Government statistics have shown that the number of mortgage repossession cases have been falling steadily since 2008. It has been reported that in the first quarter of 2013 there were 14,375 mortgage repossession claims issued in England and Wales but just 4,400 evictions by Court bailiffs. Yet the North West remains the area with the highest number of repossession cases.
Quite often an outright Possession Order can be avoided but only where the mortgagee can demonstrate that they can afford to repay the arrears within a reasonable period of time.
Unfortunately, the Judge at the Court hearing has very little discretion and in order to make a Suspended Possession Order must be satisfied that the person concerned can not only afford the monthly payments but also that they can realistically afford to repay the arrears within the remaining term of the mortgage at the longest, but ideally within the next 3-6 years. The Judge has no power to change the level of the monthly payments, alter the date of payments or vary the terms of the mortgage (e.g. switching from capital to interest only payments).
So the key thing for anyone struggling to pay their mortgage is to speak to the mortgage company as soon as they experience problems and to try to maximise their income.
Some may be able to apply for Support for Mortgage Interest which is a government benefit which can be paid directly to the mortgage company to cover some of the interest payment. A careful consideration of income and expenditure should be undertaken and anything not absolutely necessary cut out. For those who are simply unable to afford the payments, they should also consider the Mortgage Rescue Schemes offered by local authorities which effectively involve selling their property and renting it back.
With the ongoing difficult economic times and high levels of unemployment, mortgage repossessions cases are likely to continue to be issued at a steady pace and a proactive approach is key to preventing the matter escalating to a Warrant of Eviction. There is no perfect solution and specialist legal advice may assist you to find an option you didn't think was available to you.
By Elizabeth Lowe, housing law solicitor
If you would like further advice and assistance with mortgage possession proceedings or you have a Warrant of Eviction, please contact Stephensons housing law team on 0333 344 4772.