Facing House Repossession: The Lesser-Known Facts You Need to Hear

Maybe you’re facing house repossession or maybe you know somebody who is. It’s a horrible situation to be in, you feel powerless like everything is being stripped from you and there is nothing that you can do to prevent it. Unfortunately, thousands of people in the UK face having their property repossessed every year and very few of them actually know the steps that they can take to help prevent it.

The saying is ‘It isn’t over until the fat lady sings… or the final whistle blows’, well that is similar to fighting a repossession battle, it isn’t over until the very moment you hand over the rights to your home. Until then, you aren’t powerless and there are actually a number of steps you can take to help keep your home from slipping into the hands of the bankers.

Get Advice

The quicker you act the more options you will have, and the first step should always be to seek help off of somebody who is an expert. Everybody’s situation is different and it’s vital you find the steps that work best for you. That’s why one of your first choices should always be to find a solicitor or speak to the Citizens Advice Bureau. While there are a number of different organisations out there who are willing to help you for free, these are probably going to be your best first ports of call. If they think that there are people better positioned to help you they will point you in their direction.

Sometimes it is comforting to you aren’t alone. Last year between January 2017 and January 2018, the Citizens Advice Bureau helped deal with more than 1.5 million queries about debt. That’s a lot of experience accumulated in debt related areas.

Talk to your Lender

Funnily enough, it’s also a good idea to talk to your mortgage Lender. Keep a strong record of all your contact with them as if it goes to court appearances things will go more in your favour if you can prove you upheld your responsibilities as a borrower. Emails, letters and evidence of phone calls can all help to reinforce that you kept them up to date on your situation and were working with your lender to come to an agreement in regards to your repayments.

Your mortgage provider is most likely to want to be able to come to an agreement with you and find a realistic way of recovering their money through well-structured repayments. Contrary to popular belief, taking your home is not in the best interests of anybody involved.

Contacting your mortgage provider as early as possible is a big plus. If you can show that you have a strong plan to budget and make the repayments it is more than likely they will be happy to accept your proposal or at the very minimum, be willing to work with you to reach an agreement.

Lenders have a responsibility to you and have to follow certain steps when a borrower falls into arrears. In 2008 the Government introduced a series of steps for lenders that help to give the borrower clarity. A mortgage broker must do the following:

• Tell the borrower how much they owe
• Take into consideration requests from the homeowner to change the way they make repayments on their mortgage
• Respond to any offers of payment made by the borrower
• Provide clear reasoning for turning down an offer of payment within 10 days
• Give the homeowner a reasonable amount of time to consider any proposal they make
• Lenders must give borrowers 15 days written warning if they plan to start court action complete with the date and time of the repossession hearing
• Lenders must inform the council within 5 days of getting notification of the date of the court hearing, in case the house owner needs to apply to the council for homelessness

Court Cases

You must attend any court cases you are Summoned to. Missing a court summons can be incredibly damaging to your case and can result in huge fines. Whatever you do make sure you keep up to date with your affairs and know where you are supposed to be at all times.

Some of the deadlines you have to meet can at times seem overwhelming. Ensure you are well prepared and organised. Having a calendar dedicated to your property related affairs and a folder for all your documents will be incredibly helpful. Nothing is more stressful than last minute hunting for a letter or notice you know you received but can’t find.

Apply for a Preventing Repossession Fund

As of 2009, the Government introduced a fund specifically designed to help target repossession statistics. The introduction of extra funding was given to local authorities to help households facing repossession by providing them with loans between £1000 to £5000. This fund was then increased by the Government in 2012 by £20m.  

The distribution of these loans is solely at the discretion of local councils. While there is no way for people to apply directly for these funds, the Citizens Advice Bureau or advice body you decide to move forward with will help you contact the relevant parties in pursuit of these loans.

Cash Home Buyers

If you find a cash home buyer company with a good reputation it is a reasonable option for helping to stop house repossession. Although cash home buyers are definitely one of the later steps you should be considering, these companies are incredibly helpful if you need to sell your home quickly and can be a good last minute get out of jail free card.

Using a cash home buyer will normally ensure you’ll get more for your home than if you allowed your mortgage lender to simply repossess it. The amount you receive is typically below market value but can provide opportunities for borrowers facing repossession to downsize rather than face homelessness.

Plan, Budget and Eliminate Debt

The ultimate way to avoid house repossession is to plan correctly. Nobody expects to face circumstances that prevent them or their partner from working but, having the right systems in place can make difficult times more manageable.

Taking control over your finances is essential to stopping repossession. Mortgages are often 25-30-year periods and prioritizing these repayments should be one of your highest priorities.

Even if you are reading this and house repossession is something you don’t expect to ever be facing, its well worth making the effort to prepare. Situations like bankruptcy and home repossession can always be avoided through careful planning and budgeting.

While the UK’s personal debt continues to increase annually it’s vital that you stay on top of yours. By paying off your debts as quickly as possible and saving as much as you can, individuals can be well equipped and prepared to handle situations before they occur.