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Preventing Repossession - Steps You Can Take To Save Your Home

Author: JamesBailey Total views: 2 Word Count: 716

Missing mortgage payments and being threatened with repossession is every homeowner's worst nightmare, yet every year thousands of people lose their homes. Lenders take court action to gain control and ownership of your property, so that they can sell it to recover the debt you have failed to repay. Your account is "in arrears" if you miss a mortgage payment, and generally after two or three missed payments lenders will start repossession proceedings.

The important thing to recognise as a homeowner threatened with repossession is that there are options to consider. If a lender takes action through the courts it does not mean that you will definitely lose your home. Refinancing your home may help, or you could always sell. Getting friends of family to help with the arrears is a further consideration.

Talking to your lender is the first step you should take, before looking at other options. Your lender may be able to provide some solutions to help you resolve the situation and bring your account up to date. This may include switching your mortgage to interest only, extending the mortgage term or putting a new payment plan in place. Whether your lender can help or not, it is important to be able to show a judge you have made efforts to communicate.

Assuming you do have to go to court, then its worth noting that although serious, its far less formal than you may think. Possession hearings are held in the county court and are in private rooms. The lender is likely to be represented by a legal clerk. You, the lender and the judge will all be seated at a table and generally hearings only last ten minutes. Its your opportunity to explain what's happened and aim to reach agreement on clearing the debt so you can keep your home.

Generally speaking, a judge will grant you a suspended order if you can meet future monthly payments plus a small contribution towards the arrears, or you could offer to clear the arrears if you can gather the funds together to do that. A suspended order means you can keep your home provided you meet the agreed commitment. Paying off the arrears means your account is back up to date so the lender cannot repossess it. Other options such as refinancing or selling your home are only likely to gain extra time to get them through if the judge is satisfied that one of these options is sufficiently progressed and will be finalised within say four weeks.

Refinancing your home may be an option worth considering. However, in a repossession situation time is of the essence and the broker may not have any control over timescales or being able to guarantee you will be able to get the refinance you need. The fact that you are in arrears will also limit the availability of finance to you and the long term cost is likely to be very high. Selling your home is a further option but again beware that you will have very little control over the timescales and it may take time for an offer to be made and for the buyer to get the finance they need to buy your property.

At the court hearing the judge may allow you to keep your home via a suspended possession order. For example, if the judge thinks you are able to meet future monthly payments in full, plus a contribution towards arrears. This will mean you must follow this plan and failure to do so will allow the lender to gain possession without the further need for a court hearing (though in practice you could request one). If you present options such as selling your home or refinancing it, then the judge will want to see evidence that this is happening and that things are progressing and that the lender will get the money due to them within 28 days.

Facing repossession is every homeowners worst nightmare. However, recognising that their are options available and that there are organisations available to help you is important. What's critical is taking some action and seeking help. Organisations such as Shelter, the Citizens Advice Bureau and the National Debtline are good starting points for advice, Make sure you are contacting these government supported agencies or charities and not some copy cat private enterprise.

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About the Author

Author James Bailey has a good working knowledge of the repossession process and has helped numerous people save their home in the UK. Find more information, articles and obtain a full report on the repossession process at www.repossessionhelp.info

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