
This correspondence will se out the court hearing date and enclosed with it will be the particular of the claim and a defence form for you to complete and return. It is imperative that you reply to this letter.
At this point it is a good idea to seek advice from a solicitor or housing advisor; it is also worth noting that if you have a low income or are on benefits you may qualify for legal aid.
4. Judge Hears The Repossession Case
The judge will hear both sides of the case in a County Court – both yours and the lenders; they will then make a decision on the course of action based upon these cases. There are four main outcomes that can occur:
Repossession – The judge could rule that the lender is to repossess the home, meaning that you will have lost the case and will need to move out.
Suspended Possession Order – This will allow you to stay in the property as long as you make an arrangement with the lender to pay the outstanding arrears.
Adjourn Case – This means that the case is postponed until a later date. The judge may issue you and your lender with steps to take to try and amend the situation before the next hearing.
Dismiss Repossession Case – In this instance, you will have won the right to remain in your home.
5. Court Makes Order For Repossession
If the outcome of the court hearing is repossession, then you will be given a date that you will need to vacate your premises by. This is usually 28 days after the hearing however, longer or shorter timescales can be negotiated.
6. Bailiffs Sent In
If you fail to leave the premises by the date stipulated by the judge, then the lender will apply for a Bailiff Warrant, allowing them to write to you and inform you of when the bailiffs will be attending to personally remove you from the premises if necessary.
7. Mortgage Lender Sells Home
Finally, the mortgage lender will sell your home; please note that until the house is sold, you will be responsible for paying the interest on the mortgage amount owed. After the house is sold, the lender will take the amount that is owed to them from the money raised from the sale of the home; if it is more than they are owed, then you will be given the remainder, however if it is less, you will be responsible for paying the remainder of the deficit.
One way in which to avoid repossession completely is to sell your home quickly before the lender has a chance to repossess it, therefore you will be able to repay your mortgage deficit and not incur a CCJ against you. This is a favourable option for most people in this position.