Post Repossession: A Practicals Guide

Norman1982

My brother’s house was repossessed 6 weeks ago. Lender confirmed yesterday that only offer they’d accept to allow house to be reclaimed would be full redemption of mortgage and this is not an option.

Family didn’t know about repossession until last week.

I’m trying at this stage to salvage something from all this. My brother defaulted so yes I agree he should’ve had property repossessed it just seems that now it has happened there is very little information given about what happens now.

Is it a case of interest and other charges will escalate and an estate agent is likely to market house relatively low and accept offer to a regular buyer for a kick back? So basically any equity in property likely to be eliminated?

From the little bit of research I’ve carried out it seems generally vulnerable people end up in this position and there is no protection to stop them getting taken advantage of by estate agents and lenders. Everything appears not transparent.

So what now.

1. I need (with brother) to confirm with Property section of Lender when he can pick up belongings.

2. Does my brother have a right to know when house will be marketed for sale?

3. How long is house usually marketed for? Will he be advised of the various viewings of the house and offers? Does he have a right to this information?

4. After how long does a lender decide to go to auction?

5. Will my brother be advised about repairs and maintenance costs to house?

6. Should he keep paying interest on mortgage which will continue to accrue? Or will this ultimately be a waste of time and he’ll end up with very little at end?

7. Should the family instruct a surveyor to value the property now independently so if estate agent’s value is very low it can be challenged?

8. Should we arrange viewings to ensure the estate agent is accepting viewings and not making things difficult?

Norman1982

Any advice from people who’ve been in similar situations would be very much appreciated please. Thanks in advance

davidmcn

Generally speaking, repossessions are marketed by estate agents in much the usual way. The lender has a duty to take reasonable steps to get the best price. If there's equity left (after deduction of all the lenders' expenses) then it comes back to the borrower. No, the lender is unlikely to be liaising with the borrower throughout the process, they're more likely just to advise what the final balance is after completion of a sale.

Bear in mind repossession usually comes after months of defaults, not suddenly as soon as you miss a payment, so borrowers who are vulnerable etc will have had an opportunity to make their case. What's the background, if there's a reasonable amount of equity in the property? Had your brother tried selling? If there are actual problems with marketability of the property then obviously the lender will have the same issues.

Norman1982

Thanks David and apologies for the duplicate post. Just all new to this.

Self-employed brother. A couple of customers kept promising to pay invoices £90k (large invoices) but didn’t materialise. Couple of contracts fell through so mortgage paid every few months. Again not challenging the lender or their approach to date I completely understand and agree with it.

ACG

If the property was repossessed, he no longer owns it. He does own the mortgage however.

The lender has an obligation to get as much for it as they can. Estate Agents can not just flog it to their mates. If the offers they are receiving are too low, it may go to auction in order to try and get more for it.

You say it only happens to vulnerable people, and whilst it probably does it also happens to people who stick their head in the sand. Repossession does not happen overnight, there are letters about arrears and next steps/outcomes for months and then it goes to court. If your brother had made an attempt to sell the property, the lender would have probably sat tight as you get more for a property that has someone living in there than you do a repossession.

- I do not mean to have a go, but I think it is important that you actually hear the truth rather than what your brother may be telling you.

2) No. He no longer owns the property.

3) Until an acceptable offer is received or it is clear that none will be received.

4) Depends on the above I suppose.

5) No.

6) If he doesnt, the interest becomes compounded and so starts to build up very quickly. If the house has plenty of equity in it, then yes. If it is in negative equity then you may find his next steps are going bankrupt. Difficult to say without knowing more.

7) You can, but they will not be able to gain access to the property. Do you also plan on spending what will be thousands of pounds taking a bank to court over the valuation if they sell for less? Their argument would ultimately be - we put it on the market and these were the offers received. You would be trying to effectively say the estate agents held back offers in order to sell it to their mate cheaply and there will be no record of it.

8) You can do.

bigisi

Duplicate thread:

https://forums.moneysavingexpert.com/discussion/6042362

To save people from offering the same advice he's already been given.