Who Should Receive Notice of a Mortgage Repossession Case?
When a mortgage company decides to issue mortgage repossession proceedings the first person to receive notice should be the borrower or borrowers. Under the current mortgage repossession rules a mortgage lender should try to discuss an arrears problem with the borrower before starting a court case.
During the UK’s recession it was feared that a large number of homeowners could be evicted from their homes. Various policy guidelines were introduced to limit the number of repossessions. Pursuant to these guidelines mortgage lenders should try to help borrowers find solutions to an arrears problem before resorting to repossession proceedings. This could be by agreeing to change the due date on a mortgage or by restructuring the loan.
Finally, the mortgage lender should send a letter warning the borrower of an impending mortgage repossession case and / or a formal demand for the outstanding debt. When a repossession claim is started the borrower will receive the court papers produced by the lender, which set out the reasons why a repossession order is being sought.
The OccupierA mortgaged property may be occupied by an individual who is not named on the mortgage but who treats the mortgaged property as home. After starting a mortgage repossession case the mortgage lender must give notice of the hearing to anyone living in the property. This requirement is satisfied by sending a letter to the property addressed to “The Occupier” alerting them to the fact that a mortgage repossession case is due to be heard.
The notice should give the name and address of both the claimant mortgage lender and the defendant borrower. It should also include the time and place where the court case will be heard. Under the current rules this notice should be sent to the occupier within five days of the mortgage lender receiving notice of the hearing date from the court.
The Local Housing AuthorityIn some cases where a property is repossessed by a mortgage lender the borrower may be entitled to be re-housed by their local authority. Some borrowers make no attempt to contact their local authority to tell them that they are facing eviction until the property is actually repossessed.
Rules applying to all mortgage repossession cases issued since 1st October 2009 require the claimant to send a letter to the borrower’s local authority notifying them that repossession proceedings have been started. This notice will generally be sent out at the same time as the notice to occupier described above and must be sent within five days of the lender receiving notice of the repossession hearing from the court.
TenantsUntil recently, mortgage repossession law gave very little protection to tenants. Often the only notice a tenant would get that their home could be repossessed was the notice to occupiers. Not only is a letter addressed to the “Occupier” easily dismissed as junk mail but, until the rules changed, the notice only had to be sent two weeks before the repossession hearing. Under the rules applying to mortgage repossession cases since October 2009, a notice must be sent addressed to “the occupier or tenant” and it must be sent within five days of the claimant receiving notification of the hearing date from the court.
A Spouse with a Registered Interest in the Mortgaged PropertyA spouse who is not the registered owner of a property but to whom the property represents their marital home – or their home through a civil partnership - may register a caution against the property at the Land Registry. This entitles them to be notified if anybody does anything in relation to the property which may affect their interest in it.
A mortgage lender seeking a mortgage repossession order will have to prove, at the court hearing, whether or not such a caution has been registered against the property. If a caution has been registered the mortgage lender will have to show that they have given notice of the repossession hearing to the person who registered the caution.