Before taking you to court for mortgage repossession, your lender must follow certain rules. The rules were introduced by the government to protect homeowners from over zealous lenders. For example, your lender is able to take you to court for repossession but must have discussed payment options with you first.
Lenders’ duties before court action
Most importantly, your lender must treat you fairly and communicate in a clear and easy way. If you are uncertain about any information your lender provides, you should tell them. They must then consider any reasonable suggestions you make to pay off your arrears and avoid mortgage repossession.
You should receive details regarding:
- Your payments over the last two years
- The amount of your arrears
- The monthly installments you should be paying
- How much is still owed
- Any interest or chargers that will be added to the costs through failure to pay
Rules that apply to borrowers facing mortgage repossession
If you are facing threat of home repossession there are some rules which also apply to you as a homeowner. It is particularly important to follow these instructions in case you do end up in court. For the best outcome, you must be able to demonstrate you have made as much effort as possible.
You can do this by:
- Keeping in regular contact with your lender and maintaining a responsible attitude. You can demonstrate this by returning phone calls and responding to emails.
- Exploring all possible options to pay off your arrears. Show your attempt to find a solution rather than just sitting back and hoping someone else will do it.
- Have a conversation with your lender and discuss ways you could come to an agreement. This could really work in your favour when it comes to court.
What if a lender doesn’t follow the rules for repossession of house?
Prior to the court hearing, you should get legal advice if you think your lender hasn’t followed the correct protocol.
In the situation of the lender not following the correct protocol, the court could:
- Give you an extended period of time to negotiate with your lender by delaying the repossession court hearing
- Command your legal costs are paid by your lender
- Prevent any additional costs to be added by the lender on top of what you already owe them
Lenders should also send out at least one of the following articles which provide sound advice on how to keep your home:
- Booklet on Mortgage Arrears – National Homelessness Advice Service (NHAS)
- Information sheet on arrears – Financial Conduct Authority (FCA)
- Information sheet on default – Financial Conduct Authority (FCA)
If you have not received any of the above be sure to read through at least one and inform your lender.
If you are at risk of losing your home, the charity Shelter can offer advice and help. You can contact them here: http://www.shelter.org.uk/
If you do decide to sell your house quickly contact our team at National Property Buyers. We are have over 25 years combined property buying experience and are often able to help avoid repossession.
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