Brokers and IFAs should be equipped to advise their clients about repossession and the different ways in which people can protect themselves through a period of hard times, according to the company.
Paul Thompson, CEO of ASI, commented: “Many people think they will be able to work something out if the worst happens or that they can get help from the Government via Income Support for Mortgage Interest (ISMI). Given the rise in house prices over recent years, however, the sad truth is that unless they have sufficient savings or an alternative income such as private insurance many will struggle to keep a roof over their heads.
“Although most lenders do their best to keep people in their homes, ultimately they have to protect their financial position too. After six months of a consumer falling into arrears, it is likely that most lenders will have started court proceedings. ISMI does not kick in until after nine months, which is too late for many, and only covers the interest on mortgages up to £100,000 at a flat rate rather than the actual interest rate being paid by the consumer. Many, I fear, would find themselves facing a shortfall if they are relying on it for cover.”
The approximate timings and actions for repossessions are as follows:
Stage 1: Lender’s letter(s): 1-3 months
Stage 2: Letter(s) from lender’s solicitor: 3-6 months
Stage 3: County court summons and court hearing: 4-8 months
Stage 4: Order for possession: 6+ months
Stage 5: Issue of possession warrant: 7+ months
