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How to fight repossession for mortgage arrears

If you have received a letter from your mortgage lender, advising you that you are in arrears and are threatened with legal action, don’t be tempted to hand the keys in without looking into your rights. There are steps that you can take to improve your chances of keeping your home.

Step 1: Contact your lender

It is not in the lenders best interest to repossess your home. They will only do this as a last resort. Keep them informed about the problems you are having. They may be willing to allow you to pay interest only for a set period of time or reschedule payments in the short term.

If they hear nothing from you and you continue to miss payments they will repossess your home, so keep opening your post and keep in touch.

Step 2: Sort your money out

If you are unable to pay your mortgage, it is likely that you have other debts too. It may be that you paying other creditors more than you need to and not paying your mortgage. You may even be owed money that you have not claimed. See Thompsons Solicitors article on how to get out of debt.

Check to see if you have a mortgage indemnity policy and make a claim on it if you are eligible.

Step 3: Get some free representation and advice about the threatened repossession

There are plenty of organisations that can represent you for free.

The Community Credit Counselling Service
The National Debt Line
The CAB
Community Legal Advice
Shelter

Step 4: Go to the hearing

The judge will make sure that you get your say. Make sure that you have a financial statement. You need to be able to show the judge that you can pay the current payments and a small amount off the arrears each month. If the judge is convinced that you can do this, the repossession will be put on hold as long as you keep up with the payments.

If you cannot pay the current payments, it may be that you can persuade the judge to give you more time to find somewhere else to live. This is called a stay of execution.

Step 5: Beware of “Mortgage Rescue” schemes

Many of these schemes are doing no more than offering to buy your property for a lot less than it is worth and then rent it back to you for a fixed term. This may be for as little as 6 months. These schemes are not regulated in any way. You should take independent legal advice before agreeing to sell to such a scheme.

Further Information

Have a look at the Financial Service Authority’s leaflet on what to do if you can't pay your mortgage.

THIS FACT SHEET IS INTENDED AS A GENERAL STATEMENT OF THE PROCEDURE AND DOES NOT PURPORT TO RENDER SPECIFIC ADVICE, LEGAL OR OTHERWISE. SPECIFIC ADVICE ON A PARTICULAR PROBLEM SHOULD ALWAYS BE SOUGHT.

Last updated by EMW 16/07/2008