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Selling or Re-mortgaging your Home

By: Louise Smith, barrister - Updated: 4 Mar 2023 | comments*Discuss
 
Selling re-mortgaging lender

Even once a lender has started repossession proceedings it is not too late for a borrower to sell the property themselves. A borrower is entitled to sell, or re-mortgage, at any time - right up until the moment when the court bailiff attends to change the locks.

Selling Before a Case goes to Court

People are sometimes unwilling to consider selling their home. Moving is a huge upheaval and often people simply do not want to leave a house that they may have lived in for years. However, if payments cannot be maintained on the mortgage the ultimate result is that the property will be repossessed and sold by the lender – and probably for less than the borrower might have obtained if they had sold it when they had the chance.

If a borrower concludes that selling is the best, or only, option they should talk to their lender as soon as possible and tell them what they are planning. Provided that there is equity in the property many lenders will hold off taking the case to court so that the borrower has time to sell. Borrowers should keep the lender fully informed of the progress of the sale. The following documents will help convince the lender that a genuine sell is in progress:

  • Copies of correspondence from estate agents;
  • Proof that an offer has been made at a price sufficient to redeem the mortgage;
  • Solicitor’s letters confirming that a sale has been agreed and when it is due to complete.
If a lender knows that they should get their money back without the hassle of going to court and then having to sell the property themselves it is likely that they will be patient.

Selling Once Court Proceedings have Started

Most lenders will continue with court proceedings until they have evidence that a borrower has exchanged contracts. People often say that a property has been “sold” as soon as they receive an offer. However, until contracts have exchanged there is absolutely no guarantee that the sale will complete.

If contracts do exchange before the hearing the possession case will probably be “adjourned generally with liberty to restore”. This means that the case goes dormant but that the lender can revive it if the sale falls through.

Selling After the Possession Hearing

Judges can give borrowers the chance to clear the mortgage debt without the property being repossessed. One of the ways that this might be done is by the borrower selling the property themselves. If a borrower comes to court and says that the property is on the market, many judges will grant a 56-day possession order to give the borrower time to sell, some will even allow three months. Some judges may want to see evidence that the property is on the market for a price that will cover the mortgage. If a sale is imminent, the judge may be prepared to adjourn the case so that that it can go through.

Selling Once an Eviction has been Scheduled

If a borrower applies to stop an eviction on the basis that they are selling the property, the judge will almost certainly want to see some firm evidence that exchange is imminent. The further down the repossession process the case has gone, the more stringent the requirements are likely to be. If the sale price is not enough to cover the mortgage debt a judge is unlikely to stop an eviction on these grounds unless the borrower can also show that they have funds available to cover the shortfall.

Re-mortgaging

Whilst there are many companies willing to provide mortgages to people with financial problems, they are unlikely to be offering the most competitive deals. As soon as a borrower starts missing payments on their mortgage this is likely to show up on credit reports limiting the choice of re-mortgages available to them.

Lenders and the courts view re-mortgages in a similar way to sales. The lender should be kept informed of what is going on and the borrower should provide copies of any correspondence that shows that they are in the process of re-mortgaging. Similarly, judges will often allow a borrower more time if they are satisfied that a re-mortgage is likely to go through.

Conclusion

By addressing the problem as soon as they start struggling with payments, borrowers will improve their chances of either selling their home for a good price or of getting a re-mortgage at a competitive rate.

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I am facing a repossession hearing on March 23rd 2023. I am scared stiff to go to court. I want to get the case transferred to a court nearer to me but don't know what to say to get this agreed and need help with this urgently. I cannot source a legal aid lawyer to help with the court hearing and file my defense so need help with this too. My mortgage was mis-sold to me in 2007 and was fraudulent. The broker (Park Row Associates who arranged the mortgage were liquidated by the UK government in 2010 for mortgage and insurance fraud. The lender Mortgages PLC/Mortgages 1 have blackmailed me for 16 years into paying for an unaffordable mis-sold mortgage that is fraudulent because Park Row altered a letter from my employer to read that I was earning £60k pa when I wasn't earning half of that. Mortgages plc refused to cancel the mortgage before the 1sr payment was due and failed in their duty of assignment to ensure I could afford the mortgage prior to issue in Sept 2007. I have tried many times via the Financial Ombudsman to stop the hounding, harassment, abuse and extortion of Mortgages plc but failed, likewise via 2 successive MP's, the FCA and I failed to get compensation via the FSCS and 2 advocates have failed to succeed in getting a resolution with Mortgages PLC also. Now they are repossessing me as I am in arrears thanks to Mortgages PLC putting me out of business in 2021 by harassing me at work so that my clients found out that I was in mortgage arrears. I am 65, have no family or friends now, nowhere to go, no money, a poorly paid job with a call centre and the council will put me in a hostel subject to a place if I am made homeless and as a result I will lose my job as the call centre will not allow me to work from a hostel. I need a landline phone and a desktop computer and privacy to take calls from home for the call centre. I need help. I can't find help anywhere. I have been trying to move to West Yorkshire but the rental agents are refusing to allow me to apply for tenancies unless I view in person and I have a fractured left hip & knee and a badly torn left shoulder rotator cuff. The letting agents will allow someone to view houses on my behalf but I have no one living in West Yorkshire (WF12) to view for me. Can anyone help me, I am worried about losing all I have and being made destitute on March 23rd 2023. Thank you. Kindest regards, Kaz
KazzyJS (Karen Steve - 4-Mar-23 @ 4:12 PM
I am facing a repossession hearing on March 23rd 2023. I am scared stiff to go to court. I want to get the case transferred to a court nearer to me but don't know what to say to get this agreed and need help with this urgently. I cannot source a legal aid lawyer to help with the court hearing and file my defense so need help with this too. My mortgage was mis-sold to me in 2007 and was fraudulent. The broker (Park Row Associates who arranged the mortgage were liquidated by the UK government in 2010 for mortgage and insurance fraud. The lender Mortgages PLC/Mortgages 1 have blackmailed me for 16 years into paying for an unaffordable mis-sold mortgage that is fraudulent because Park Row altered a letter from my employer to read that I was earning £60k pa when I wasn't earning half of that. Mortgages plc refused to cancel the mortgage before the 1sr payment was due and failed in their duty of assignment to ensure I could afford the mortgage prior to issue in Sept 2007. I have tried many times via the Financial Ombudsman to stop the hounding, harassment, abuse and extortion of Mortgages plc but failed, likewise via 2 successive MP's, the FCA and I failed to get compensation via the FSCS and 2 advocates have failed to succeed in getting a resolution with Mortgages PLC also. Now they are repossessing me as I am in arrears thanks to Mortgages PLC putting me out of business in 2021 by harassing me at work so that my clients found out that I was in mortgage arrears. I am 65, have no family or friends now, nowhere to go, no money, a poorly paid job with a call centre and the council will put me in a hostel subject to a place if I am made homeless and as a result I will lose my job as the call centre will not allow me to work from a hostel. I need a landline phone and a desktop computer and privacy to take calls from home for the call centre. I need help. I can't find help anywhere. I have been trying to move to West Yorkshire but the rental agents are refusing to allow me to apply for tenancies unless I view in person and I have a fractured left hip & knee and a badly torn left shoulder rotator cuff. The letting agents will allow someone to view houses on my behalf but I have no one living in West Yorkshire (WF12) to view for me. Can anyone help me, I am worried about losing all I have and being made destitute on March 23rd 2023. Thank you. Kindest regards, Kaz
KazzyJS (Karen Steve - 2-Mar-23 @ 1:28 AM
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