Don’t Trust Your Lender!

When your lender is putting pressure on you to pay off your arrears, don’t agree to a plan that doesn’t work for you and your family.

Never ever agree to pay your bank more than you can afford – either today, or on a payment plan and make sure you get every single agreement in writing.

IMPORTANT TIP: Sometimes the bank will refuse to put these agreements in writing. Instead they say something like ‘I’ll make a note on the system’. Well, in that case write to your bank with a description of your call, what was discussed and what was agreed.

The chances are the bank will not respond, but take that to a Judge and the Court will be more likely to side with you and grant you more time.

Get your free Stop Repossessions Guide Here – Updated for 2017!

Could This Christmas Be When YOU Get Repossessed?

The Risk of Repossession at Christmas

Christmas is the worst time for anyone facing repossession. Not only does Christmas mean extra expense for everyone, but maintaining your family’s spending to keep up appearances can lead to disaster in January.

Is Your Home in 'Upside Down Negative Equity'?

There are some key risks to the Christmas period if you’re worried about repossession and keeping up your mortgage payments:

• Extra spending on presents for family and friends
• Extra use of credit cards or payday loans
• More eating out or parties to keep up appearances at work
• Fewer working days for most freelancers
• A mortgage payment date over the holiday that’s easy to miss

Avoid The January Bill Shock That Could Lose You Your Home

It’s a very common theme every year when I speak to people in January as the heavier bills start arriving the week after New Year.

If you’re facing repossession over the Christmas period, then make sure you stick to any payment plan you have with your lender or the Court – especially if you have a suspended possession order already.

Find Out How to Stop Repossession Here

FREE Ultimate Stop Repossession Guide – Updated for 2013

We’ve compiled Your Ultimate Guide To Stopping Your Repossession.

This 50 page eBook is FREE for a Limited Time Only

You can get your copy by clicking on the image below.

Alistair Darling to Stop Rent Back Evictions

The Guardian reported an interesting article on sell and rent back and repossession this week:

Owen and Moira Martin are among the many British victims of companies offering controversial sale-and-rent-back deals. Their three-bedroom maisonette in Plymouth was repossessed last month because the company with which they had entered into an agreement never paid the mortgage, even though it had pocketed about £45,000 in fees from them.

Such horror stories have prompted the government to consult on how best to regulate the estimated 2,000 or so companies in the UK offering such schemes.

‘It’s been devastating,’ says Owen Martin, a supermarket worker, who has had to move into a privately rented two-bedroom flat with his wife. ‘We made sure the rent was paid, but we lost our home anyway because the company we sold to never paid the mortgage company.’

The Office of Fair Trading estimated in its recent report into the sector that some 50,000 sale-and-rent-back transactions had taken place. Operators offer to buy the property of someone facing repossession at a discount price, allowing the former mortgagee to remain in the property as a tenant. They usually also charge significant fees.

Read the full story at the Guardian website

http://www.guardian.co.uk/money/2008/nov/09/rent-back-evictions

Now There’s Even a House Prices Crash Calculator

After years of talking up the property boom and the ‘you can’t lose with property’ articles in the media, the newspapers are now full of doom and gloom about the future of UK house prices.

The reality may be that a housing market depression may be caused by nothing more than the fact that we all start to believe that house prices will fall, we don’t put our houses on the market and we don’t try to move home.

This means that house prices will fall and those affected most will not be those who can ride out the storm and stay put in their homes, but those who are facing repossession.

This Is Money the website arm of the London Evening Standard have even published a price crash calculator so that if you aren’t scared enough already, you can truly frighten yourself into worrying about what your house will be worth if prices fall the same way they did in 1992!

The threat of negative equity however is now a very real one and millions of people will find it impossible to refinance their mortgages and will be forced onto their lenders’ top standard variable rates.

Stop Repossessions Org UK Sees Rise in Negative Equity Repossessions

As 2008 marches on and the global and economic situation looks ever more bleak, so are the tales we are hearing from UK homeowners facing repossession.

Back in 2007 a rough estimate would be that 70% of those people who contacted us by phone or email had some difficulties with their mortgage repayments, were in arrears but were also in a position to:

a) Repay the arrears over a given period either by direct agreement with their mortgage lenders or by a court judgement.

b) Remortgage with a new lender in order to get a fresh start with a new payment record appearing on their credit score

Fast forward and now it is rare that we are hearing from people who have enough extra monthly income to repay their arrears over time and many lenders (especially the sub prime) are refusing to accept repayment plans to pay off morgage arrears.

The majority of people contacting us are now also at the start of the negative equity trap.

The true and actual cost of their borrowings, (which consists not just of the amount borrowed but also the huge penalties, legal and court fees and Early Redemption Penalties), have risen dramatically, whilst the value of their homes is in many cases starting to stagnate, if not fall.

A homeowner who previously remortgaged their £200,000 home with a 90% mortgage (£180,000) and who has either added a secured loan (say £10,000 – new total £190,000) or had a County Court Judgement for unpaid credit card bills of a similar amount, and who has an early redemption penalty of say £7,000, may be mortgaged to £197,000.

One missed mortgage payment and not only can the interest rate rise dramatically so that monthly costs are hugely increased, but legal fees and punishing penalty fees will be also be added.

Suddenly we could be looking at redemption costs of over £200,000.

Sell the house?

Not always possible.

Estate agents will charge a minimum of 1%, more if you go with multiple agents. That’s at lease £2000. Legal fees and the Government’s ridiculous HIPs pack will add another £1500.

It’s now going to cost £3,500 to sell the home and get nothing in return.

But it doesn’t stop there.

If you remortgaged before the Northern Rock crisis hit in September 2007, then the chances are that your lender was giving signals to surveyors to over value properties.

The market is always rising so why not let them over value your home and then lend you more money in return for more profit?

By the time you may be in trouble house prices should have risen by enough to bring down your mortgage level to less than 100% – just in case they need to repossess.

But the reality is that homes are now only selling if the price is right.

Now it’s a buyer’s market again.

Houses which comfortably sold for £200,000 back in 2007 are now sticking in agent’s windows at £189,000.

Suddenly it could cost you as much as £10-20,000 to buy your way out of repossession.

But who is going to lend you the money to pay the costs?

It is not going to happen.

If you do have equity in your home then you do have options to avoid repossession find out here

More Homeowners Face ReMortgage Hell as Lenders Pull 100% loans

Homeowners facing finance problems may be a step closer to repossession as mortgage lenders pull their 100% loans.

This means that for those who need to remortgage soon, not only are rising interest rates from sub prime lenders and falling or static house prices an issue, but they may now find that they are unable to remortgage to the full value to pay off their current mortgage with an existing lender.

If a property worth £100,000 was 100% mortgaged 2 years ago and has fallen in value even by a few percent, then this means that a new mortgage may only cover around £88,000 towards paying off the existing mortgage.

The result?

Many will be unable to remortgage, will fall into the dreaded negative equity not seen since the early 90s, and will be forced onto so-called standard interest rates with their current lender.

With some sub prime lenders this is 10% or more.

This news in from The Guardian online:

“Cheltenham & Gloucester will tell homebuyers today that they must put down a minimum deposit of 10% if they want one of its mortgages, as the clampdown on lending gathers pace. Meanwhile, Royal Bank of Scotland and NatWest are withdrawing from offering mortgages for more than 95% of a property’s value.

C&G – owned by Lloyds TSB – is one of the biggest mortgage providers to rein in its lending in response to the credit crunch. The change means that a typical first-time buyer in London will have to stump up almost £25,000 to obtain one of the company’s home loans.

RBS/NatWest has already pulled out of offering mortgages above 95% through brokers; after March 7 this will also apply to branch-based home loan applications.”

Read the full article here

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

Let’s Talk Ourselves Into a Housing Market Crash

Recessions are an interesting phenomenon.

This is because they are created by belief.

If everyone believes there is going to be a recession then they act accordingly. We spend less ‘just in case’ and we put off important decisions like moving house and taking on a bigger mortgage ‘just in case’.

The irony is that there is still the same amount of money out there, it’s just that in a recession those with the money (like banks) decide to either hold onto to it (just in case) or charge higher interest to borrow it (just in case).

I remember clearly the last house prices crash in the late 80s and early 90s. No sooner had the 90s arrived and the recession looked like picking up, than we got a very grey and dull John Major telling us not to grumble, tighten our belts and so on.

The result?

Another immediate recession because everyone was depressed and reluctant to move their money around (from banks lending to you and I deciding whether to pay for a holiday).

The entrance of Blair in 1997 had a remarkable effect on that recession because suddenly we had a man who was upbeat and positive.

Nothing else changed, the politicians still lied to us, scandals still happened, the poor got poorer but suddenly there was an upbeat feeling everywhere and the cheap credit era was ushered in to fuel the spectacular growth in property prices and high street spending.

Now we have Brown, another miserable Prime Minister – at least Major wasn’t grumpy as well as dull.

So what’s changed? Nothing, really.

Brown was responsible for the Government finance policies behind Blair, now he has Alistair Darling following the Brown plan – yet recession is looming and house prices set to crash.

The media also play their part. Just how many editions of Trevor McDonald’s Tonight programme can they make telling us the housing market is booming and buy to let will replace your pension? Eventually, some bright spark has to make a feature on ‘where will it all end’?

The house prices crash has been predicted by doomwatchers for the last 7 years.

Even if it does need a correction, there is too much money invested in property in the UK (not to mention too few properties for the growing population) for it to fall far. And any fall will still be way above where it was 5 years ago.

Gordon Brown said no more ‘boom and bust’. Unfortunately for him he has stayed around just too long to be able to blame anyone else for what is after all a cycle of nature.

The reality is though, if there is a crash or correction or recession it will only be because we have all talked ourselves into it, after years of talking ourselves out of the last one.

50% of Repossessions Are By Sub Prime Lenders

 

According to statistics published today by BBC Radio 5, FIFTY PERCENT of all repossessions in 2008 involve sub prime lenders.

No surprise there then?

Except that sub prime mortgages only make up 6% of UK mortgage lending.

Among the other fifty percent the highest number of repossessions are being brought by high street lenders Britannia Building Society, Bradford & Bingley, and (no surprise here) Northern Rock, all of which have pursued an agressive mortgage lending policy in the last 5 years.