GET OFFER
Thank you for entering you postcode details
 

What Happens When A Property Is Repossessed

What Happens When A Property Is Repossessed

WHAT HAPPENS WHEN A PROPERTY IS REPOSSESSED

For some reason, people believe that ” What happens when a property is Repossessed” the mortgage company auctions it off for a rock bottom price. This simply isn’t true, in reality, the mortgage lender has a legal obligation to the borrower to sell the repossessed property for the best price possible.

WHAT’S THE FIRST STEP WHEN A HOUSE IS REPOSSESSED

Once a repossession order has been granted the mortgage lender will appoint a bailiff to take possession of the house. He will change the locks, shut off all of the utilities and make sure the taps and cisterns aren’t going to leak. The bailiff’s duty is to physically repossess the property and to make sure it is locked and secure. They aren’t supposed to damage the property but some jobs take physical force to repossess a property, so they won’t win any award for home improvements. Potential buyers can usually tell when a property has been repossessed, they will usually come in with cheeky low offers.

Borrowers find it frustrating that there is a delay with the property being repossessed to being sold. This is infuriating for the borrower who was denied the time to sell their property themselves before being repossessed. There can be many different reasons why a mortgage lender may take a while to sell a property, they might have many houses to sell at that particular time or they might be waiting for house prices to rise in that particular area.

WHAT ARE THE STEPS INVOLVED IN REPOSSESSION?

The repossession process can be complex, but it generally follows a set of standard steps.

  1. Notice of Default: The first step in the repossession process is for the lender to send the borrower a Notice of Default. This notice will specify the amount that the borrower is behind on their payments and will give them a set period of time to catch up. If the borrower is unable to catch up on their payments within this time frame, the lender may proceed with the repossession process.
  2. Notice of Possession: If the borrower is unable to catch up on their payments, the lender will then send a Notice of Possession. This notice will give the borrower a final deadline to vacate the property.
  3. Court Order: If the borrower does not vacate the property by the deadline specified in the Notice of Possession, the lender will then go to court to seek a court order for repossession. This court order will give the lender the right to take back possession of the property.
  4. Repossession: Once the court order has been granted, the lender will arrange for the property to be repossessed. This will typically involve the lender sending a bailiff to the property to remove the borrower and their belongings.

REPOSSESSION PROCEEDINGS WHEN A PROPERTY IS TENANTED

When a mortgaged property is tenanted by way of an assured tenancy agreement when the property is repossessed the lender will have to appoint a receiver to administer the property. During this period the tenants will be allowed to remain in the home under the original terms of their tenancy contract, the rent will have to be paid to the receiver rather than sending the money to the landlord.

If the lender needs to evict the tenant as soon as possible they will have to start a separate repossession case against the tenant so the property can be sold vacant possession. The mortgage company will need to obtain a court order before this can happen which will delay the sale process.

HOW DO LENDERS MAKE SURE THEY GET THE BEST PRICE FOR A REPOSSESSED PROPERTY

The lender has to satisfy their duty of care to the borrower to achieve the best possible price for the property. They should place the property on the open market while it may be sold at auction most are sold the traditional way through an estate agent. If a satisfactory offer has been made the estate agent must advertise the offer to invite a higher offer before exchange takes place. A lender also has a duty not to incur unnecessary costs while they are selling the property.

CLAIMING IF A LENDER UNDERSELLS A REPOSSESSED PROPERTY

If as a borrower you feel that your repossessed property has been sold at an undervalue and the lender has failed in its duty to get you the best price, you can bring a case against the lender for damages. The damages are usually the difference between what the property sold for and what the actual market price has been determined to be. The borrower can also bring an action if they believe the costs involved in selling their repossessed property are too high. A borrower also has the ability to bring an action up to six years after the mortgage lenders failure. However always be wary about taking legal action as the costs can spiral and if the breach is not substantial, a case might not be worth pursuing.

WHAT HAPPENS TO THE SALE PROCEEDS

Once a repossessed property is sold the proceeds of that sale first of all covers the existing mortgage on the property. The mortgage company will use the remaining proceeds to clear any other debt against the property. Once the title is clear of any debt, the mortgage company will use the remaining monies to clear any costs or fees incurred during the repossession process. The fees and costs incurred can easily add thousands of pounds to any debt against the property, which can take a substantial amount out of what’s left over. Once all debts have been cleared and costs have been paid the balance of the sale proceeds will be sent to the borrower.

NEGATIVE EQUITY REPOSSESSED PROPERTIES

Properties in negative equity can be sold at a price which doesn’t cover the mortgage debt and all costs incurred. The borrow will be held liable for any shortfall from the sale price and whatever the mortgage amount and fees are. The lender has up to 12 years to bring an action against the borrower to recover their debt, in some cases, the lender can wait even longer to take the matter back to court to claim back what is owed to them. This only usually applies if the borrower admits liability for the shortfall made on the property after it has been repossessed.

WILL I GET ANY MONEY IF MY HOUSE IS REPOSSESSED?

In the majority of cases you may actually end up owing money. By the time the lender has sold your property and taking all fees and penalty payments into account. A repossession will also have a negative effect on your credit score. Lenders will now see you as a higher risk. According to Experiana repossession remains on your credit score for 7 years.

WILL THE COUNCIL REHOUSE ME IF MY PROPERTY IS REPOSSESSED?

If your property is repossessed, you may be eligible for council housing, depending on your individual circumstances. In the UK, local councils have a responsibility to provide housing to people who are homeless or at risk of homelessness. If you are facing repossession and are unable to secure alternative housing, you may be eligible for council housing assistance.

However, the availability of council housing can vary depending on the area in which you live and the demand for housing in that area. In some cases, there may be a waiting list for council housing, so it’s important to contact your local council as soon as possible to discuss your options.

In addition to council housing, there are also other housing options that may be available to you, such as private rental properties or housing associations. To help assess your individual situation. please call us on 0800 612 1366 for more advice on this matter.

Local councils in the UK have a duty to provide assistance to individuals and families who are homeless or threatened with homelessness within 56 days. However, this assistance is not automatically granted to everyone. To be eligible, you must meet specific criteria, including being unintentionally homeless, having a priority need, and having a local connection.

Assessing priority needs

Priority need is determined based on the presence of vulnerable individuals in the household, such as:

  • Pregnant women or those with dependent children
  • Elderly individuals
  • People with physical or mental health issues
  • Victims of domestic violence or abuse

If you fall into one of these categories, you are more likely to be deemed as having a priority need, increasing your chances of receiving rehousing assistance from the local council.

CAN I AVOID REPOSSESSION BY SELLING MY PROPERTY FIRST?

Stopping house repossession is possible when you use Home House Buyers. We have over ten years experience with dealing with stopping house repossession and have helped many people avoid repossession. The first step is to call a member of our team and discuss what is the best option for you. There will need to be equity in the property for us to be able to purchase the property from you.

Contact our office
We understand that contacting us about repossession can be daunting, but we want to reassure you that you do not need to disclose your situation when reaching out. We fully appreciate the complexities of each unique circumstance and approach every case with empathy and without judgement. Our team is here to provide support and guidance tailored to your individual circumstance, ensuring you feel heard and respected throughout the process. Please feel free to contact us for advice, knowing that we are committed to helping you in a compassionate and understanding manner.

Name(Required)

Instruct solicitors
All our solicitors specialise in stopping house repossession. All you need to do is fill in your paperwork and send it off, we do the rest.

Pick a completion date
You need to then pick a completion date which suits you. you have up to three months to pick the date but we advise that you work towards one that allows us enough time before the property is due to get repossessed.

Move into a new property
We can help you arrange your onward move. If you are a bit strapped for cash then we can look to lend you some of the proceeds of the property in order for you to find a rental property. Stopping house repossession is our speciality, so just give us a call for a free cash offer 0800 612 1366.

When you are stopping a house repossession, do you buy any kind of house?

Yes, as cash buyers we can buy any house. We buy semi-detached, detached, terraced houses, flats and bungalows. We often get many people asking if we can buy ex-council houses and again the answer is YES. We can even buy non-standard construction properties including wimpy no-fines and other construction types. If you want to know more than you can just give us a call to speak to a member of our stopping house repossession team today.

When you are stopping house repossession, do you buy houses in poor condition?
Again the answer is yes! As we are a cash buying company we can complete in a matter of days and it doesn’t matter about the condition of your property. Over the years, we have bought houses in all kinds of condition from those needing a full-scale refurbishment project and also those that are fire damaged.

We can even buy your house if it has damp, dry rot and even those with structural issues such as subsidence. We don’t use mortgages to purchase your properties so we can buy any house in any condition.

We speak to many looking at stopping house repossession and the best thing to do is not leave it too late. We can help no matter the situation as long as there is enough time for us to purchase the property. We can also help you to sell commercial property fast as we also buy most types of commercial units from shops, offices and even public houses just call us on 0800 612 1366.

HELP AND GUIDANCE

If you are facing repossession proceedings and would like some advice, our team have helped hundreds of people at each stage of the process and are available to offer free impartial guidance and peace of mind in your situation. Feel free to contact us on: 0800 612 1366.

There are also a list of government websites that can help you in this difficult time:

STEP CHANGE: They are an independent body which gives advice on debt scenarios.

SHELTER ENGLAND: Are a charity which deals with all kinds of housing issues within the UK.

 



Looking to sell fast? Fill out the form below and a representative will be in contact shortly. Alternatively call us on 0800 612 1366, or email info@homehousebuyers.co.uk

Contact us