Ending 'Horsham' possessions

**Main man** · 1st January 2010, 20:59:PM

Re: Ending 'Horsham' possessions

Crackdown on repossessions loophole

Alan O'Sullivan, This is Money
12 November 2009
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The Government is working to close off a legal loophole through which lenders can bypass the courts to force people out of their homes.

Play fair: lenders should have to go through the courts to repossess properties.
It intends to publish a consultation later this year on tightening up the law to make sure all repossessions are carried out through the courts and every effort has been made to keep borrowers in their homes.

The move follows a case last year in which the mortgage provider GMAC sold a couple's property to another company, Horsham, after they fell behind on their mortgage payments. As the couple failed to leave the property, Horsham issued trespassing proceedings against them.
The judge in the case found in the company's favour as the couple were unable to pay their mortgage, but the case left a legal loophole for companies to exploit: namely, it opened the possibility for homeowners to be evicted without resorting to the courts.
Courts Minister Bridget Prentice said: 'Advice desks within courts are making sure that borrowers and lenders are aware of all the options available before the final resort of repossession.
'We want to publish a consultation by the end of the year on tightening up the law so that no lender can sell the home a borrower lives in against their wishes without first going through the court process, enabling them to take advantage of the help offered through the courts.'
Borrowers can also rely on the Mortgage Pre-Action Protocol, introduced a year ago, which sets out guidance on the steps lenders have to take before going to court and stipulates that applying for repossession must be a last resort.
This has been credited with pulling down the number of repossessions applied for by 37% between July and September and the same period last year, according to figures from the Ministry of Justice. However, the Council of Mortgage lenders said today repossessions were up 5% over the same period.
There are also a series of other measures to protect homeowners, such as 'support for mortgage interest', which assists the homeowner with the interest on their mortgage.
Up until 1970, lenders had the right to repossess a property at any time – even if a borrower was keeping up to date on their mortgage payments. However, this changed wit the introduction of the Administration of Justice Act, which prevented any repossessions as long as the borrower could meet future mortgage payments and gradually pay off their arrears over time.
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Lenders forced into court for repossessions

This is Money
29 December 2009, 4:42pm
Reader comments (1)

Lenders will be prevented from repossessing and selling properties without the permission of a court, the government announced today.

Justice: Lenders must obtain a court order before they can repossess
New plans are afoot to close a legal loophole that enables lenders to repossess homes without the consent of either the homeowner or a court.

The announcement comes after a scandal last year exposed the ability to do this as a lingering weakness in the law.

When one borrower fell into arrears last year, a lender repossessed his property and then managed to evict him from the house on the grounds of trespassing.

But the mortgage lender had never been granted a repossession order – which, at the time, was not required by the bounds of the law.

The Ministry of Justice said while there was no evidence that other lenders were repossessing properties without court orders, it wanted to close the loophole.

The Government also said more than 33,000 people had been helped during the year to the end of September by a scheme under which homeowners facing repossession hearings at courts are given free advice.

It said on average 76% of people helped through the scheme were able to return home immediately following the hearing. They were also given help on the best way to avoid future repossession proceedings.

Justice Minister Bridget Prentice said: 'Losing your home is one of the most traumatic events anyone can face, and the Government is working hard to ensure that this never happens before borrowers have received all the help available to them, including financial assistance and debt advice.

'These schemes have helped prevent thousands of homeowners being taken to court by their lenders.

'And in those cases which do end up in the court, we're providing last-minute specialist advice, often making a dramatic and very real difference in preventing repossessions and evictions at the 11th hour, for both mortgagees and tenants.'

The Government has launched a raft of schemes to help struggling homeowners, including the Mortgage Rescue Scheme, under which people can sell some or all of their home to a social landlord and rent it back, as well as the Homeowner Mortgage Support scheme which enables people to defer paying interest on up to 70% of their mortgage for up to two years.
The schemes, combined with lender forbearance and low interest rates, have caused the Council of Mortgage Lenders to slash its prediction for the number of people who will lose their homes this year by a third to 48,000, although this will still be the highest figure since 1995.

Ending 'Horsham' possessions

Ending 'Horsham' possessions

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