Mortgage Arrears | How Many Months
Before a Repossession?
If you are in mortgage arrears and facing a potential repossession it is a serious situation to be in. But repossession isn’t something that happens overnight. The repossession process can take many months and during that period you’ll have time to do something positive about it.
In this article, we’ll look at what being in mortgage arrears means and at how long the repossession process takes.
What exactly are mortgage arrears?
Technically a mortgage goes into arrears on the first the day you miss a payment. But some lenders offer an unofficial grace period of 15 days before they’ll even contact you about it.
Even then, repossession proceedings – more correctly known as a possession action – won’t begin immediately. Most lenders don’t want to repossess if they don’t have to and will only use repossession as a last resort. So, most lenders won’t even consider it as an option until you have missed three months worth of payments, although we have seen some lenders postpone even further, after missing a payment for the third time.
What happens when you are in arrears?
Mortgage lenders can’t just knock on your door and throw you out. They have to follow what is known as The Pre-Action Protocol for Mortgage Arrears, first. This protocol requires that you are properly and fully notified and given a chance to put things right before the repossession process is started.
Most lenders issue a series of standard letters each, typically, with a 15-day deadline to respond.
Eventually, you will be told that unless the arrears are paid your lender will apply to a county court for an order to repossess your home.
Pre-empting the arrears process
One approach you might consider, once you realise that you can’t make a payment, is to contact your lender BEFORE they contact you.
Pre-empting the process and contacting your lender can often help as lenders tend to see those who approach them as being more responsible and more committed to settling their arrears than those that do not.
If you do this, however, you’ll still need a plan of action.
What you should do when the arrears process starts
Whatever you do, don’t ignore any letters or phone calls from your lender. Contacting them immediately can slow or halt the repossession process, whilst ignoring them could see that process accelerate.
Take legal advice on the best course of action for you. The government supply a few useful contacts that you can view here.
If you can make a payment or part payment immediately then you should do so. Also, you can suggest a repayment plan to your lender for settling the arrears.
There are also some other things you can do to help your situation which, under the Protocol for Mortgage Arrears, your lender must give you an opportunity to do.
These include making a claim against mortgage payment protection insurance, claiming on any government support you might be entitled to or rescheduling payments on the mortgage.
- For more information on your rights under the Protocol for Mortage Arrears check out our article on how to stop a house repossession.
Preparing for the possession hearing
When your lender applies to a court for an order to repossess this is known as applying for a possession order.
If this has happened already it could still be several months before your case comes to court as they will have to wait for a court date.
It is worth remembering that it is NEVER too late to pay off your arrears, make a part payment, or come to some arrangement with your lender.
This could, effectively, move the process back a stage or two or it could even halt it completely.
Another option, at this stage, is that you could sell your home if you wanted to. The Protocol states that your lender has to allow for this option.
This option could be attractive, as, by selling your house, you will get a better price than you will if the house is repossessed and it is left to the lender to sell.
What happens when your mortgage lender takes you to court
- A good source of information on what happens when your mortgage lender takes you to court is this article, here, from Citizens Advice.
Importantly, just because you’re taken to court DOESN’T mean your lender will be granted outright possession and there are several other, possible outcomes.
You’ll be given the opportunity to argue why your home shouldn’t be repossessed and suggest solutions such as a repayment plan.
It’s a good idea to take legal advice on what might work for you. If you haven’t already sought that advice then there should be a duty, legal adviser who can help you on the day.
Other possible outcomes could include being ordered to pay the money you owe but without a repossession. You might be ordered to pay only part of what you owe or be given more time to pay. And your lender might be granted a suspended possession order which will only come into effect should you not do what has been agreed.
It also might be possible to request an adjournment to a later date, to give you more time to come up with a solution.
You could even ask for the case to be thrown out if, for example, you feel your lender hasn’t followed the correct protocols or has treated you unfairly.
If you feel that your lender has broken the rules that they are obliged to follow then a complaint to the Financial Ombudsman may help your case.
If a repossession is granted
If your lender has successfully obtained a possession order it doesn’t mean you will be evicted immediately.
A Repossession Order and an Eviction Order (more correctly called a Warrant of Possession) are different.
The law states that the court must normally allow 28 days before a possession order comes into force and that this time period can be extended up to 56 days.
If you haven’t moved out in this time then the lender can apply for a Warrant of Possession meaning that a bailiff can be brought in to evict you.
All this can take several weeks.
Lenders may well hold off on executing the possession order and the eviction if they think that it can be avoided.
For example, if you come to a repayment arrangement then you should be able to go back to court to get the original possession order changed or cancelled.
- If you are facing a repossession order then you should seek legal advice. The government offers the following explanations of the order.
How many months do you have?
If you add up that each stage requires or is likely to take then – although there are no guarantees – you are looking at about nine months that can pass between first getting into arrears and a repossession actually taking place.
But please do not delay in taking action or rely on the potential of a nine-month timeframe as every situation is unique, fluid and non-cooperation will always make things worse.
It is useful to know, however, that when it comes to a potential repossession there will always be some time to consider your options and decide the best course of action for you.
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