By Tom Mead

Statistically, the figures for home repossession have risen by 45%, according to Government figures. There can be many reasons that lead to house repossession, such as: divorce, credit card debt, illness, secured or unsecured debts or separation.

The process of repossession can legally begin when 2 payments to a lender have been missed. The first missed payment brings the borrower into arrears with the lender, who then have to be contacted and a payment schedule agreed. If the borrower does not contact them, or cannot afford to make the payments and a second payment is missed, then the lender can begin the process of home repossession.

The first stage of this is for the lender to state in a letter that the borrower has seven days in which to meet the payments or to agree a payment scheme. If this is not possible, then solicitors will begin court proceedings, seeking a home repossession order.

Usually the court will try and see house repossession as the last eventuality. However, if the borrower is deemed to be unable to make the necessary repayments, including arrears and penalties, then he will be served with an eviction notice and a date will be scheduled to leave the house.

The repossessed home is now the legal property of the mortgage lender. The lender can then instruct an estate agent to put the house on the property market or for it to be sold at auction.

First-time house-buyers can research these properties and they can become an affordable alternative in an increasingly expensive market.

Offers can be made on a repossessed house, but the lender may decide they want to publish a ‘notice of offer’ in the local press. This states that the lender will accept higher offers that are received by a certain date.

Auctions used to be mainly used by investors looking to by the property and sell it on at a profit, but now those wanting to get onto the ‘property ladder’ – but may not have the necessary funds for a standard purchase – can do so, as the properties are usually sold for less than their market value.

Other benefits include the bidding process, which is in an open forum so all bidders know the price and do not have to bid ‘over the odds’ to secure the sale. Also, the process is much quicker than the conventional sale process, usually taking 1 month from sale to occupation.

There are other factors involved, however. A repossessed home may be in need of repair and renovation or carry a negative credit rating associated with the address – although this can be absolved by contacting the relevant credit reference agencies.

There are lists of auctioneers available in local directories, but it is also worth contacting estate agents and mortgage lenders who have a vested interest in the sale of any repossessed property, although mortgage lenders can be secretive about their involvement in house repossession, in terms of image-consciousness.

The Internet offers many services that can supply lists of repossessed properties, but these are likely to generate a lot of interest, due to the potential to buy a house at less than market value.

About the Author: Tom Mead is a qualified mortgage advisor writing

repossession

editorial, on how best to

stop repossession

and save the house you live in.

Source:

isnare.com

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