What to do if your mortgage lender is seeking to repossess your home
If you fall behind on your repayments you’ll be in what’s known as ‘mortgage arrears’.
If you don’t pay your arrears, your mortgage lender might apply to court to repossess your home.
They do this so they can sell your home and recover the money you owe. If successful, you’ll face eviction and will need to find somewhere else to live.
If you’re currently in this position, don't panic. You might be able to stop your home from being repossessed - but you need to act quickly.
How to try and save your home
If you fall into arrears it’s important to communicate with your lender - don’t ignore any letters.
Work out how much you can afford to pay each month and suggest a repayment plan to your lender. A debt adviser can help you do this.
To make payments more affordable you may be able to lengthen the term of your mortgage.
Make sure you pay something, even if it’s only a small amount, on your mortgage each month. This will help your case if your lender takes you to court.
The stages of repossession
Mortgage lenders must stick to strict rules when repossessing a property.
Your lender must tell you how much you owe, and consider a request from you to change the way you pay your mortgage.
Your lender must respond to any offer of payment you make within 10 days. If they turn down your offer, they must explain why.
Your lender might suggest a payment proposal, which sets out what payments they want you to make and when. For example, they may want you to make your normal payment plus a proportion of the arrears each month.
If your mortgage lender suggests a payment proposal, they must give you a reasonable amount of time to consider it.
Starting court action
If an agreement can’t be reached between you and your lender, your lender must give you 15 days’ written warning before they start court action.
They must tell you the date and time of the repossession hearing.
Once your lender has applied to court to repossess your home, the court will send you a blank defence form and guidance on how to fill it in.
This form is your chance to state your case, explain your situation, provide reasons why you should be allowed to stay in your home, and point out if your lender has done anything wrong.
You need to return it within 14 days.
The court hearing
It’s important to attend the court hearing. This is your chance to stop your home being repossessed.
If you don’t attend, it’s more likely the judge will give your mortgage lender the right to evict you.
The court is likely to ask for proof of your finances. So you should bring payslips, bank statements, letters about benefits, and any job offers with you. If you’re trying to sell your home, bring a letter from your estate agent stating this.
The judge will take into account whether your mortgage lender followed the rules when it took you to court, your personal circumstances, and whether you’ve continued to make payments on the mortgage.
Get some legal advice before you go to court to increase your chances of success.
Check to see whether you’re eligible for Legal Aid. Otherwise, you could get help under the Housing Possession Court Duty Scheme on the day of the hearing. Contact the court in advance and ask if there will be a legal adviser there who could help you.
If the court decides your lender can repossess your home it’ll issue a ‘possession order’.
An ‘outright possession order’ gives the lender the right to own your home on a given date - normally 28 days after the hearing. If you don’t leave by this date, you can be evicted by bailiffs.
A ‘suspended possession order’ means that if you make regular payments as set out in the order, you can stay in your home.
Only a small proportion of properties are repossessed - with the right help and action you can normally avoid it happening to you.