Repossession

If your mortgage arrears have built up over a period of time your lender may decide to take action to repossess the property. If your property is repossessed and is sold, the lender can reclaim any money you still owe.

If you fear that you will not be able to pay your mortgage, we suggest that you speak to one of Newham's advice organisations. They may be able to provide you with the help you need to get back on track.


Possession Proceedings

The exact procedure followed by your lender depends on whether your loan is regulated by -

• The Consumer Credit Act 1974 or
• The Administration of Justice Acts 1970 and 1973.

However, it is likely to be as follows:

• Standard arrears letters are sent after the first or second missed payment inviting the borrower to bring the account up to date or contact the lender to discuss any difficulties you might be having in meeting the mortgage payment.
• A strongly worded letter is sent advising you that the account is seriously in arrears (usually at least 2 months) and that, unless the arrears are cleared or you make contact within 7 days, the case will be passed to your lender's solicitors.
• A letter is sent by your lender's solicitors demanding that the arrears are cleared in full within 7 days and advising you that possession proceedings will commence without further notice if you fail to clear the arrears or put forward an acceptable proposal.

Possession Summons

A possession summons will be issued by the County Court advising you of the place, date and time of the possession hearing.
The summons should include:

• A 'particulars of claim' detailing the size of the loan, the arrears outstanding and the mortgage balance.
• Details of all payments required and their nature (for example interest, insurance)
• Details of the payments that you have missed
• Any information your lender has about your circumstances, in particular, details of welfare benefits in payment.

If the information is not provided, proceedings should be adjourned until the information is available.

Once the summons has been issued, your lender must send a notice to the address of the property. This must be addressed to 'the occupier' and it must be sent not less that 14 days before the hearing date. The notice must show:

• That possession proceedings have been taken in respect of the property.
• The name and address of the lender, borrower and the court.
• The case number and the hearing date: this is used to notify you that your lender wants to repossess your property.

Responding To The Summons

• You must respond to the summons no later than 21 days after it was posted (as shown by the postmark).
• If you seek advice later than 21 days from receipt of the summons - the enclosed 'form of reply' should still be completed.
• If the hearing date is close, the 'form of reply' should be sent to both the court and the lender (or lender's solicitor).
• The form of reply (N11M) is more straightforward than it looks. It asks for details of your personal and financial circumstances and asks you to make an offer to repay the mortgage arrears on top of the current installments.

Possession Hearing

The judge will consider the reasons for the arrears and will want to know if you are going to be in a position to meet the ordinary monthly installments and clear the arrears within a 'reasonable period'.

Most District judges will try to avoid making an outright possession order if there is any possibility that it can be avoided. There are various alternatives available to the District Judge as follows:

• Case dismissed
• Case adjourned
• Possession Order
• Suspended Possession Order

The Warrant of Possession

If the possession is given outright - or the terms of a suspended possession order are not complied with - the lender's solicitors can apply to the court, without informing you, for a warrant of possession. The warrant will then be passed to the bailiffs.

The bailiffs will inform you, in advance, of the time and date of the eviction and will visit the property to execute the warrant.

You should only hand back your keys as a last resort. Seek advice before doing so. If you subsequently make an approach to the Council for re-housing you may be considered to be intentionally homeless and not eligible for assistance.