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Mortgage Arrears and Repossessions <
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Mortgage Arrears and Repossessions
Freehold and Leasehold owner occupation is often subject to a mortgage. The mortgage deeds are complicated legal documents and usually state that when the occupier falls into arrears with the repayments, the lender has the right to evict the occupier and sell the property.

The lender will normally issue a formal demand for any arrears to be paid before commencing legal proceedings although they are not obliged by law to do this. It is however regarded by the Court as good practise to give the occupier a chance to bring their arrears up to date.

The occupier can only be evicted with an Order for possession from the Court. The Court is not obliged to grant the possession immediately and can grant a suspended order for possession in certain circumstances. One circumstance where suspension would be appropriate could be where the occupier agrees to pay current instalments and also an instalment plan to settle the arrears.

This discretion is only usually exercised if the Court feels that the arrears can be cleared in a reasonable time. If this is not considered likely then the order will be final.

A formal definition of reasonable time is not contained in any statute, although the courts normally consider one year a reasonable time in which to clear the arrears.
In addition to suspending a repossession order for an agreement re arrears, the Court does have discretion, to suspend, so as not to interfere with an agreed sale.
It is strongly advisable for an occupier experiencing difficulties in meeting mortgage repayments to inform their lender. A sensible proposal to pay off your arrears can often be worked out with your lender. You should remember that the lenders are keen to avoid the adverse publicity of eviction.

If your lender has elected to be subject to The Mortgage Code you may find it useful to review a copy of the code before contacting them. Links to this code of conduct can be found on a number of websites.