Repossession Laws

(1) Where appropriate, the required regulatory information sheet or the National Homelessness Advice Service booklet on mortgage arrears; and

(2) Information concerning the amount of arrears, which should include –
a) The total amount of arrears
b) The outstanding balance of the mortgage or the home purchase plan; and
c) Whether interest or charges will be added and if so and where appropriate, details or an estimate of the interest charges that may be payable.

1.2. The parties should take all reasonable steps to discuss with each other, or their representatives, the cause of the arrears, the borrowers financial circumstances and proposals for the repayment of the arrears (see 7.1). For example, parties should consider whether the causes of the arrears are temporary or long term and whether the borrowers may be able to pay the arrears in a reasonable time.

1.3. The lender should advise the borrower to make early contact with the housing department of the borrowers Local Authority and should, where necessary, refer the borrower to appropriate sources of independent debt advice.

1.4. The lender should consider a reasonable request from the borrower to change the date of regular payment (within the same period) or the method by which the payment is made. The lender should either agree to such a request or where it refuses the request, it should, within a reasonable period of time, give the borrower a written explanation of its reasons for the refusal.

1.5. The lender should respond promptly to any proposal for payment made by the borrower. If he lender does not agree to such proposal it should give reasons in writing to the borrower within 10 business days of the proposal.

1.6. If the lender submits a proposal for payment, the borrower should be given a reasonable period of time in which to consider such proposals. The lender should set out the proposal in sufficient detail to enable the borrower to understand implications of the proposal.

1.7. If the borrower fails to comply with an agreement, the lender should warn the borrower, by giving the borrower 15 business days’ notice in writing of its intention to start a possession claim unless the borrower remedies the breach in the agreement.

Postponing the start of a possession claim

2.1. A lender should consider not starting a possession claim for mortgage arrears where the borrower can demonstrate to the lender that the borrower has:

(1) Submitted a claim to-

a) The Department for Work and Pensions (DWP) for Support for Mortgage Interest (SMI); or
b) Any insurer under a mortgage payment protection policy; or
c) A participating Local Authority for support under a Mortgage Rescue Scheme and has provided all the evidence required to process the claim

(2) A reasonable expectation of eligibility for payment from the DWP or from the insurer or support from the Local Authority; and

(3) An inability to pay a mortgage instalment not covered by a claim to the DWP or the insurer in relation to a claim under paragraph 6.1 (1) a) or b)

2.2. If a borrower can demonstrate that reasonable steps have been or will be taken to market the property at an appropriate price in a accordance with reasonable professional advice, the lender should consider postponing starting a possession claim. The borrower must continue to take all reasonable steps to actively market the property where the lender has agreed to postpone starting a possession claim.

2.3. Where the lender has agreed to postpone starting a possession claim the borrower should provide the lender with a copy of the particulars of sale, the Home Information Pack (where relevant) details of the purchase offers received within a reasonable period of time specified b the lender. The borrower should give the lender details of the estate agent and the conveyance to communicate with the lender about the progress of the sale and the borrowers conduct during the process.

2.4. Where the lender decides not to postpone the starting of a possession claim it should inform the borrower of the reasons for this decision at least 5 business days before starting proceedings.

3. Alternative dispute resolution

3.1. The court takes the view that starting a possession claim is usually a last resort and that such claim should not normally be started when a settlement is still actively being explored. Discussion between the parties may include options such as: