Repossession Guide

BACKGROUND

1. Repossession is normally undertaken by a Bank or Building Society who hold the first charge on your house. It can however also be taken by second chargees (further advances and loans - e.g. secured finance), and also if someone has a Charging Order secured following a County Court Judgment. The latter is extremely rare.

2. The Building Society is entitled to seek repossession action if the loan is 2 or more months in arrears. Typically however, this becomes a trigger point for referral to their internal Debt Recovery Department, and they will ordinarily write to and liaise with the Borrower in an attempt to determine the cause of the problem and to arrange for the arrears to be cleared without resorting to court action.

This is the typical timescale:

STAGE 1- DAY 0 - ISSUE OF POSSESSION PROCEEDINGS

3. 6 months is commonly the trigger point in terms of the amount of arrears which results in Lenders issuing court action, but the time frame does depend on the lender. This is done by way of a County Court Summons, issued in the court local to the Borrower. On filing a request for issue, the matter will ordinarily be listed for a hearing date 4-6 weeks hence, dependant upon the court's hearings backlog.

STAGE 2 - WEEK 4-6 - POSSESSION COURT HEARING

4. At the hearing, the Borrower should attend. If they do not, the claim for possession by the Mortgagee would be deemed to be unopposed, and an Order for Possession will be made 28 days from the date of the possession hearing.

STAGE 3 - WEEKS 8-10+ - ORDER FOR POSSESSION ON A GIVEN DATE

5. If the Borrower can demonstrate their ability to meet the current monthly instalment, and to pay a contribution towards the arrears, the court will in almost every instance at the first hearing, make a suspended possession order. That is they will grant possession to the Building Society, but this cannot be enforced by eviction so long as the Borrower meets the monthly payments, and the arrears contribution as agreed.

6. A common failing of Borrowers is to make a promise to repay the arrears back as quickly as possible in the hope of securing favour with the court. This leaves them committing to an unmanageable Repayment Order which they invariably default upon shortly afterwards.

7. It is widely accepted by the court following the case of Cheltenham and Gloucester -v- Norgan that Borrowers only need to demonstrate that they can pay the current monthly mortgage payment, and their contribution towards the arrears such that the arrears will be paid over the remaining mortgage term. Thus a person with £2,400 arrears with 20 years remaining on the mortgage (240 months) only has to agree to pay the current instalment, and £10 more to have the Order suspended. This is much more manageable, and less likely to result in further default.

STAGE 4 - WEEKS 10-13+ ISSUE OF POSSESSION WARRANT (EVICTION)

8. If either an Order of Possession is made, or a Suspended Order which is later defaulted upon by the Borrower, the Building Society will submit an application to the court without a hearing for the Bailiff to attend and forcibly evict (Possession Warrant). NOTE: The date in the order for possession is not the date that the borrower has to leave. If they remain, the lender has to issue the Possession Warrant. Usually this process takes 2-3 weeks, dependent upon the court's backlog and Bailiff's work load. This is the key and most pressing deadline date for any repossession action.

9. If you have agreed to sell your house, even with a Bailiff's eviction looming, it is possible to apply to the court to have the Possession Warrant suspended. The Court fee is currently £30, and the application is submitted to the local County Court.

SOLUTIONS TO AVOID REPOSSESSION:-

10. The Possession Warrant can be suspended in two ways:-

a) Payment of the arrears, and maintaining ongoing mortgage payments. If the arrears are cleared, the court will no longer see any reason to proceed with the possession action, and will allow the Borrower to remain. Ensuring ongoing payments are maintained is essential.

b) Showing evidence to the Court that a house sale is proceeding Here you need firm evidence to put before the court that the sale has been agreed and that this is from a proceedable buyer. The application to the court should include a letter confirming the offer to purchase the property, a letter from your solicitors confirming that they have instructions to sell, and a letter from the purchaser's solicitors confirming their instructions to act in that purchase. It is further advisable for you to make the most recent monthly payment prior to the application to the court, and agree to make any further monthly payments that fall due until the sale completes.

GENERAL COMMENT:-

11. Ultimately whether possession will be suspended is a matter for the District Judge, and they have absolute discretion based upon consideration of all the facts. If the Borrower has had several suspended Possession Warrants, and several offers to purchase which have turned out to be false dawns, you may come across some difficulties. However, the guidance given to District Judges is that where there is an imminent and proceedable deal, they should look to allow a short adjournment to facilitate the sale as being in the best interests of all the parties. From the Lender's point of view, they get their mortgage discharged quickly and without the additional cost and work of repossessing, and from your point of view, you usually achieve a better deal.

12. In these type of situations it is important to gather as much information as possible about your financial position.

13. Your lawyers involvement will be to ascertain the present position, liaise with the Building Society if necessary, and then advise on and assist in making an application to the court to suspend. It will also include liaising with any local agency solicitors to attend at the hearing and reporting back. The Solicitor can then deal with the sale on your behalf, ensuring that any deadlines imposed by the court to allow for the sale to proceed are monitored and met.

14. In these situations, time is of the essence. It requires swift action, and a lawyer who can act accordingly.

How we can help

If you have reached a point where you cannot afford to pay off the arrears, we can help by buying your house quickly. If you want to you can still live there as a tenant, so none of your neighbours will know anything.

We will help you deal with the Courts, and if your situation improves later you can have the option to buy the house back.

If you would like some help call us on 0845 052 2873 in total confidence.

Or fill in the enquiry form with your contact information – and we’ll call you back within hours.

We can generally give you between 75% and 90% of the open market value for a quick, chain free sale