Repossessions & Evictions

Roy5085

Some may say that this is not a forum to discuss such topics. A taboo subject per say!. There are however, moneysavings ideas, help and advice that can be provided to those either potentially, currently or concluding experiencing home repossessions as we can see in earlier threads. It may be a good start for visitors to the forum to provide advice on each aspect they go through, such as court experience and discussions with the lenders leading to this.

A friend of mine was repossessed. She was 4 months behind in her mortgage due to sudden and unexpected illness disabling her from working. She did not have any insurance against such. She was 47 at the time and her children had just left home to go to university. She had a mortgage with the same lender (The Woolwich) for 15 years with an excellent repayment record. However, her doctor advised she could not work (and she could not in any case) for a period of 1 year. She had an offer to go back to work when she was medically fit again. She was up front with them all the way. There were holiday payments in her contract but as soon as they knew it would be a year or possibly more and the actual condition they refused to provide this.

She had equity but no real means now to support further borrowing.

In the meantime, her credit was impaired and following her default notices she was taken to court. She said it was the most publicly humiliating experience of her life.

Is protection insurance cost effective? Should she have had it? Were there other ways she could have staved off repossession (she was too ill to handle the matters at the time)? She didn’t know. Hindsight is a wonderful thing.

Do potential borrowers need to know what the repossession rate is of a lender before entering into a contract and do they ask how are possible future problems encountered dealt with in differing economic climates?

What questions should be asked?

By the way, she now has another mortgage and is on the mend and back to work but the experience overall has left a lifetime mark.

Joe_Bloggs

I'm glad that everything worked out in the end. It must have been very stressful to all concerned and not helpful to the recovery of the subject. I would like to know the answer to the value for money insurance question. Perhaps it is buried in the small print.
Can other creditors force the hand of a lender to repossess a property ? By this I mean if you always make your mortgage payments but become bankrupt/Insolvent ?
Lots of questions.
J_B.

cattie

What a bad experience for your friend to find herself in during the time she was unable to work. That's good that she is OK now & things are back on track for her with a new mortgage.

In my opinion mortgage protection insurance is essential, especially if you live alone & have nobody to help you out financially.

I'll be forever thankful that I'd had such cover when I became ill. You just never know what is around the corner & to have the 12 months cover that the insurance provides takes away the immediate threat of not being able to pay the mortgage & losing the roof above your head.

For the longer term sick or disabled it gives valuable time to try to work out a solution, be it downsizing, taking in a lodger or being able to return to work.

I can well appreciate how the whole experience has left it's mark on your friend & I hope she now has some kind of insurance against something like this happening in the future?

Joe_Bloggs

I found this link very informative.
http://england.shelter.org.uk/advice/advice-2901.cfm
Clearly it takes a judge to sign a repossession order for the process to succeed. The judge has numerous other options.
There is lots of help available from the http://www.nationaldebtline.co.uk/

From what I have seen it may be possible for your creditors (non mortgage) to try and make you bankrupt to get access to the equity in your home. Can a race exist in the case of a debtor with non mortgage debt between the official receiver and the mortgage company seeking repossesion ? Is the mortgage lender a creditor in these circumsances ? Do you the break terms and conditions of the mortgage by declaring yourself bankrupt and handing equity to the official receiver? It is a very complex world and seeking free advice, as soon as possible, from those with a proven track record is probably the best course.
J_B.

emmaHarris_2

How does page 10 of this document now compare to the reasons for todays rise in repossessions rates? Why are we seeing a huge increase today?

http://www.securitization.net/pdf/ukmortgage52302.pdf

Joe_Bloggs

I did not see the point other than some nonsense on mortgages becoming more affordable. What of first time buyers ? Secondly page 10 of the report highlights increasing legal costs. From the shelter document legal costs will be awarded against the debtor if the repossesion order is issued. The time for repossesion seems way off, 9 to 12 months of negotiation ? Perhaps if the official receiver is involved. Judges still have to issue these things. Are they making the wrong decision ?
J_B.

emmaHarris_2

UK mortgage repossessions peaked at
0.77% of mortgages outstanding in
1991 (Chart 9). Most UK lenders
seek to avoid the legal costs and other
expenses of taking possession of a
property. For seriously overdue
accounts, lenders attempt to negotiate
new repayment terms, such as
reducing monthly payments by
extending the loan. If these
negotiations are unsuccessful, a lender
will begin legal proceedings to
repossess the property. This legal
process is typically completed in nine
to twelve months. Repossessions have
steadily declined since their peak in
the early 1990s.

emmaHarris_2

Hi Joe,

In the sub prime they start at month 1 default and especially if the borrower has notified them responsibly of a possible future problem and they are not in a position to provide help of any kind and cannot or reluctant to change the terms of the contract to provide the help. Could this be partially to blame or contribute to today’s high rise in repossessions or evictions?

emmaHarris_2

For seriously overdue accounts, lenders attempt to negotiate new repayment terms, such as reducing monthly payments by extending the loan.

Does this happen in the sub prime? Or without them realising it are borrowers in the 'last chance saloon'? If the borrower has a history of mishandling their finances and become adverse borrowers then would there not be more reasons for the sub prime to provide exceptional over and above help in the future considering they lent the money to this typical group in the first place? Otherwise, it could be perceived as preying on the vulnerable with inevitable results. I am wondering why over the past 2 years repossessions have increased dramatically as today’s interest rates continue to be low but there has been a noticeable downward change in property price rises compared to the previous 3 years. Thus, equity in people’s homes has not increased as much as before. By lending against prime properties as oppose to affordability then there can only be one winner in this relationship and it is not the borrower.

emmaHarris_2

Clearly it takes a judge to sign a repossession order for the process to succeed. The judge has numerous other options.

Hi Joe,

I agree again with you it does take a judge to rubber-stamp it. As I described below though it most cases that’s what it is, just a rubber stamp. If you read the posts in the sub prime thread in this respect you can see why lenders can get away with it. It is not like a criminal court where the defendant can really have a say. It is a matter of fact 'feit a complete' in most cases.

Its a horrible experience just sitting in one of these courts as a bystander never mind someone actually going through it:(

emmaHarris_2

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Original Message

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From: XXXXXXX
Sent: 30 April 2006 16:27
To: mayor@london.gov.uk
Subject: Freedom Of Information Enquiry - Homeless - Causes & effects - Sub Prime Lending

Dear Mayor,

We have read with great interest your document: The London Housing Advice Strategy as seen here: http://www.london.gov.uk/mayor/housi...singadvice.rtf

Our enquiry:

In the first instance we would welcome your confirmation of receipt of this email and to which department/person (including contact details) will be handling our enquiries below by return email.

Background
Our interest stems from current research being carried in the UK Mortgage Industry and specifically within the growing sub-prime sector and the possible causes and affects that this may have on the UK society as whole and I hope that your office will be able to provide more information and advice accordingly.

Your document above advises that “57% of the 3m separate households are ‘owner-occupiers equating to 1.7m possible mortgages”.

Your document continues to advise that:

“Around 10,000 mortgage borrowers in London face repossession orders each year. About 8,000 households in London are more than three months in arrears with their mortgage payments. About 10,000 outright possession orders are granted by county courts in London each year and at least 45,000 households face a possession order each year”.

The reported National figures advise and recognise that repossessions/evictions are at an all time high and has increased by 70% in 2005/2006. The Council of Mortgage Lenders report as of July 2005 that there were 10,000+ UK wide - http://www.cml.org.uk/cml/statistics .

The Daily Mail (for example of many of the Media) reported on Wednesday 05 February 2006 on page 5, as part of an article regarding Mr Ian Beech (who sadly took his own life because of being placed in a repossession situation) the same figures (albeit them being out of date).

The figures therefore become confusing, as does the reality of the current actual Mortgage repossessions and evictions rates being carried out today. As such, your own figures become disproportionate to the National figures even comparing to 2004, the date of your data.

1. Your comments are welcome in regard to the differencing and varying figures?
2. What basis have your figures been applied from and sources?
3. What are the London statistics for (a) 2004-5 & (b) 2005-2006 to date?

We are sure that we do not need to fully explain the real affects on individuals, families and communities experiencing home repossessions. We also realise that there are those who are probably more deserving of this action than others. We are sure also that the social-economic factors of repossessions/evictions are fully realised by County Councils throughout the UK and of course the real & sometimes high costs to the tax payer of picking up the pieces as a result of these actions.

We fully understand lenders that in both markets, different lenders will have their own and varying criteria’s set in regard to when and at what point/stage should repossession action be taken. It is commonly understood that repossessions/evictions should only be instigated as a very last resort, where an agreement between the lender and borrower cannot be reached.

However there is an escalating debate and/or argument in England & Wales and Scotland in that the Sub Prime Market Lenders are by way of their business modules & practices could now be having a severe and serious economic and social affect in the UK and regional communities. Indeed as this high growth market continues, be a high contributor to the costs of re-housing and other social services. It is only when these operations are further scrutinised in more detail an awareness of the real impact becomes apparent.

Repossession Statistics:

1. Do not include sub prime lenders
2. Do not include the increasing Special Purpose Vehicles/Subsidiary Company’s created specifically to managing/administrating mortgage portfolios (although these are legal entities that legitimately apply for repossessions and evictions in their own rights and parent companies are not identified)
3. Scotland is taking the lead and has started to incorporate some sub prime lenders repossessions but still does not go far enough
4. Sub Prime Lenders are aware of the current reporting status
5. Repossessions/evictions of borrowers in the Sub Prime market are much faster implemented (proceeding start at month 1 default) than Prime market

There are reasons other than the perceived understanding that this market will rush towards repossessions/evictions much quicker due to the nature of the borrower.

Our continued research & findings show that there are alternative reasons based predominantly on commercial interest. Once the business module & practice is analysed in more detail then it can be recognised fully the true extent of the balance between the borrowers interests, lenders interests, and social impact. Considering also the now mixed nature of the borrower from Prime (no adverse credit), Near prime (1 x CCJ in last 6 years under £2000) and extreme sub prime (multi CCJ’s etc).

Although this is not the time to provide our full findings supporting our belief to date that, the sub prime has and continues to have a discreet but substantial impact on society, our first priority is to establish the true nature of today’s repossession & eviction figures and evolve the debate further. It is however evident that the true status of home repossessions and evictions are not being reported

We have written and been in discussions with:

HM Treasury
FSA
CML
FOS
Her Majesties Court Services
Office of National Statistics
The Department of Constitutional Affairs
Consumer Groups

Please find below a list of questions that have been asked: We would be obliged if you can respond in details (without generalisation) to each also considering your reported statistics in your document referred above: (Please regard and adapt for LONDON)

In England & Wales:

Statistics for: Repossessions and Eviction Orders (including repossession
applications versus actual evictions figures)


1. Who is responsible for the collection and collating of mortgage repossession orders & evictions statistics?

2. Where can we find 'up to date' information for the above?

3. Is this information available from any 'body' or 'organisation' broken down by County or Region?

4. Is this information available from any 'body' or 'organisation' broken down by lender?

5. Where can consumers for example find information on a lenders repossession and eviction rates per annum?

6. Is there a responsibility of a 'body' or 'organisation' that carries out the collection and collating of these figures to report to The HM Treasury/Government?

7. How often are the statistics collated and published?

8. Where can these statistics be found and how up to date are they?

9. Are statistics collected and collated for all Prime Lenders (mortgage providers/lenders)?

10. Are statistics collected and collated for all Sub Prime lenders, originators of loans, (before securitisation and whole loan sales are implemented) and those who retain and administer the mortgage portfolio? Such as Kensington Mortgages for example?

11. Are statistics collected and collated or include all subsidiary companies, SPV's created to administer only mortgage portfolios purchased through securitisation or whole loan sales and FSA authorised as 'lenders' but do not extend further lenders or originate loans but have the ability to claim for repossessions and evictions in County Courts? For example only: Redstone Mortgages, (Mortgage Agency Number Six & Seven (MAS 6 & 7) (Britannia Subsidiary)?

12. Are the above (11) calculated in the figures of any parent company, as it seems they are not recorded as such on county court documentations?

13. As the creation of legal subsidiary company's/entities are increasing, to accommodate for the administration of mortgage portfolios only, and have the ability and company legal stature to instigate court repossessions and evictions (due to the increase in sub prime lending in recent times/periods) but are not originators of mortgage loans or provide any further advances so as not to change the contractual relationship, but again FSA authorised as 'lenders'… Are there any plans for a 'body' or
'organisation' to commence recording figures of this nature to be incorporated into current reported statistical figures, if they are already not being reported?

14. Are current reported repossession figures in the media accurate considering the above?

15. Does the HM Treasury have a responsibility to ensure that all statistics are repossessions and evictions are accurately recorded and published?

16. Where can year on year, quarter on quarter comparisons be found by: National, regional and/or county?

17. Could you provide contact information for each county/region so as to request statistical information by lender and dates?

18. Is this information freely available through any entity on enquiry being made or it is subject to any confidentiality?

19. If 'statistics by lenders' are not available are there any plans to introduce this going forward?

20. Does Her Majesty's Courts Service collate all statistics by county/region of this nature and report this information periodically to a 'body' or 'organisation'?

Statistics - Mortgage Lenders - Market Share

1. Are up to date statistics available to ascertain the market share of UK lenders of residential mortgages?

2. Is there any information available to provide information of the size and market share of sub prime lenders, SPV portfolio sizes?

3. Where can these statistics and information be found?

4. How often are these updated?

We look forward to hearing from you and we would like to thank you for your valuable time and serious consideration to supporting our enquiries. We in turn will only be too happy to share our research and findings with you in due course. Our aims are to evolve the process and debate and to ensure that a fair and balanced relationship is secured.

Kind Regards,

Address & Contact Details supplied