Free advice line 0800 014 7863
With home repossessions making the news on a daily basis you may be wondering How does house repossession work? and what is the home repossession process?. Just two of the questions we answer for people who are concerned about having their home repossessed.
If you are have missed mortgage repayments this page will help you understand the legal implications of defaulting on a mortgage.
The Council of Mortgage Lenders reported that over 30,000 homes have been repossessed in 2008. More...
30,200 homes affected by repossession can certainly make the headlines. Yet it is less significant when compared with the 75,500 repossessions of 1991. In reality, last year’s repossession statistics amounted to just a quarter of a percent.
For some, however, repossession is a real threat. After three to four months of relapsed mortgage payments, the lender will seek repossession of the property if no resolution has been reached.
Here we examine the repossession process; how house repossession works and what can be done to prevent your home being repossessed.
In the first instance you will receive a letter from your mortgage provider’s solicitor informing you of a court date. Receipt of this letter means you will be required to attend court in order to justify or otherwise explain lapsed mortgage payments.
While you don’t necessarily need a solicitor, it is advisable to seek advice as soon as possible. For a list of recommended debt counsellors, click here.
Prior to a court hearing, you will receive a N11M form. This allows you to explain in writing the reasons for breaching the terms of your mortgage. It will also include a questionnaire, which is designed to establish whether you can afford the mortgage should you be allowed to keep the house.
The repossession hearing in court will include the lender’s advocate and the judge. In court, you have the opportunity to further explain your circumstances and propose an alternative to repossession. This may include some cut backs on your part, such as selling a car or refinancing loans over a longer period.
In the event you are unable to attend the court hearing, the date can be rescheduled for another time, providing you give adequate notice.
If by this stage you have managed to repay the arrears, you will be allowed to keep your house without any further action. Failing that, however, there are two other options open to the judge.
If the judge favours the lender at the end of repossession hearing, an outright repossession order can be put into motion. In the event a repossession order is implemented, you will have 28 days to leave the property.
Failure to vacate the property within that time frame would allow the lender to apply for an eviction warrant. Similarly, if any payment agreement lapsed within 28 days, the lender would seek to have you evicted.
The judge will suspend the order if your track record has been adequately explained. Furthermore, the judge will demand evidence of your ability to honour future payments. Most people win a suspended repossession order by reassuring the judge in both these areas. The lender and judge will also want assurances that arrears can be repaid. A monthly contribution towards lapsed payments is usually adequate and need only be modest.
A suspended repossession order may be awarded on condition of a Time Order. This is when the judge orders the terms of your mortgage to be rewritten to allow smaller contributions over an extended term. For example, a judge may extend your mortgage term from 15 to 20 years.
