Huw Worthington advises those finding it difficult to meet mortgage repayments and having concerns about losing their home.
First and foremost, it is important that you don’t ignore any payment problems.
Mortgages are considered ‘priority debts’ which you should pay off first as your lender could potentially repossess your home and sell it to get their money. Your lender has to follow certain steps to ensure that your home is repossessed only as a last option. These steps are outlined in the ‘pre-action protocol.’ The pre-action protocol sets out what you and your lender should do before your lender takes action to repossess your home and applies to most residential mortgages. At a court hearing, both you and your lender will need to prove that you have followed the protocol.
Your lender must:
• Notify you about what you owe and any charges you’ll have to pay on your debt.
• Consider any reasonable request from you to change the way you pay your mortgage
• Respond to any offer of payment you make
• Give you their reasons for turning down your offer of payment within ten working days.
If you don’t keep to any agreement that you make with your lender, they have to warn you in writing that they plan to initiate court action. They should send you a letter that gives you fifteen days notice of the action they plan to take. A number of situations can arise where your lender may consider postponing a repossession action against you. These include but are not limited to: making a claim on you mortgage payment protection policy, if you feel your lender has treated you unfairly you may be able to make a claim against them to the Financial Ombudsman Service, or you could take steps to sell your home.
Huw Worthington is a Senior Partner with Worthingtons Solicitors and is head of the Private client and the Residential property departments. If you would like further advice on these matters, contact Worthingtons Solicitors, we would be glad to offer our assistance and discuss any concerns with you.
This article first appeared in the Spectator newspaper.