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Stopping a Repossession

Posted on: 06/05/2021

In this article we will look at repossessions and how to deal with one if facing this sometimes terrifying and intimidating process.

It is estimated that there are currently 1.8 million homeowners in the UK who are concerned about being able to pay their mortgage repayments. This number may only increase in the coming months as on the mortgage holiday scheme comes to an end in July 2021.

With 2.6 million mortgage holidays being approved between March and November 2020, a large rise in home repossessions has been therefore been forecasted for 2021 and beyond. This may be made all the worse by the ending of the scheduled furlough scheme in 2021.

How Do Repossessions Occur?

In short, a home repossession works by a mortgage lender seeking a court order to take possession of a property.

Having two or three missed mortgage repayments can lead to lenders starting to consider the possibility of this repossession process, especially if your credit score is low. A couple of missed payments will not in itself automatically trigger a repossession though, since the process can be expensive and time-consuming for mortgagees, so repossession isn’t always the immediate course of action for a lot of lenders.

Lenders usually apply for home repossession court orders only if repayments haven’t been continued, after they have negotiated with borrowers. If a court order is eventually sought, a judge will also often listen to the homeowner and can rule in their favour should they be able to demonstrate that funds are available to cover any missed payments.

Temporary Ban on House Repos

Following a recent extension by the Financial Conduct Authority, home repossessions could not be enforced until 1st April 2021 at the earliest due to COVID’s ubiquitous financial impact.

So, if your property is in the process of being repossessed, action would have been paused until this date had passed. You would have done or may now receive a reactivation notice advising you on when proceedings will continue.

Financial Dangers of a Repossession

It is important to note that a repossession doesn’t take any financial duties off of your plate. Even when a lender applies for a repo, the mortgage payments and household bills are still your responsibility to pay off until the home is finally sold. Indeed lenders can take quite a while to sell, which builds up further debt with each passing day that it’s on the market. Preventing repossession will sidestep these difficulties altogether.

It is also worth noting that future lenders do not favour borrowers who have past repossession cases. If you’ve experienced a repossession, lenders are not likely to approve any future mortgage applications. It’s an alarm bell to them that typically results in denied requests.

How to Prevent Repossession of Your Property

You should always contact your lender in the first instance for early assistance. There are three ways in which they might be able help, depending on your situation. They could:

  1. pause repayments for a few months per the mortgage holiday initiative;
  2. provide you with a three-month grace period to payoff arrears; or
  3. transfer you to an interest-only mortgage plan on a temporary basis to lower monthly payments.

Additionally, mortgage lenders are required to follow “pre-action protocol.” This prevents lenders from engaging in court action in particular circumstances.

Even if court action has begun, you can still stop an eviction from occurring. For instance, a reasonable repayment offer could lead a judge to suspending the order altogether.

Homeowners can even sell the property on their own to repay the arrears if the lender has either an outright possession order or a warrant of possession.

Use a Quick Property Buying Company

The quickest way to potentially stop a repossession in its tracks is by selling to a quick buying company such as Quick Property Buyer. We can make an instant cash offer and complete within 7 days. There would be no fees to pay and indeed we pay for all the conveyancing costs.

Here at Quick Property Buyer, we have experience at stopping repossessions and dealing with the lenders. If you would like to get a no obligation instant cash offer and help prevent a repossession please do get in contact with one of our friendly team today.

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