Repossession: A Practical 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?

Thanks in advance

Bermonia

To be honest you would be best seeking proper advice either from CAB or a lawyer.

In reality the property is no longer his so what the lender does with ‘their’ property is not entirely his concern, I presume the lender will have a department that deals directly with this I would recommend speaking with them to check their processes all lenders may be different.

My understand of the process from way back when was that repossessions used to be sold at auction... as such the value is what someone is willing to pay on the day, if this clears the outstanding debts and fees then any residual would be paid back to your brother, however if does not clear debt he would still be chased for the outstanding.

Norman1982

Thanks Bermonia. I’ll give CAB a call.

It’s a difficult one because absolutely he forfeited his right to the house and it’s now back with the lender but he is still on the hook for the debt and directly affected by how the lender and estate agent decide to manage that debt.

I really feel for families in this situation where kids are affected. This is huge. Can take years to come from this that’s why I’m so concerned by the lack of guidance on what people (who are in this situation) can do to be informed about what happens now.

It’s like they’re vulnerable anyway let’s (estate agent and lender) just pile it on as they’re (family be repossessed) unlikely to have any funds or appetite to challenge us.

Seems all very one sided.

I looked at auction properties in my area and a perfectly nice flat had a guide price of £95k. In brackets next to price it said another flat in complex sold for £166k. I know the £95k is only a guide and it could go higher but the photos didn’t show a dilapidated flat.

Confused and concerned.

lindens

whatever he might tell you there would have been months of correspondence with the lender before reaching this stage

Norman1982

Hi Linden thanks for response. Not seeking to challenge repossession just manage ultimate outcome now.

Spoke to CAB at length - they were very nice but there doesn’t seem to be practical help or advice out there on what to do now that the legal process has concluded.

Ie. Is there a protocol lenders must follow to inform you about fees, offers received etc are (as appears to be the case) you’re at their mercy now and if they want to escalate fees to eat up entire equity in property they are (realistically) free to do so.

davidmcn

I've replied on your duplicate post on the Mortgages board (gets confusing if you post the same thing on more than one forum so you might want to get them merged).

MEM62

Norman1982 wrote: »

Thanks Bermonia. I’ll give CAB a call.

It’s a difficult one because absolutely he forfeited his right to the house and it’s now back with the lender but he is still on the hook for the debt and directly affected by how the lender and estate agent decide to manage that debt.

The handling of this will be dealt with by the mortgage company. If an estate agent is appointed to dispose of the property that will be their only function. They have no involvement in the management of the debt and your previous suggestion that they would pass it off to a mate at a knockdown price is unrealistic. Either way, it is unlikely that an estate agent will be appointed as most repossessed houses are sold at auction.

I would also say that the mortgage company does not 'manage' your brother's debt as such. You brother borrowed money against an asset - the house. Having defaulted on the loan the company have taken possession of the asset and will dispose of it to recover their money. Having allowed it to get to this stage your brother no longer has a say in the process. Once sold, if there is any residual funds once the debt is cleared they will be returned to your brother. If there is a shortfall they will pursue him for it.

I really feel for families in this situation where kids are affected. This is huge. Can take years to come from this that’s why I’m so concerned by the lack of guidance on what people (who are in this situation) can do to be informed about what happens now.

I must be very stressful for all concerned, particularly as they have children. There will have been a lot of communication from the mortgage company on the issue. Your bothers rights would have been explained. It would also be prudent for him to speak to the CAB and Shelter, who will be able to offer useful advice.

It’s like they’re vulnerable anyway let’s (estate agent and lender) just pile it on as they’re (family be repossessed) unlikely to have any funds or appetite to challenge us.

You have alluded to your brother being vulnerable. In what way is he vulnerable?

Whilst it may feel that way, this not personal and the suggestion that the mortgage lender will be vindictive and make situation worse just because the family cannot fight back is unjustified. It may be understandable but you are looking at this purely from an emotional perspective and it is giving you an unrealistic view. You should also consider that repossession is absolutely a last resort for the lender. They would have gone to some effort with your brother to avoid this. Of course, there will be a lot of background to this that haven't seen so it is difficult to comment further.

Seems all very one sided.

I looked at auction properties in my area and a perfectly nice flat had a guide price of £95k. In brackets next to price it said another flat in complex sold for £166k. I know the £95k is only a guide and it could go higher but the photos didn’t show a dilapidated flat.

Confused and concerned.

It is laudable that you are trying to help but in terms of the repossession that ship has already sailed. You efforts should be best served in helping to brother to figure out where he goes from here.

davidmcn

MEM62 wrote: »

it is unlikely that an estate agent will be appointed as most repossessed houses are sold at auction.

In my experience, the vast majority are sold via estate agents in the usual way. Only the ones which would be more difficult to shift for some reason tend to go to auction.

Norman1982

Thanks David. I when I spoke to the Lender the other day they told me to phone their Property Department today for guidance. She said that I shouldn’t expect the property to be auctioned when I asked when it would go to auction.

Does anyone know how long they give you to remove your furniture please? Does it vary by lender or has the ombudsman decreed 2 hours or a day?

BoGoF

Surely after 6 weeks your brother has tried to arrange collection of his belongings?

davidmcn

Norman1982 wrote: »

Does anyone know how long they give you to remove your furniture please? Does it vary by lender or has the ombudsman decreed 2 hours or a day?

Not aware of any guidance about it. In principle you'll have had sufficient advance warning of the date of eviction so you shouldn't need to be going back to fetch things anyway. It will need to be supervised and I doubt whoever is doing it will want to hang around all day, so you'd be best to assume it will need to be a quick visit.