Repossessed Homes

Property repossession may possibly be one of the most stressful and traumatic events that one might go through. The constant pressure from the bank or the lender to pay your mortgages and arrears can cause emotional and physical distress to you and your family. According to recent figures, the UK property repossession rate has almost tripled since 2006. For 2009, a total of 46,000 homes were repossessed in UK alone. Thousands of families are left without a home and are facing a huge financial dilemma. Often, homeowners are simply not able to make payments as a result of losing their jobs or a change in personal circumstances. Indeed, the current global recession the whole world is experiencing has a lot of repercussions and no one is exempted. If you are a homeowner and believe you might inevitably face this problem, it is important to know the process of property repossession. This is so that you know your options and you can make informed decisions.

Before anything else, it is important for any homeowner to know when he is in trouble. Some people might wait after they have missed a few payments before getting in touch with the bank or the lender. It is always best to face the problem head on. Delaying to get in touch with the bank will only cause bigger problems. Currently, banks are even more vigilant of a borrower’s payment history due to the increased number of clients falling behind their mortgages. If you are not able to make payments, contact the bank and let them know of the situation. If you have a good credit history, some banks will even be willing to arrange special payment options to avoid your property from being repossessed.

If in case you have failed to come to an agreement and you are still not able to pay your mortgages and arrears, the next step the bank will take is to send a demand letter for payment. If after being sent a demand letter for payment and you are still not able to settle your outstanding balance, you will be required to attend repossession proceedings in the court. It is always best to diligently attend repossession proceedings as your regular attendance to these hearings will be taken positively. Hopefully, the court and the bank or lender will see your desire in settling your debt and a special agreement or a Suspended Order for Possession can be ordered by the court. If one does not attend these proceedings, this will be taken against you and the court will have no choice but to rule in favor of the bank and order your property’s repossession.

At this point, a bailiff will be sent to your house or property for lock up. All hope is not yet lost. You can still try to negotiate payment to your bank or your lender. If in case you can pay off your monthly mortgage and arrears, then the bank might postpone the foreclosure. Another option is to remortgage your house with another bank rather than letting it get repossessed. If your house is worth more than your outstanding balance, there are banks that will be willing to remortgage it. Alternatively, you can sell your house on a cash basis but the resell price might not be as high as the market value. However, selling your house will allow you to pay off your debts and can clear some of your bad credit history. If in case you are unable to remortgage or sell your house, the bank will repossess it and will sell it in a repossessed home auction. The bank will recover its losses by selling your house in an auction even if it is only for a bargain price.

Certainly, no one would ever want to go through property repossesion. But it is important to know what to do if in case it would happen to you so that you can make wise and informed decisions. The important thing is to take responsibility and action before it is too late. Never ignore your lender and hope the problem will go away, the more you communicate with them, the less chance your home will be repossessed.