If your mortgage lender is starting proceedings with a view to repossessing your home, it is useful to know both how the process works, and what you need to do at each stage. Here’s a guide to the repossession process.
Why Lenders Want To repossess Your Home
Your mortgage is a secured loan, which gives your lender a charge over your property if the payments are not made on the agreed schedule and to the agreed amount. A lender may start proceedings once you are in arrears by two months. However, most lenders initially try to get in touch with the borrower to resolve the issue, rather than go to court to repossess your home. This may mean coming to an agreement to repay the arrears in installments. However, if you are unable to reach an arrangement that suits you both, or you are unable to stick to the payment arrangement, the lender will go to the County Court to sue for possession of your home. This will enable them to recover the money that is owed.
First Steps In The Repossession Process
Before your lender goes to court, the lender will write to you or telephone you about your arrears. This may be done through a special department that deals with arrears. At this stage, the lender will try to reach an agreement with you about how the arrears are to be repaid. Always respond to your lender and try to reach an arrangement. Ignoring correspondence from your lender will result in quick escalation to the next stage of the repossession process.
If your mortgage arrears remain unpaid for four to six months or more, then you will hear from the lender’s solicitor. The solicitor will ask you to pay the arrears in full and will warn that the lender will start repossession proceedings if this is not done. Again, do not ignore correspondence from the lender’s solicitor. Try to make an arrangement to pay, so that you can avoid repossession proceedings.
The County Court
If you are unable to reach a satisfactory agreement, the lender will apply to the County Court for a possession order for your home. To do this, the lender will need to fill out a claim form. You will get a copy of this, along with a date for the hearing. The claim form will include a description of your property, a description of the state of your mortgage account, details of the lender’s previous attempts to recover the arrears, and details of what the lender wants. That might be the possession of the property and repayment of all mortgage arrears.
You will also receive a defense form (N11M), which you must complete and return to the court within 14 days. This form gives you the chance to explain your circumstances. This is your opportunity to explain why you are in arrears, and how you plan to repay the arrears.
Completing the defense form is just one part of the process, but you still have to attend the hearing. If you do not, then the judge is likely to grant the lender’s request to repossess your home. If for some reason you are unable to attend, the case may be adjourned, which means that a new date will be set. An adjournment may also take place if further information is needed or if a point needs to be clarified.
The hearing is private, with only you, the lender’s solicitor, and the district judge in attendance. The hearing is your chance to tell the district judge about your payment proposal. There are three possible outcomes of a repossession hearing.
If you have managed to repay the arrears in full by or before the court date, then the case may be dismissed or adjourned indefinitely. The lender will not take possession of your home.
Suspended Order For Possession
If the judge believes that you will be able to stick to the payment arrangement that you have made, then the judge may grant a suspended order for possession. You will have to pay the monthly payment, plus a fixed amount towards reducing the arrears. A suspended order for possession means that you can stay in your home, as long as you stick to the agreement. However, if you default on the agreement, the lender can seek possession of your property through a possession warrant.
Repossession Order and Eviction
If the judge disagrees with your proposal and sides with the lender, then the judge will grant a possession order, which gives the lender the right to take possession of your property within 28 days. If you do not leave within that time, or if you default on a payment arrangement made under a suspended order for possession, then the lender can apply for a possession warrant and have you evicted. The date and time will be set for the eviction. However, even at this stage it is not too late to make an arrangement to pay. However, you will have to convince the judge that it is feasible, in order to halt the eviction process