Repossession Process Overview
Borrowers that fail to make mortgage payments or repayments on any loan secured on their property in time run the risk of falling into “arrears”. If the situation continues to escalate then they could be in danger of having their home repossessed.
Under the terms of the mortgage contract, lenders have the power to take back control of the property and sell it on to recover any arrears and outstanding balances. However, a lender will normally only resort to such action if all other means of retrieving their money have failed.
There are, however, several stages where borrowers have the opportunity to prevent this from happening.
The following is a general overview of the stages involved with the repossession process:
- 1. Missed Payments: the borrower’s account falls into arrears; lenders chase missed payments.
- 2. Solicitors Notice: if borrower keeps defaulting at this stage the lender may pass the case to their Litigation/Collections Department for review and to set up repayment aggrement.
- 3. Proceedings Begin: if arrears continue or payment arrangements are not met the lender may instigate Possession Proceedings through the Court, leading to a Court Hearing being scheduled. A letter is then sent to the borrower stating a time and date for a hearing to take place before the judge.
- 4. Court Hearing: if the judge rules in favour of the lender then he/she will grant the lender a Possession Order, which will be sent in writing with a date for the order to take place. Borrowers are usually asked to leave the property voluntarily on, or prior, to this date.
Lenders may also submit an application to the court for a Possession Warrant. The borrower will receive a letter, endorsed by the court that has granted the warrant for possession, confirming this. It will also include a time and date for the actual eviction to take place and a warrant number which allows a bailiff to attend to ensure that the property is vacated at the stated time and date.
- 5. Eviction Notice: once eviction proceedings have begun, the evicted party may be granted access to the property to collect any remaining belongings. This visit usually takes place 2-3 weeks after the actual eviction.