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Helping people facing repossession

21 November 2008

A number of recent measures have been introduced to help those at risk of losing their homes.

The government wants to ensure that we help those who might be hardest hit during a challenging economic period.

This means making sure every avenue has been explored before lenders seek to repossess homes. Repossession must be the last resort, not the first. Recent measures will further protect the most vulnerable households and we are working with lenders and others to help people avoid losing their homes.

A new mortgage arrears pre-action protocol, introduced by the judiciary, came into effect this week and is designed to help those facing possible home repossession. Lenders will be expected to be able to demonstrate to courts that they have tried to discuss and agree alternatives to repossession when borrowers get into trouble with their mortgage repayments.

We have also expanded free legal representation in county courts for households at risk of repossession. In-court duty advice desk schemes currently operate in 202 county courts in England and Wales. These schemes provide support and guidance and can secure a positive outcome for home owners allowing many to remain in their home. All county courts now display posters giving details of free advice providers.

We are currently carrying out a phased limited rollout of the Housing Arrears Pre-action Scheme. This involves the court issuing a letter from the social landlord to tenants with rent arrears inviting them to attend a meeting with a local advice provider at the court before a claim is issued.

The recent High Court decision in the Horsham case has highlighted a potential gap in the legal protection given to homeowners. While a court order is required to secure an eviction, the power to suspend an eviction while a mortgage is paid off is not available because the sale discharges the mortgage.

The government is committed to ensuring fair rules for homeowners and lenders, so officials are urgently examining the implications of the judgment to determine what action may be needed to ensure people's homes are properly protected when the owners are having difficulties paying their mortgage.

Extensive changes to the HMCS Possession Claim Online system planned for February 2009 will ensure that the information received by the defendant contains details about local advice providers and stresses the importance of seeking advice at an early stage and, from April 2009, all those bringing debt claims to court will have to provide the people who owe them money with information about how to contact them and how to get help.

It is important that households who have concerns over their mortgage seek advice at the earliest opportunity, starting by speaking to their lender.

The first port of call for anyone who finds themselves in difficulties should be their mortgage provider or lender. Even if the problem might be a temporary one, letting lenders know the situation as early as possible should mean that a solution can be agreed in a straightforward way. There is nearly always something which can be done to help take the pressure off.

Those worried about meeting their mortgage repayments or other forms of debt have a number of organisations they can turn to for advice and help:

• Community Legal Advice helpline (telephone 0845 345 4345), centres and networks.
  The helpline helped people in 44,500 debt cases and 39,000 housing cases in 2007/08. If callers to the helpline do not qualify for legal aid, advisers will direct them to other sources of help and advice.
• Shelter, the housing and homelessness charity (telephone 0808 800 4444)
  Provides assistance and advice for those facing repossession.
• Consumer Credit Counselling Service (telephone 0800 138 1111)
  A charity offering free, confidential advice and support to anyone who is worried about debt.
• Citizens Advice Bureau
• National Debtline (telephone 0808 808 4000)

They may also be able to get free legal help through legal aid from solicitors and voluntary organisations providing specialist housing or debt advice. You can use the Community Legal Advice Directory to find a legal adviser in your area.