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Facing Eviction

By: Louise Smith, barrister - Updated: 16 Jun 2017 | comments*Discuss
Eviction mortgage borrower divorce

Eviction – surely one of those things that only ever happens to other people, not to people like you. The truth is that all sorts of people find themselves facing eviction. The size of the mortgage or the value of their property is irrelevant. The only common factor is that a mortgage that once seemed to be affordable no longer is. There are a number of events that can lead to a borrower facing eviction. Common events include: loss of a job; divorce or separation; a large unexpected expense; or, an increase in interest rates.

Mortgages with Discounted Periods

Many mortgages have a discounted period. For the first year or so the interest rate charged may be several percentage points below the true rate. When the discounted period comes to an end the monthly payments suddenly jump up. Some people entering into these mortgages convince themselves that, by the time the discounted period ends, their finances will have improved making the higher payments affordable. Others simply ignore the fact that the initial monthly instalment does not represent what actually has to be paid for many years to come.

Some borrowers say they were misled by their mortgage broker into taking on a mortgage that they could never really afford. However, when an adult enters into this kind of agreement and signs the Mortgage Deed, it is their responsibility to read the small print. Under the terms of the mortgage it is the borrower’s responsibility, and nobody else’s, to make sure they make the payments that are due. Many borrowers find themselves plunging into arrears as soon as this discounted period comes to an end.

When is a Lender Entitled to Repossess?

With most mortgages the lender is entitled to repossess the property if a borrower falls behind by the equivalent of two monthly payments, but for some mortgages a borrower only has to be one month behind. Under the heading “Default” or “Power of Sale”, the terms and conditions of the mortgage may say something like “you must immediately pay us all the money you owe us if… you are more than two months late in paying any money under the loan agreement”. In same cases the lender has to make a written demand for the money before it is technically due.

Borrowers should look at the terms and conditions of their mortgage and make sure they understand them. If a borrower is struggling to make the full payment each month it may still be worth paying as much as can be afforded so that the arrears are kept below the two month level for as long as possible. Some lenders add charges to a borrower’s account every time they miss or are late with a payment. The mortgage terms may entitle the lender to add these fees directly to the arrears. The result of this is that the arrears can be increasing at a much faster rate than the borrower realises. If a borrower does not have a statement of account for their mortgage they should ask for one so that they know exactly what is being added to the arrears.

Prioritising Debts

In most cases if a borrower is struggling with his mortgage it is likely that he is also struggling to pay other bills. It is absolutely vital that borrowers in this situation prioritise their debts.

Credit card companies often pursue borrowers who fall behind with their payments much more aggressively than mortgage companies. This can lead to people making payments towards this kind of debt rather than their mortgage. The reason that the mortgage company might seem more relaxed is because they know full well that, if it comes to it, they can repossess the property. The credit card company will not have that sense of security. On the other hand, whilst Council Tax and utility bills are extremely important – and should take priority over credit card debts - they pale into insignificance if the property they relate to is repossessed.

The idea of losing one’s home can literally be unimaginable: “it’s my home; no one can take it away from me.” The consequence of this is that some people ignore the threat of eviction until the courts become involved because they refuse to accept its happening to them. Homeowners should make sure they understand the agreement that they have entered into with their lender. Remember - the words “your home is at risk if you do not keep up with your payments” mean exactly what they say.

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In due to be evicted on Monday, i got a eviction notice just over week ago saying in not staying at my flat and my friend today got a letter with a change off address form stating iv moved there already which iv not i went to council and told them this repeatedly over past 2 weeks and to get in touch with the DWP so i dont know what to do
grumps - 16-Jun-17 @ 7:20 PM
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