What Happens After House Repossession?

What Happens After House Repossession?

If you’re in mortgage arrears and are expecting your house to be repossessed, you’ll naturally want to know what happens after a repossession order is issued. The repossession process can be stressful and unsettling for everyone involved but understanding how the procedure works and what your rights are will mean that you’re prepared for the future.

What’s more – having detailed knowledge of the repossession process also gives you an opportunity to stop the repossession if you want to stay in your home.

How Does the Repossession Process Start?

If you breach the terms of your mortgage agreement, the lender can initiate the repossession process after 90 days. You might miss a mortgage payment or pay less than you owe, for example, which could trigger the repossession process.

However, repossession must be a last resort for lenders, so it doesn’t happen straight away. In most instances, mortgage lenders won’t start the repossession process until you’ve missed at least three repayments. During this time, negotiating with the lender and explaining your circumstances can help to stop house repossession. Your mortgage lender may give you more time to clear the arrears, for example.

What Happens When a House Is Repossessed?

If your mortgage lender plans to repossess the property, they will need to apply to court for a repossession hearing and ask a judge to issue a possession order. This gives them the legal right to repossess the property, at which point you’ll be instructed to leave your home.

However, there are different types of repossession orders and the type issued by the court can determine whether you’re permitted to stay in your home while the repossession process is ongoing.

Outright Repossession Order

An outright repossession order gives the mortgage lender the right to proceed with the repossession process straight away. Often, an outright possession order means an eviction notice will be issued relatively quickly, so you may have to leave your home and find alternative accommodation in a short space of time.

Suspended Possession Order

A suspended possession order effectively delays the process or puts it on hold, thus giving you an opportunity to remain in your home and even prevent the repossession from taking place. If you’re able to show the court how you plan to repay the outstanding arrears and continue making mortgage payments, for example, the judge may issue a suspended possession order.

If you breach the terms of the repayment agreement set out by the court, your mortgage lender will be able to apply for an eviction notice straight away. However, if you stick to the agreement and clear the arrears, you’ll be able to stop your home being repossessed.

House Repossession: What Happens After?

If your home is repossessed, the mortgage lender will want to recoup their funds as quickly as possible and avoid any further financial losses. This means they are likely to sell the property fairly quickly. In some cases, a mortgage lender will use an estate agent and put the repossessed property on the market, but they may decide to put the property up for auction to achieve a faster sale.

However the lender sells your home, the costs associated with the sale will be added to the amount you already owe. This means that the repossession process can actually increase your debts by a considerable amount.

Will You Be Evicted?

If the lender obtains an outright possession order, they are likely to ask the court to evict you also. If the court agrees, they will issue an eviction order which will set out the terms by which you’ll need to leave your home. This means you’ll need to leave the property by the date given in the order, unless you successfully apply for a suspended eviction order.

Even at this late stage, it’s not too late to stop an eviction and suspend the repossession process. By submitting an N244 form and securing an emergency hearing, for example, you can obtain a suspended eviction order. If you can then show the court that you’re able to make repayments and clear the arrears, you may be able to remain in your home and stop the property being repossessed altogether.

Do You Receive Any Funds from the Sale of Your Home?

When a property is repossessed and sold by the mortgage lender, the funds will be used to pay off what you owe to the mortgage lender. Remember – this will include any additional costs that have been incurred due to the sales process and any charges that were applied to your account when you went into arrears.

If there are any funds remaining once the mortgage lender has been repaid, these will be returned to you. So, it may be possible for you to recoup some of the funds tied up in your property after the repossession process is complete and the property has been sold.

However, it’s possible that the property will be sold for less than you owe, depending on the property’s value and the final sale price. If so, you will still owe the outstanding amount to the mortgage lender. Although the lender has the right to reclaim these funds from you, they may choose not to. Generally, a lender has up to six years to reclaim these funds or to instruct a debt collection company to act on their behalf.

Are You Facing House Repossession?

Now you know what happens after your house is repossessed, you’ll be eager to find out how you can keep your home and stop the repossession process in its tracks. Fortunately, there are many ways to prevent your home from being taken from you.

At HomeKeep Solutions, we specialise in helping families keep their homes. Our team of legal experts have in-depth knowledge of repossession law, the court process and mortgage regulations, which means we’re well-placed to provide all the help and assistance you need.

It’s never too late to stop a repossession. We’re available 24/7 and we’re always happy to help, so contact HomeKeep Solutions now to find out how we can help you save your home.