Repossession Ban!

Newbie_John

Time for hard decisions here. Deciding not to pay the mortgage without agreeing it with a bank is definitely not the right choice.

If by any means, the can't afford the mortgage then they're living above their means and time to face reality and downsize/relocate.

Not paying mortgage is not really just delaying the problem, it's actually causing an even bigger problem they're already in.

MWT

luckylucy1977 said:

However  she is convinced there is a repossession ban for 12 months

Shame she focused on that part instead of the advice to talk to the lender, see if there are alternatives like extending the term, going interest only for a while or taking a short agreed payment holiday...

Just not paying is the worst possible choice, and just makes it even more likely that they will eventually end up with a repossession as the interest and capital they are not paying will be building up along with the lenders costs as they chase them for payment and eventually go legal...

luckylucy1977

Thanks for your comments all. You have been very helpful. I am not going to help anymore as horrible as that sounds but I can’t afford to keep doing it. I understand the 12 month situation now thanks to your explanations. Superstars 

Herzlos

I've seen a few statements from banks saying that people on the standard rates won't have their payments increase (it'll just take longer to clear up). Are they on the standard rate of a fixed rate deal that's about to expire?

Their first port of call should be to contact their mortgage provider to negotiate another deal, ideally stretching the term to bring the payments down.

Then they should look and see if there's any scope to downsize. It's probably not ideal with 3 kids, but having kids share rooms or an adult sleeping on a couch for a while is better than being homeless.

Stopping making payments is going to cause them a world of financial ruin even if they don't get evicted for a while. The bank will put all of their costs on them - the late fees, the legal bills, the eviction, any shortfall after the house is sold. They'll be MUCH better off selling privately.

PixelPound

ACG said:

There is not a ban as such, they can still start the repossession process and go to court, get the order etc - they just cant physically evict you for 12 months (but I think you have to be up to date with your mortgage up until around the 15th July - dont hold me to that though).

These announcements by the government are nothing but smoke and mirrors. 

There is very little new in there. Realistically if you stopped paying today, it would probably take around 12 months before eviction took place anyway - by the time enough arrears, it went to court and bailiffs were in place. 

On a side note, your sister will also incur legal costs, late fees, fines etc and you would be amazed at how quickly the interest racks up when it is not being paid. 

She would be better defaulting on any loans/credit cards and then setting up a payment plan on them. The one bill you do not want to get behind on is the roof above your head (and council tax). 

If they have no debts and are genuinely just struggling to get by they need to downsize/downgrade. Accruing mortgage arrears is the worst thing to do. Downsize on your own terms not when you are 2 months in arrears or more. 

But I agree with the other comments, keep your money. Its safer in your hands. You can lead a horse to water and all that. 

It doesn't surprise me that the government announcement doesn't really extend the period (unless they can't start eviction e.g. court paperwork before then), but it will get people thinking it's an easy option, when far from reality.

There will be a point of no return, so missing payments does not mean it's easily reversable, plus the extra interest and any charges will increase the amount needed to get back on track (plus legal fees once the process starts). No guarantee the financial situation will be any better in a few months either.

I agree mortgage and council tax are the two bills they want to keep up with, if they can. Unsecured debts like loans and credit cards are the ones to sacrifice, if you have to. You might scupper your credit worthiness if you get a bunch of defaults, but you still have your home. 

During covid I knew some who were taking "payment holidays" so they didn't have to cut back on lifestyles. I'm not saying the OP's sister is doing similar, but if she's thinking for a couple of months, then really she needs to get debt advice. She could ask for 60 days breathing space on all her non essential bills, even now opt for the interest only mortgage agreement and once she's got advice sorting a way forward and out of the hole they feel they are in.

penners324

Is their mortgage fixed? If not why not?

Stopping paying the mortgage will scupper any chance of them getting a fix

FashionHeart

luckylucy1977 said:

Advice please if possible. I have tried to contact CAB but can’t get to speak to anyone and worried.

My sister has been struggling with the interest rate rises. She has 3 kids and both her and her husband work but they just don’t seem to have enough. She finally told me about her money problems and we don’t have any savings but I have managed to help her with an extra £100 a month out my salary towards her mortgage. However with the new rise and possible future rises I really can’t afford this now. She has tried looking into benefits but they are not entitled and have too poor credit for a loan. 

She has now said they have decided not to pay their mortgage for a few months while they sort themselves out. I know! What on earth does that achieve. I have tried so hard to explain that helps with nothing at all, literally makes things worse. However  she is convinced there is a repossession ban for 12 months. I did say I didn’t hear them say a ban but apparently she has been told none of the banks can carry out repossessions until June 2024 because of this ban. She keeps telling me it will be only for 2 months or so but I know she will do this for longer if she thinks she can’t be repossessed. She is not listening to any advice or can’t even understand how it won’t make things better because she will have even higher arrears.

Can you advise if there is a 12 month repossession ban?

I have looked into news articles but it’s very vague on the word ‘ban’. It doesn’t really sound like a ban to me.

thanks all.

Just because there's a repossession 'ban' for 12 months, doesn't mean it won't happen.
She must decide her priorities - talk to her lender or stand to lose everything.
Ignoring these financial problems won't go away on their own. It sounds like she's immature about the whole thing, which I can understand in a situation like this and it's not easy.