Real Life Repossession Cases – Mrs B vs Kensington Mortgages

In order to help other home owners who are facing repossession, we are going to start posting actual cases.

These will be based on situations faced by people who have contacted us but of course, names and identifying information will remain hidden.

Case #1

Mrs. B
Location: Wakefield
Value of Home: approx £500,000
Total Mortgage: £108,000
Lender: Kensington
Second Charge: None
Loan Arrears: £24,000

Mrs B contacted us after receiving a Bailiff’s Warrant for Possession from her local county court on behalf of her lender, Kensington.

She had followed standard procedure to ask the court to allow her to pay her substantial arrears over 2 months. For this she used the Court Form N244. Because her court was busy the judge could only hear her case late on Friday morning, repossession by bailiffs was set to take place at 11am on Monday.

Normally, if a homeowner asks the court to help agree a repayment plan with their lender the judge will recommend that the lender accepts the plan and will suspend the repossession.

However, the judge can only suggest this to the lender.

In Mrs B’s case, the judge took on board the extenuating circumstances (serious illness in the family, coupled with a very low mortgage compared to property value and no other lenders involved) and urged the lender’s solicitors to ask them to accept the payment of £24,000 arrears over a 2 month period.

This is a large sum of money, but also a very short repayment period for the lender to agree to, and Mrs B was able to show that she could make these payments.

However, the lender refused the Judge’s recommendation and stated that only arrears payment in full before the bailiffs arrived on Monday would be acceptable. This was lunch time on Friday.

Unfortunately, Mrs B didn’t contact us until late afternoon on Friday.

If she had contacted us earlier we would have been able to arrange a cash buyer for her home with an option to buy it back later. Unfortunately, there was not enough time to even get ID documents to a solicitor before the repossesion was to take place on Monday morning.

To make matters worse, Mrs B had made a payment of £5,000 on the Friday morning, which instead of being money she and her family could use to find rented accommodation after the bailiffs repossessed her home, would only slightly reduce the overall amount owed to her lender, especially once the lender had added on its legal fees, penalties and costs of selling her home at auction, probably with a very low reserve just to cover their costs.

If you even think you might be facing a similar situation in the near future, seek advice now, because like Mrs B, you might believe that just paying arrears when you go to court will be enough to stop your lender from repossessing your home.

Increasingly, lenders are unwilling to accept arrears repayment arrangements because they fear that by not repossessing today and getting their money back, that your property may not be worth enough to cover your mortgage and loans if there is a property crash.

For more information on the repossession process visit our website Stop Repossessions Org

Sub Prime Lender Kensington Pulls No Punches in Home Repossessions

In the last few weeks we have had numerous calls from desperate homeowners who have gone to court to try and make an arrangement to pay off their mortgage arrears and ask the judge to suspend a possession order.
Kensington Logo
All of these callers have said the same thing.

The Judge asked the lender’s solicitors to speak to their client (the lender) to be lenient and agree a repayment plan. The answer comes back – a resounding ‘No’. The lender will only accept full arrears paid or repossesssion.

When asked the question ‘Who is your lender?’ the answer in 99% of cases has been Kensington.

Kensington are well known on the online forums for their heavy handed tactics and the huge charges they add as soon as a borrower misses a payment.

This sudden rise in calls for help regarding Kensington repossessions seems to suggest that maybe Kensington are looking to get as much cash back from their borrowers as possible before house prices (and their asset values) tumble.

After all, when faced between paying high inter bank interest for their money or bringing in cash from troubled borrowers via repossessions (and charging them high fees for the privilege) which would they choose?

The fact is that if you must borrow from a sub prime lender then read the small print carefully and make sure you can stick to the monthly payments – the consequences of not doing so are ever more likely to result in your home being repossessed.

Bank of England Reduces Interest Rate But Will Sub Prime Lenders?

Let’s hope that the BoE reduction of one quarter of a percent interest rate will actually filter down to those who need it most?

Prime lenders like Halifax have already passed it on to their customers, but for those customers of sub prime lenders like Capstone, GE Money, Kensington, and the like, the results are unlikely to be so fast, and in some cases, not be a result at all.

Repossession House Keys

This is because many sub prime lenders are now actually bad risks themselves on the inter bank money markets where the interest rate is not set by the Bank of England and therefore reductions count little.

The irony is that the biggest repossessers are now themselves considered to have bad credit ratings. Poetic justice it may be, but they still have the power to charge some incredibly high rates and penalties which should see them in business for a long time to come.

Repossessions Up 70%, But News Gets Worse For Owners After Repossession

Not only are we seeing a rise in repossessions this year, unprecedented since the ealry 1990s, but unlike the last repossession wave, many lenders are themselves now in financial trouble.

What does this have to do with those facing repossession?

Well, the answer is that not only are lenders pursuing repossession of those with mortgage arrears with an intensity not seen before, but many are also doing their best to speed up the disposal process once the property has been repossessed to the detriment of those repossessed.

This means that even those homeowners who have been repossesed and are expecting to receive a cash lump sum after the disposal of the sale can find themselves still owing money as the lenders rush to dump houses via the auction system, before what many are seeing as an impending house prices crash.

We recently had a case where the lender Kensington, had repossessed the property of Mr & Mrs L, in Birmingham, and despite Mr L having lined up a buyer who was ready and willing to pay a decent price for their 3 bed semi, Kensington disposed of the property (seemingly via their internal estate agency, although we cannot be sure) for the exact sum that the couple owed on their home.

Coincidental? Maybe not.

The Ls were expecting to receive at least £20,000 after the repossessed house was sold at auction, even taking into consideration a quick sale was needed. This merely highlights the problems that many home owners face with repossession.

We always advise clients that it is better for them to arrange a sale, even at an under value, than to allow the home to be repossessed by the mortgage lender, simply because in this way they are able to make some key decisions regarding the sale process.

Importantly, they can choose who to sell to, for how much (within reason) and control the legal costs.

None of these options is available once the property has been repossessed.

In the case of the Ls, by allowing what they believed to be ‘the inevitable’ and letting Kensington take their home, they unwittingly lost around £20,000 – a sum of money which could have paid for them to rent locally for a number of years as well as be debt free.