Repossession
Repossession is the ultimate nightmare for homeowners who are facing money problems, and the prospect of losing your home is probably one of the most stressful things for people with problem debt.
Despite the stories you'll have read about the numbers of repossessions being on the rise, it's still a fairly rare thing to happen. The average number of repossessions over the long term is around 30,000 a year, although in recent years the figure is closer to 10,000.
Mortgage lenders are very keen to avoid turfing people out of their homes - it's an expensive process, they'll miss out on years' worth of interest payments, and it's not great for public relations. There's also the simple fact that mortgage companies are actually staffed by real people who will sympathise with your situation and will usually help you to try and find a way out of your difficulties if possible.
That being said, the prospect of repossession should be taken seriously. What does it involve, and what can you do to avoid it?
The Repossession Process
Repossessions must follow a legally defined path, and it is not a particularly quick process. You will usually get an eviction order around six months after you fall into arrears, if you continue to miss payments and don't come to some arrangement with the lender to halt the proceedings. Even though any situation that threatens repossession is serious, these months do in fact give you time to get help and advice before it gets too late to avoid eviction.
The process will follow this pattern:
Lender's Initial Letter
The first stage of the process is when, after you've missed a payment, a letter is sent to you telling you that your account is in arrears and asking you to contact the lender to explain how and when you intend to clear the arrears.
If the lender isn't satisfied with your response, or if your arrears continue to grow, a second letter will be sent warning that unless the situation is resolved the matter will be passed to the lender's solicitors.
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