15 Sep Repossession
Facing repossession is always in the back of people’s minds, the worry of being made redundant or not being able to keep up repayments if the interest rates go up, is always a concern.
Don’t be too worried about redundancy being linked to repossession of your house, the banks won’t start proceedings for at least six months which gives you chance to find another job and start to repay the payments you’ve missed.
There are also government benefits and initiatives aimed at keeping you in your home, for example, the government backed benefits pays some or not all of the mortgage interest. Now you receive these benefits after three months of losing your job instead of the nine months that were originally put in place back in 2006.
What should I do if I lose my job? Here is a guide to dealing with mortgage arrears and what you can do stop repossession proceeding.
WHAT HAPPENS IF I LOSE MY JOB?
Most repossession proceedings don’t tend start straight after you lose your job, keeping the wolf from the door all depends on the state of your finances and how you deal with the problem.
If you are made redundant, this usually means you get a settlement or severance pay from the place of work this will help to go towards your mortgage payments, also it’s always advised that you have a rainy day savings- financial advisers suggest that you have enough savings to see you through six months of bills. Unemployment insurance if you have this will cover usually up to three months of bills check to see if you have this.
There are also state-run benefits in place if you go to citizens advice they can help you make a claim. These benefits will pay some or not all of the interest for you, these payments are made directly to your mortgage provider.
The delay between making a claim (which you can do as soon as you lose your job) and receiving the first payment will be cut from 39 weeks to 13 in January.
WHAT CAN I DO IF I FALL BEHIND ON MY MORTGAGE REPAYMENTS?
The best thing to do if you realise that you’re going to miss a payment is to speak to your mortgage provider at the earliest opportunity if you realise that missing a payment is imminent. Lenders are usually pretty sympathetic and can help you come to an arrangement so you can keep your home, there are a couple of options they can do like extend the term on your mortgage or put you on an interest only mortgage which will make your repayments cheaper to stave off repossession.
When in monetary crisis you should always prioritise which bills get paid first for example, if you miss you mortgage repayments the inevitable will happen and you will be repossessed or if you don’t pay your council tax bill court proceeding will follow.
WHEN DO REPOSSESSION PROCEEDINGS START?
Repossession proceedings will happen if you keep failing to pay your mortgage month on month, your lender will apply to courts for a repossession order. RBS say that they won’t start repossession proceedings for up to six months of unpaid payments, other lenders haven’t stated that they will act more quickly as it is a lengthy process.
Lenders have stated that if the customer contacts the bank about their difficulties in good time they rarely start proceeding within six months, all arrears are dealt with by a case by case basis and each repossession proceedings are different.
WHAT CAN I DO WHEN MY LENDER STARTS REPOSSESSION PROCEEDINGS?
Mortgage lender cant just repossess your house they need to follow strict protocol procedures, the protocol sets out the steps that they should go through before they even consider court action.
These steps include giving you information about the amount of your arrears and whether interest or charges will be added; talking to you, or someone acting on your behalf about the cause of the arrears, your financial circumstances and proposals for repayment; considering a reasonable request from you to change the date of your regular payment; and, if you have broken a payment agreement, giving you notice that they will start court action unless you make up the missed payments.
When the case goes to court the judge will take into account whether they’ve followed all the protocol procedure correctly and this could affect the outcome.
If the lender does start proceedings, it can take another 70-75 days before the court hears the request.
THE REPOSSESSION HEARING
A mortgage company has to give you a 14-day notice of intended possessing proceeding with the court and the date. During the proceedings, the judge will consider your lenders claim and also the amount of offers you have been given to deal with your arrears. It is almost never too late to try to come to some kind of repayment agreement with your mortgage company. The government have provided representation in every court across the U.K. to help defendants get the proper advice, these have been a massive success and have staved off more than 85% of possession orders.
If the lender is awarded a possession order this is not the same as an eviction, you still have the option to stay in the property and try and either sell the house or pay your areas. The eviction order will only come into effect as a last resort so the lender can reclaim the monies outstanding and sell your property.
As a result, between nine and 12 months can elapse between a borrower first getting into difficulty and the property being repossessed.
HAND BACK THE KEYS?
If you decide to just vacate the property and post the keys back to the mortgage company don’t forget you are responsible for the property until your debt is clear so you will still have to pay buildings insurance and the mortgage repayments, if there is a short fall on the property you are 100% responsible for this outstanding balance.
WHAT WILL HAPPEN AFTER REPOSSESSION?
Once the mortgage lender gains a possession order, they’ve got a duty of care to you and must get the best price. This doesn’t stop them putting most of the properties into an auction, to gain a quick sale which will be below market value.
If you believe that you have been treated unfairly by your lender – because it took a long time to sell your property and your arrears went up because of this, for example – you should complain to the Financial Services Ombudsman, the charity advised.
Home House Buyers can help stop house repossession today and clear your outstanding debt so you can lift that weight off your shoulders and get on with your life debt free, call 0800 6121 366 or fill out an enquiry form for a no obligation cash offer.