Huw Worthington advises on what options are available to home owners when they are in financial difficulties and their mortgage is in arrears.
The first thing you should do is approach your Lender and explain your difficulties.
Issuing Repossession proceedings can be expensive for the Lender particularly if there is negative equity and so they should be prepared to discuss your financial difficulties with you.
Some Lenders seem to be adopting a tougher approach than others, particularly those Lenders who lent under the banner of “self certification”, and unfortunately restructuring a loan can be very difficult.
A recent successful case brought by Housing Rights Service resulted in the first “Time Order” being granted in Northern Ireland. The Borrower owed £9,000 but had lost his job due to the economic downturn. He paid what he could and despite trying to negotiate a restructuring of the loan, possession proceedings were initiated by the Lender. In granting a Time Order the Master considered all the circumstances in the case. He referred to guidance set out in Southern and District Finance –v- Barnes (1996) FCR 679 and factors such as the relatively low sum owed (£9,000), the borrower’s employment, his poor health and most importantly that there was nothing to suggest that it was his fault or that his intentions were not honorable or realistic.
In addition in the Barnes case the Lender would have received no financial benefit from selling the property. The scope of a Time Order is wide – the Court may amend the Loan Agreement, extend the term or alter the rate of interest.
A useful phone number to ring if you are in a similar position is 0300 3230310: the Housing Rights Service Mortgage.