Repossession Process
There are four stages to the repossession process. It is important you're aware of this, so you'll know how much time you have to stop or delay the process.
Don't wait until it's too late. If you know you're in difficulty; take action now; before your lender does.
1) Notice of Arrears
The first step is receiving a letter from the mortgage lender asking you to pay the arrears. The lender may ask you to repay it over a certain period. By not responding to this letter, the lender might send you a Notice of Intended Prosecution. This will ask you to appear in court. The lender might also apply to your local court for a possession order.
Do not ignore these letters - they could have serious consequences. You might still be able to negotiate with your lenders at this stage: they could agree to lengthen the payment period or they might give you enough time to sell the property. If the lender is willing to negotiate, you should think carefully which of the two is better.
If you spread the cost of the arrears over a longer period, you keep the property; however, if you sell the property yourself you might get a better price for it.
Devise a plan of action. If you want to sell the property, you need a buyer. This will help avoid the repossession process. Any equity in the property that is left over after the sale could be used as you please.
With historic low numbers of property sales; leaders are becoming less likely to repossess. They would rather not repossess than be stuck with a property they may not be able to sell to recover their money. So if you can demonstrate you are likely to be able to start making payments or be able to start soon, you've every chance of being about to retain your property.
2) Court Summons
If the lender has proceeded to the second stage of the repossession, it means an application for possession has been made to the court. You will receive basic details of the claim the lender has made as well as a date when the case will be heard in court. These documents should have a reply form, which you should complete and return to the court. Should you try selling your house to repay the mortgage, you should let the courts know about it. If they see you are being helpful, they might be able to delay the repossession court hearing.
When the repossession hearing approaches you will receive an affidavit that contains all the details of the claim, the outstanding balance, payment details, interest rates and any other terms and conditions. This is a legal document.
3) The Court Hearing
Repossession hearings aren't very social - you're unlikely to find anyone else besides the judge and solicitors of the lenders. The hearing consists of a judge who listens to evidence produced by the solicitor and anything else you may add. He or she then makes a decision based on what was said. You could get a chance to repay the arrears, suggest an alternative way to repay the mortgage or to be evicted. Repossession is the Judge's last option. This works in your favour - you have a chance to explore all the options open to you.
The judge has to choose one of 6 judgements, see Repossession Court Judgements for details of each.
4) The Repossession
This is the last step in the repossession cycle. This means your mortgage lender will repossess the property and you will receive a date by which you should leave the property. Should you not leave by then, a bailiff's warrant will be sought and you will be evicted. Once you are out of the property, it will be prepared for auction. Properties sold on auction do not fetch reasonable prices. This is why it is a good idea to find a buyer for the property yourself.