Can I get my home back after house repossession?

So, you’ve been served with a repossession order by your mortgage lender. At this stage your options are limited. But you do have some legal rights after house repossession notices have been served. And in some cases it is even possible to get your home back.

If you pay your arrears and outstanding mortgage balance, for example by selling to a cash buyer, you might be able to regain legal access to your home. Your lender might disagree but don’t take their word for it. Always check; most people who work for mortgage lenders have very little – if any – understanding of English law or the repossession process.

Remember, the only person who can legally make a house repossession order is a judge.

Getting the best price after house repossession

After house repossession your mortgage lender will be chasing a fast sale to win back as much money as possible. This means that, sadly, many repossessed properties are undervalued by lenders as well as poorly marketed by estate agents. But if they don’t make every effort on your behalf, estate agents and lenders risk running foul of recent case law.

There are some simple actions you can take after house repossession to make the most of the situation by getting the best price for your property.
•    Make a note of the date your house was handed to estate agents and the day the sale process started.
•    Check the estate agent has put up a ‘For Sale’ sign and take a dated photo of it.
•    Make sure the estate agent has put your property in their window or at least displayed it prominently inside.
•    Is the agent actively marketing your home? Find out by asking them anonymously for details of properties like yours in your area. If they don’t give you the details of your home, take the name of the Agent for future reference.
•    Check your home’s details include the vacant possession, or that it is chain-free. A chainless purchase is a strong selling point and if they haven’t made this clear, they could be guilty of under-selling.
•    Make your lender confirm they’re keeping their eye on your sale to ensure the best price. You might have to push for this because most lenders are reluctant to confirm anything except what the estate agent has told them.
•    After house repossession, make sure both your home and garden are completely clean and tidy so there’s no physical excuse for offers to be reduced.
Get more help and advice at your local office of the Citizens’ Advice Bureau, citizensadvice.org.uk or at adviceguide.org.uk

Being aware of what you can and can’t do puts you in a position of power. As the homeowner, you have choices to make at every stage of the repossession process. If you don’t ask for help, you won’t get it, and every stage represents a good opportunity to put things right.

Opportunity 1
First off, your mortgage lender will write to you asking you to pay your arrears. Here’s your first opportunity; take advantage of your house repossession rights and respond honestly, setting the rescue process in place.

Opportunity 2
If you ignore the lender’s letter or they’re unhappy about your response, they’ll write to warn you of impending legal action. This letter is called a Notice of Intended Prosecution and it’s your second opportunity to work things out reasonably between you. If your lender is still not satisfied, they can apply to court for a possession order at this stage, so this is a valuable opportunity.

Opportunity 3
If your lender has applied to the court for possession to the court, the court will send you written details of the lender’s claim, and your court hearing date. These letters always include a form, your third opportunity; fill in and send back the form. If you’re close to selling your home the court needs to know – they might be able to delay the hearing and buy you more time.

Just before your hearing, you’ll get an Affidavit, a legal document containing the lender’s claim details in full, terms and conditions, the money you owe, payment details and the interest rate.

Opportunity 4
There will normally be three people at your hearing; you, the judge and the lender’s solicitor. The judge will hear full details from both sides before deciding what to do. Use your house repossession rights! Here’s your fourth opportunity to rescue your home. Now’s the time when the judge gives you the chance to pay what you owe, or suggest new ways to repay it.

Opportunity 5
If the court adjourns (delays) your hearing, they usually delay for four weeks.  Another important aspect of your repossession rights, this gives you a golden chance to sell your home yourself and make the most money possible. If you’ve already begun the sales process it’ll help your case, for example if you’ve had a cash offer for your house.

Opportunity 6… your last chance
Suspended repossession, where you agree to repay your arrears to a specific schedule, is your sixth opportunity. If you can make the repayments on time and in full, you stand a chance of hanging onto your home using your house repossession rights.

If the judge eventually decides to agree repossession, the court will set a date for you to leave your home. If you miss this or refuse to go, the lender will apply for a bailiff’s warrant. Then the bailiffs will write to tell you the eviction date… and there’s no negotiating with bailiffs.

You have house repossession rights. Used wisely, they can save your home. Visit HMCS website (Her Majesty’s Court Services) at hmcourts-service.co.uk for more information and full details of your repossession legal rights.

Maybe you have had different advice?

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What happens with voluntary repossession?

This is when, as a last resort, you simply hand over your keys without going to court. Your lender might even suggest this to you if they think it is unlikely you’ll be able to repay your arrears.

Voluntary repossession can seem like an easy, stress free solution at a glance. But your debt will probably grow as a result. And lenders will be very reluctant to lend to you in the future. Think twice… if you’ve already decided to hand your keys in, you might still have time to find a better option.

You still pay your mortgage after voluntary repossession

Voluntary repossession doesn’t solve everything. Even though you hand in your keys, you still have to pay the mortgage until your home is sold. You also have to pay for somewhere else to live while things are being sorted out. Because it might take some time for your home to sell, the amount you owe can go up dramatically while you wait. Your lender will use the money from the voluntary repossession sale to pay all sorts of things:

* If you have an interest only mortgage, there’s your endowment policy or ISA payments
* At least six weeks’ worth of Council Tax
* The capital that you borrowed in the first place, plus the interest you owe
* Buildings insurance
* Your arrears
* Penalty charges for missed mortgage repayments

For more voluntary house repossession facts:

DCMoney.co.uk and MoneySavingExpert.com

Low sale price

Remember if you go for voluntary property repossession your lender probably won’t get as much money for your home as you would if you sold it privately. Lenders often accept quick-sale offers considerably lower than the market value. And properties sold at auction often sell for much less than they’re worth.

Beware of Mortgage Indemnity Guarantees

Not many people are aware that while a Mortgage Indemnity Guarantee pays off the difference between the property’s value and your mortgage, the insurance company will probably take legal action to get the money back from you. Even after the property is sold!

Don’t forget to factor in extra costs and fees

Usually you’d have to repay any ‘reasonable’ costs that your lender has paid on your behalf. This includes estate agency and auctioneer’s fees as well as bills for essential repairs.

Capital Gains Tax

The final insult? If the property’s value has gone up since you bought it and it isn’t your main home because you’ve rented it out, you’ll probably have to fork out Capital Gains Tax for voluntary house repossession.

We would like to hear from anyone who has any experience with voluntary house repossession.