fbpx

The Process of House Repossession

House repossession is a legal process where the mortgage lender takes possession of a property for several reasons. For instance, the repossession may become necessary if a borrower cannot pay their mortgage arrears, defaults on a secured loan or goes bankrupt.

House repossession occurs often than we think, especially in the United States. Huge financial or economic crises may lead to a spike in the number of repossessed properties. For example, the 90’s Housing Crash and the 2008 recession both recorded higher repossession rates.

The high interest and unemployment rates all contributed to the all-time high repossessions recorded in the ’90s. Most borrowers could not keep up with the increased interests, forcing home prices to collapse and consumer spending power to reduce.

During the Recession of 2008, the economy experienced a devastating downturn. This came with an astonishing 92% increase in repossessions between 2007 and 2008. A house was repossessed every seven minutes in the final quarter of 2008.

If you are facing repossession the first thing you should do is seek advice, in some instances you may be eligible to obtain legal aid by checking the governments website at the following address: www.gov.uk/check-legal-aid

You can also get free advice from sources such as your local council, national Debtline, Shelter and Citizens Advice.

What are the steps involved in a home repossession process?

Mortgage repossession is not a walk in the park. The process can be complicated, especially if do not know how the process works.

Below are the steps involved in a home repossession process:

Step 1 – Notification of mortgage arrears.

It all starts with a notification from your lender about your mortgage arrears. The notification is the lender’s way of asking you to find a solution to the situation. The lender is essentially asking you how you plan to pay back these arrears.

If you are unsure of how to proceed, you can get debt advice. But before then, you should assess your income and expenditure, reprioritise your debts, and create a financial statement to understand your position.

In some cases, you may be able to work out a favourable repayment plan with your lender. This may include switching to an interest-only mortgage, adding the arrears to the mortgage, or taking a mortgage holiday. You can also sell an endowment or rent out your home.

However, if none of this is feasible, your ultimate move will be to sell your home, you probably won’t have the time available to sell your property on the open market but a quick house buying company like Sell My Home Now will be able to assist you with a quick house sale to prevent repossession. . But if any of the above suggestions do not work or your lender does not accept your proffered solution, you will get a warning of court action to start repossession.

Step 2 – Court action.

If your lender decides to start court action as a last resort, they will serve you with a list of all the payments you have missed, the total level of arrears, and the unpaid mortgage debt before applying to court.

Once you have these details, your mortgage lender can file a suit in court to request a repossession order. You need legal advice in this case, so get one.

Before it goes to court your mortgage lender must do the following:

  • tell you how much you owe
  • consider a request from you to change the way you pay your mortgage
  • respond to any offer of payment you make
  • give you reasons for turning down your offer of payment within 10 days
  • give you a reasonable amount of time to consider any proposal they make
  • give you 15 days’ written warning if they plan to start court action
  • tell you the date and time of a repossession hearing
  • let your council know within 5 days of getting notification of the date of the court hearing, in case you need to apply to the council as homeless

Step 3 – Receiving the court paperwork.

The court will send you multiple forms and letters. You should send them to your legal adviser compile them in a file. Such documents and letters include:

– Claim and defence forms
– Reactivation notice
– Notice of review
– Notice of possession hearing

You will be required to complete and return the defence form. While you may decide to handle this all on your own, we recommend that you seek legal advice to prepare for the hearing properly.

You can get a free ‘lay representative’ in most cases.

Step 4 – A judge hears the repossession case.

The case is subject to a judge’s review to see if it requires a full hearing. You are not expected to be in court on the review date, but you should be available for a phone call if there is a need for one. You will be informed of the review at least three weeks before the court date.

There will be a duty adviser on the ground on the review date, who may offer free legal advice over the phone and help you reach an agreement with your lender. If this does not work, then there will be a proper possession hearing.

Step 5 – Attending the repossession hearing.

A repossession hearing is an important step of the process; hence, you must attend. The court may interpret your absence as being unserious with the case and make an outright possession order. If you will be unavoidably absent, inform the court in advance and arrange a virtual attendance.

You can either hire a legal representative for this or work with the county court duty scheme adviser.

Step 6 – The court decides.

The court’s decision will be one of the following:

– a repossession order that allows the lender to sell the property to pay your debts.
– a suspended possession order that allows you to stay in your home but under specific repayment conditions.
– a dismissal or postponement of the case.

If you get a repossession order, you can work with your legal adviser to see if you can set it aside or change it to a suspended order.

Step 7 – Eviction

Suppose the court ordered a repossession and the date for repossession has passed, or the court ordered a suspension, and you disregard any of the conditions. In that case, your lender can ask bailiffs to carry out an eviction. They only need an eviction warrant from the court and a notice to your home 14 days before the eviction date.

Step 8 – The lender puts your home in the market.

After the eviction, the lender will sell your home and deduct their money. You will get the leftover (if any). Sometimes, your debt may be more than the selling price. In that case, you will need to pay off the mortgage shortfall.

How long does it take to complete a house repossession?

The time a house repossession takes depend on your communication with your mortgage lender and how fast the court is with the proceedings. If there is proper communication between you and your lender, it may take up to 12 months. Otherwise, the whole repossession process may be concluded in 5-6 months.

Finally…

Getting a notice of a possible home repossession from your lender doesn’t always spend doom. In most cases, you can prevent your home from being repossessed if you have experts’ guidance. At Sell My Home Now, we understand how difficult repossession can be for homeowners. We can stop the repossession process today, if you would like to find out more give one of our friendly team members a call on 0800 644 5311.

We are always happy to speak to you about your situation and offer our assistance.

If you would like to sign up to our newsletter please enter your email below

The Process of House Repossession

House repossession is a legal process where the mortgage lender takes possession of a property for several reasons. For instance, repossession may become necessary if a borrower cannot pay their mortgage arrears, defaults on a secured loan or goes bankrupt.

House repossession occurs often than we think, especially in the United States. Huge financial or economic crises may lead to a spike in the number of repossessed properties. For example, the 90’s Housing Crash and the 2008 recession both recorded higher repossession rates.

The high interest and unemployment rates all contributed to the all-time high repossessions recorded in the ’90s. Most borrowers could not keep up with the increased interest rates, forcing home prices to collapse.

During the Recession of 2008, the economy experienced a devastating downturn. This came with an astonishing 92% increase in repossessions between 2007 and 2008. A house was repossessed every seven minutes in the final quarter of 2008.

If you are facing repossession the first thing you should do is seek advice, in some instances, you may be eligible to obtain legal aid by checking the government’s website at the following address: www.gov.uk/check-legal-aid

You can also get free advice from sources such as your local council, national Debtline, Shelter and Citizens Advice.

What are the steps involved in a home repossession process?

Mortgage repossession is not a walk in the park. The process can be complicated, especially if do not know how the process works.

Below are the steps involved in a home repossession process:

Step 1 – Notification of mortgage arrears.

It all starts with a notification from your lender about your mortgage arrears. The notification is the lender’s way of asking you to find a solution to the situation. The lender is essentially asking you how you plan to pay back these arrears.

If you are unsure of how to proceed, you can get debt advice. But before then, you should assess your income and expenditure, reprioritise your debts, and create a financial statement to understand your position.

In some cases, you may be able to work out a favourable repayment plan with your lender. This may include switching to an interest-only mortgage, adding the arrears to the mortgage, or taking a mortgage holiday. You can also sell an endowment or rent out your home.

However, if none of this is feasible, your ultimate move will be to sell your home, you probably won’t have the time available to sell your property on the open market but a quick house buying company like Sell My Home Now will be able to assist you with a quick house sale to prevent repossession. . But if any of the above suggestions do not work or your lender does not accept your proffered solution, you will get a warning of court action to start repossession.

Step 2 – Court action.

If your lender decides to start court action as a last resort, they will serve you with a list of all the payments you have missed, the total level of arrears, and the unpaid mortgage debt before applying to court.

Once you have these details, your mortgage lender can file a suit in court to request a repossession order. You need legal advice in this case, so get one.

Before it goes to court your mortgage lender must do the following:

  • tell you how much you owe
  • consider a request from you to change the way you pay your mortgage
  • respond to any offer of payment you make
  • give you reasons for turning down your offer of payment within 10 days
  • give you a reasonable amount of time to consider any proposal they make
  • give you 15 days’ written warning if they plan to start court action
  • tell you the date and time of a repossession hearing
  • let your council know within 5 days of getting notification of the date of the court hearing, in case you need to apply to the council as homeless

Step 3 – Receiving the court paperwork.

The court will send you multiple forms and letters. You should send them to your legal adviser compile them in a file. Such documents and letters include:

– Claim and defence forms
– Reactivation notice
– Notice of review
– Notice of possession hearing

You will be required to complete and return the defence form. While you may decide to handle this all on your own, we recommend that you seek legal advice to prepare for the hearing properly.

You can get a free ‘lay representative’ in most cases.

Step 4 – A judge hears the repossession case.

The case is subject to a judge’s review to see if it requires a full hearing. You are not expected to be in court on the review date, but you should be available for a phone call if there is a need for one. You will be informed of the review at least three weeks before the court date.

There will be a duty adviser on the ground on the review date, who may offer free legal advice over the phone and help you reach an agreement with your lender. If this does not work, then there will be a proper possession hearing.

Step 5 – Attending the repossession hearing.

A repossession hearing is an important step of the process; hence, you must attend. The court may interpret your absence as being unserious with the case and make an outright possession order. If you will be unavoidably absent, inform the court in advance and arrange a virtual attendance.

You can either hire a legal representative for this or work with the county court duty scheme adviser.

Step 6 – The court decides.

The court’s decision will be one of the following:

– a repossession order that allows the lender to sell the property to pay your debts.
– a suspended possession order that allows you to stay in your home but under specific repayment conditions.
– a dismissal or postponement of the case.

If you get a repossession order, you can work with your legal adviser to see if you can set it aside or change it to a suspended order.

Step 7 – Eviction

Suppose the court ordered a repossession and the date for repossession has passed, or the court ordered a suspension, and you disregard any of the conditions. In that case, your lender can ask bailiffs to carry out an eviction. They only need an eviction warrant from the court and a notice to your home 14 days before the eviction date.

Step 8 – The lender puts your home in the market.

After the eviction, the lender will sell your home and deduct their money. You will get the leftover (if any). Sometimes, your debt may be more than the selling price. In that case, you will need to pay off the mortgage shortfall.

How long does it take to complete a house repossession?

The time a house repossession takes depend on your communication with your mortgage lender and how fast the court is with the proceedings. If there is proper communication between you and your lender, it may take up to 12 months. Otherwise, the whole repossession process may be concluded in 5-6 months.

Finally…

Getting a notice of a possible home repossession from your lender doesn’t always spend doom. In most cases, you can prevent your home from being repossessed if you have experts’ guidance. At Sell My Home Now, we understand how difficult repossession can be for homeowners. We can stop the repossession process today, if you would like to find out more give one of our friendly team members a call on 0800 644 5311.

We are always happy to speak to you about your situation and offer our assistance.

BACK TO BLOG

If you would like to sign up to our newsletter please enter your email below

Thank You

We will be in touch shortly with your FREE quote

Share with your friends

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on pinterest