House repossession can happen when a homeowner falls behind with monthly mortgage repayments. The level of arrears that are allowed to mount up before this happens varies considerably between lenders. It is a complicated and involved process where the lender seeks court permission to make a forced sale.
Latest House Repossession Statistics
There were a total of 26,215 repossession claims against borrowers between April and June 2009. This compares to 38,832 at this time 12 months ago – a 32% reduction. This is evident that either government schemes are starting to work or lenders are taking a more sympathetic approach.
Existing Help to Prevent House Repossession
Mortgage lenders have already been told by the government that they must explore all other possible avenues prior to seeking a forced sale through the courts. The following measures are already available to assist struggling homeowners:
- There is a voluntary agreement in-place with several large lenders in relation to the repossession of property. The agreement requires that the borrower should be at least three months behind with his/her mortgage repayments.
- The eligibility criteria for those on certain state benefits has also changed. Those with a mortgage could be eligible for extra support called 'Support for Mortgage Interest.' This is aimed at assisting homeowners with the payment of some (but not all) of the mortgage interest.
- A mortgage rescue scheme exists for those facing house repossession who would be eligible for help under homelessness legislation from their local authority.
- A Homeowner Mortgage Support Scheme permits eligible homeowners to reduce their mortgage interest payments to an affordable level for a period of up to two years.
- There is also legal assistance available under the Housing Possession Court Duty Scheme. This means that anyone can receive repossession advice on the day of their hearing.
New Rules for Repossession of Property
It used to be the case that a local authority would be informed after the forced sale. Sadly, this gave a homeowner very little time to do anything about their predicament. This rule changed on the 1st October 2009. A homeowner now has sufficient time to get help and assistance from their local authority.
The Ministry of Justice advises any homeowner who is finding it difficult to make monthly mortgage repayments to seek help from National Debtline (a registered debt advisory charity). The sooner that help is sought in relation to the threat of house repossession, the greater the likelihood of a satisfactory outcome.
Those who found this article useful may also be interested in reading more about the sell and rent back scheme. It is also worth checking if a homeowner has an unlawful mortgage agreement - the law requires that a contract is fair to both parties, not just the lender.
Sources
Wall, Emma. (1 October, 2009). "Repossession: councils to offer earlier help." The Daily Telegraph.
(14 August, 2009). "Mortgage repossession statistics show government support continues to make an impact." The Ministry of Justice.
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