Tips Following Home Repossession
If repossession takes place, remember that you are still liable for ongoing costs
on the property. Mortgage interest, legal fees, estate agents fees etc, all accrue
until sale by the lender.
When the property is sold, the sale proceeds will go to clearing the lenders mortgage
account. Any surplus funds will be repaid to you. However, any shortfall is still
your responsibility and lenders have up to 12 years to recover this from you (5
years in Scotland).
You should therefore not wash your hands of the property. Take measures to ensure
that it is sold quickly and for the best price.
The Council of Mortgage Lenders have provided a code which lenders must adhere to
in order to be able to claim any shortfall from you. A recorded delivery letter
must be served within 28 days of re-sale. This should contain details of:
- The date of the mortgage deed under which the power of sale was exercised.
- The address / description of the property
- The name / address of the vendor
- The name / address of the purchaser
- The sale price for the property
- Whether the sale was by private treaty or public auction
- The completion date of the sale
Lenders are under a duty to realise the full amount for the property - however,
because they also have a desire to clear their account / arrears as soon as possible,
there is a risk that the property will be sold under value. This will be at your
expense.
Prior to repossession, you should secure two independent surveyors valuations or
sales particulars from estate agents, including the asking price.
You should then take the following steps:
- Do not trash the property or leave it in a messy / unclean state. Treat the property
as if you were trying to sell it yourself for the best price. Every extra penny
you get will be to your future benefit.
- Make an enquiry with the lender to confirm the date that their estate agent was
instructed (if you think the agent is unsuitable - for example they are not local-
or they specialise in a different sector of the property market, tell the lender
in writing)
- Make sure a 'For Sale' sign is put up, and if the agent has a web site - that
the property is listed.
- Call at the agents to ensure that it is listed and leaflets are available. Check
to ensure that it is correctly described.
- Make sure the agents include wording such as 'Available for Immediate Occupation'
and 'No Vendor Chain' to stimulate interest
- If the listing price is way below value, set out your concerns in writing. Note
- do not demand that the property be listed at an unreasonable level, especially
in a cool housing market - it will take longer to sell, and your liability for mortgage
interest will simply increase.
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I was very impressed with your clearly stated up front information. Having then decided to go with your company, I found your office staff kept me well informed on the sale progress and readily answered any questions that arose. The sale went through quickly. My financial situation was greatly improved. Being able to stay in the same house as a tenant has also saved me from all the stress there would have been with moving house. I have been so impressed with the service that I have already recommended it to a number of friends. I am very thankful for your service.
Tara, Durham.
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