Victoria Adams writes: When you have fallen into mortgage arrears, it is very important to communicate with your mortgage lender about your financial situation. Also, getting legal advice immediately could help you resolve the problem. Your lender cannot just throw you out of your home. He needs to follow a pre-action protocol. Here are the 7 steps of repossession that you must know:

Step 1: Your mortgage lender notifies you about your arrears:

When you miss out on your monthly instalments for your home loan, your lender will contact you. He will ask for an explanation and try to reach an agreement if he is not satisfied with your response, or if you do not respond to his letters or phone calls, he will write to you again, this time warning you of starting court action to repossess your house.

Understand that your lender just wants you to pay off the arrears and does not want to take legal action.

Step 2: Your lender applies for a possession order to a county court:

Without getting the permission from the court, your home cannot be repossessed by your mortgage lender. To get the permission, the lender must apply to the local county court listing out the reasons why he should get the possession of your home.

Remember that even if your mortgage lender has started a court action, you can still reach out for an agreement with them.

Step 3: The court make a summons

A court official will write to you informing the date and time of your hearing. He will send you a claim form which will have the following details:

The reason why the mortgage lender wants to repossess your property
A defence form that you need to fill up and mail it to the court

You must seek professional advice from experts about mortgage repossession process. An experienced adviser can prepare you for the court hearing and negotiate with your mortgage lender and his solicitor.

Moreover, if you have a low income, you are also entitled to legal aid. On the fixed date of hearing the judge decides whether you can keep your home or should it be passed to the lender.

Step 4: The day of court hearing

The judge hears the repossession case on the day of your hearing before he gives his verdict. He will ask for evidences from you and your lender.

The judge may:

Dismiss your case
Decide that your home should be repossessed by your lender. It means that the lender can evict you out of your property
Make a suspended possession order. This will allow you to stay in your home provided you repay the arrears in installments
Adjourn the case and postpone the hearing at a later date.

You must attend the hearings because if you fail to do so, it is more likely for the judge to give out an outright possession order against you.

Step 5: The judge makes a repossession order:

If the court decides that your property is to be repossessed, it gives you a possession order which has the exact date of your eviction. You are given 28 days to pay for all the expenses.

Step 6: The lender sends bailiffs to remove you if you do not leave by the given date

The lender can request bailiffs to evict a borrower under two circumstances:

When the outright possession order has expired or
When the borrower breaches the suspended order

The lender does must apply for a bailiff's warrant to evict you. The bailiffs will send you a notice that states the date of your eviction. However, you can challenge an eviction by bailiffs.

Step 7: The lender sells your home

After repossession, if you have left the property or have been evicted by the bailiffs, your mortgage lender sells your home. But, that does not mean you don't owe him any money. You are still liable to pay any shortfalls between the selling price of the property and your interest and capital repayments on the mortgage.

If you are being threatened by repossession, you must immediately talk to an adviser such as Stopping Repossession. They can guide you throughout the process and make sure you do not lose your home.

Victoria Adams is a blogger for Stopping Repossession. Stoppingrepossession.com is a firm in UK that helps troubled homeowners navigate their way through the process of repossession and eviction.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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