What your mortgage lender has to do

Mortgage lenders have to follow a predefined protocol before they can attempt to take you to court for mortgage arrears.

This protocol includes a number of steps that can be taken before court action is commenced. The list given below does NOT include ALL the steps but does show the most useful ones.

• Giving you information about the amount of your arrears and whether interest or charges will be added
• Talking to you or your representative to purpose a repayment.
• Talking to you about the cause of your arrears
• Considering a reasonable request from you or your representative to change the date of your regular payment
• Providing you with a written notice, if you have broken a payment agreement. This notice should tell you that court action will be started if you do not make up the payment missed.

If you do end up in court, a judge will take into account if you mortgage lender has followed the protocol correctly.

Where possible we will always encourage that either yourself or a representative contacts the lender and make them an offer (we would personally use a representative, they will cost you but will be less painful then losing your home)

Contact your lender and make them an offer

Once you have worked out a way of dealing with your mortgage arrears, you should contact your mortgage lender as soon as possible and make them an offer.

It is important that you put a DETAILED proposal to the lender rather than asking them for a solution

This is because you will be surprised how many lenders will not be aware of your circumstances, hence will not consider the range of options they would, had they been aware! Your lender may give you extra time if they know that you are waiting:

• for help from benefits
• for payment from a mortgage payment protection insurance
• waiting to go back to work.

Write a letter to your mortgage lender, clearly setting out your offer. Your offer should be one which you can realistically keep to, and which will clear the arrears WITHIN the period of the mortgage.

This offer must be based on how much you can realistically hope to pay. Include a financial statement with your letter which shows your mortgage lender how you have arrived at this number.

Convince your mortgage lender that that accepting an offer worked out in this way is in both of your interests as you are more likely to keep it and they end up getting their money.

Your letter should also include the following information:

• A background to you problem
• A complete list of reason(s) why the arrears have built up
• that you previously had a good payment record, if this is appropriate
• how many years it will take to clear the arrears, compared to the remaining term of the mortgage
• whether there is any equity in the property.

If you feel that your offer is weak, it might be worth suggesting to your lender that they accept this offer for a set period, after which they can review your circumstances.

You are fighting for you home here, so if you feel the person you are dealing with is not giving you the best support that you need ask to speak to a supervisor.

If you are unable to agree then most likely your mortgage provider will take action against you and try and take possession of your property.

 If you argue your case in court, the judge may allow you to stay in your property as long as you keep to an agreement to pay. It is EXTREMLY IMPORTANT if you are in this position GET HELP!

Making payments!!!

We think it is IMPERITIVE that you start making regular payments!!!  Even if your lender doesn’t accept the offer, it may help your case if you are taken to court later on!

Think about this logically a court will prefer that you are attempting to make a payment rather then not making a payment. Please make sure whatever payment you are making is discussed with your financial advisor!

We are stating the obvious here but please remember that if your regular repayment was say £1200 then a regular payment of  £30 is not enough!!!