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Guest Charlie The Tramp

Mortgage Repossession Statistics

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i think there is a problem in the actual numbers of houses being reposessed. something strange is going on with the percentage rate of orders made to the actual reposession numbers.

in 2001 the %age rate was 38%

in 2002 the %age rate was 29%

in 2003 the %age rate was 19%

in 2004 the %age rate was 13%

so if u use the total 2005 figure for orders made of 70844 and compare it with the number in 2001 (47829),

this gives a rise in orders made of 48% which is massive. (and the same as the %age rise in actions entered)

but if u use 2004's %age rate of conversion ( + it may well be lower still if the trend continues), then the number of actual reposessions will only be about 9200, which is half the number in 2001.

does anyone know why the %age rate between orders made and houses reposessed has reduced so dramatically? has there been some change in the legal protection offered to home owners? or are they being given the chance to mew to pay off their arrears?

whatever the reason is it is cutting the number of actual reposessions massively. (i hope it is not mewing 'cos, whilst reposession is completely devastating, loading up more debt may well be worse.)

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i think there is a problem in the actual numbers of houses being reposessed. something strange is going on with the percentage rate of orders made to the actual reposession numbers.

in 2001 the %age rate was 38%

in 2002 the %age rate was 29%

in 2003 the %age rate was 19%

in 2004 the %age rate was 13%

so if u use the total 2005 figure for orders made of 70844 and compare it with the number in 2001 (47829),

this gives a rise in orders made of 48% which is massive. (and the same as the %age rise in actions entered)

but if u use 2004's %age rate of conversion ( + it may well be lower still if the trend continues), then the number of actual reposessions will only be about 9200, which is half the number in 2001.

does anyone know why the %age rate between orders made and houses reposessed has reduced so dramatically? has there been some change in the legal protection offered to home owners? or are they being given the chance to mew to pay off their arrears?

whatever the reason is it is cutting the number of actual reposessions massively. (i hope it is not mewing 'cos, whilst reposession is completely devastating, loading up more debt may well be worse.)

From what I know the courts will only repossess if it is considered that the homeowner cannot or will not be able to pay the mortgage and arrears over a reasonable period of time. A friend who works in Debt advice said that the banks and building societies will generally not request repossessions as they don't want the publicity.

What they do request is Suspended repossessions, which means they have been granted possession but the HO is given time to repay the debt, BUT the possession order still exists on the property after the arrears are cleared which means that should the HO default again at any time during the mortgage term the bank or BS can proceed to immediate repossession without going back to court. That could be 5 -10 years after the original arrears.

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"does anyone know why the %age rate between orders made and houses reposessed has reduced so dramatically? has there been some change in the legal protection offered to home owners? or are they being given the chance to mew to pay off their arrears?

whatever the reason is it is cutting the number of actual reposessions massively. (i hope it is not mewing 'cos, whilst reposession is completely devastating, loading up more debt may well be worse.)"

It could be something to do with central gov requirements on local gov to prevent homelessness. Local authorites who fail to prevent homelessness will get a roasting from ODPM and funding reductions.

Reccommended ways to prevent homelessness include the following (note especially d and l). Holding off repossession for six months could be long enough to enable the owner to sell the house and pay off the mortgage rather than allow the property to be repossessed.

a) Casework leading to reinstatement, where a household has been illegally evicted.

B) Preventing homelessness through helping a household find and secure alternative

private sector accommodation, including hostel accommodation, which has a

reasonable prospect of being available for at least a 6-month period.

c) Casework leading to resolution of any issues including Housing Benefit problems

where a private or public sector landlord has issued a notice determining the

household’s tenancy or licence.

d) Negotiation and agreement with a mortgage company or creditor where title is

held as security against any default, and legal action has commenced to gain

possession of the property.

e) Intervention to tackle disrepair or poor housing conditions where the household is

at risk of homelessness as it may be unreasonable for them to continue to occupy

that accommodation.

f) Casework assistance in helping a household successfully access a social housing

tenancy or shared ownership property, which removes the threat of homelessness.

g) Cases where there is a household member at risk of homelessness through

domestic violence and where housing advice casework intervention assisted the

person to remain in their home. This could be through the provision of security

measures, or through helping the household to instigate legal action to protect

their right to remain safely within the home.

h) Casework intervention where the control of the case and its outcome remains with

the advice service even if the ultimate action to prevent homelessness were carried

out by a third party such as CAB money and debt advice. In such cases the advice

service would have carried out the checks, provided all casework and liaised

directly with debt advice, followed up the advice and options provided by a third

party to ensure that it did prevent homelessness from occurring.

i) Casework intervention through negotiations with a landlord, agent, legal

representative, friend or family member, benefits agency or other third party which

resulted in homelessness being prevented. This may be by telephone or in writing.

Excluded is general advice to the household on what they may or should do

themselves.

j) Home visits where the direct intervention has prevented the homelessness for a

period of six months minimum and has not merely delayed it for a short period of

time. It might also include casework interventions that ensure that a household

can return to a home following a period of homelessness.

k) Intervention where an applicant faces homelessness as they cannot afford to pay an

increased rent. Casework intervention either helps the applicant to negotiate a

lower rent or increases the applicant’s income through benefits or a discretionary

housing payment, or charity payment, and removes the threat of homelessness.

l) Court representation where the case is struck out, dismissed or adjourned and as a

result the homelessness is prevented for at least six months.

Cases where the housing advice service has done no more than signpost or refer to a

third party, who are then responsible for the successful intervention should not be

included. Although signposting or referral is important, it is not an indication of the

effectiveness of the local authority’s statutory housing advice services.

BVPI on Prevention Through Housing Advice (BV213)

Paulina

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From what I know the courts will only repossess if it is considered that the homeowner cannot or will not be able to pay the mortgage and arrears over a reasonable period of time. A friend who works in Debt advice said that the banks and building societies will generally not request repossessions as they don't want the publicity.

What they do request is Suspended repossessions, which means they have been granted possession but the HO is given time to repay the debt, BUT the possession order still exists on the property after the arrears are cleared which means that should the HO default again at any time during the mortgage term the bank or BS can proceed to immediate repossession without going back to court. That could be 5 -10 years after the original arrears.

thanks for that...so suspended repossesion has superceded actual reposession. that's explains the %age decrease in actual reposession. does your friend know how the arrears are repaid?.. i suppose the loan must be rescheduled in some way.

it also explains why (despite the 48% increase in orders made) we are not seeing loads of houses up for auction. glad to see the lenders are not kicking people out without giving them a second chance...still worried about the increase in their debt burden if they reschedule.

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thanks for that...so suspended repossesion has superceded actual reposession. that's explains the %age decrease in actual reposession. does your friend know how the arrears are repaid?.. i suppose the loan must be rescheduled in some way.

it also explains why (despite the 48% increase in orders made) we are not seeing loads of houses up for auction. glad to see the lenders are not kicking people out without giving them a second chance...still worried about the increase in their debt burden if they reschedule.

Hi

from what I can gather the main consideration is that the regular mortgage payments are made with additional payments to clear the debt, this can be over years, also some lenders with after a period of time consolidate the arrears into the mortgage if the HO has been a goodboy/girl and not defaulted again. It seems at the moment that neither the courts nor the lenders wish to push for repossession I doubt this is a humanitarian gesture, they just don't want to scare off future lenders.

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Guest Charlie The Tramp

I see BBC News is giving in depth reporting of the repossession and bankruptcy figures.

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thanks for that...so suspended repossesion has superceded actual reposession. that's explains the %age decrease in actual reposession. does your friend know how the arrears are repaid?.. i suppose the loan must be rescheduled in some way.

it also explains why (despite the 48% increase in orders made) we are not seeing loads of houses up for auction. glad to see the lenders are not kicking people out without giving them a second chance...still worried about the increase in their debt burden if they reschedule.

From my experience the increase in available equity in properties means that county court judges are less likely to make an outright order for possession when an offer is made as there is little current risk to the lenders interests. Also there was a case called "Norgan" in the Court of Appeal which stated that repayment of arrears could be made up to the period of the outstanding loan (and further in exceptional circumstances) whereas previously courts were looking for arrears to be repaid in 2 years.

Does anybody actually know anyone who has been reposessed?

A lot of my clients. I have posted before that Leeds County Court have increased the number of available days to hear owner occupier repossession cases.

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should the HO default again at any time during the mortgage term the bank or BS can proceed to immediate repossession without going back to court. That could be 5 -10 years after the original arrears.

I don't think thats correct. Surely a court order on a debt is only enforcable on the debt they went to court for.

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I don't think thats correct. Surely a court order on a debt is only enforcable on the debt they went to court for.

I was suprised by this from what I can gather the possession order remains in place after the arrears have been cleared unless the judge orders it to be lifted. After the orginal arrears have been paid the HO can go back to the court to request the removal of the possession order.

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Does anybody actually know anyone who has been reposessed?

Yes, two people I knew well in the last property crash.

The first defaulted on a very large mortgage and was eventually re-possessed after a year fighting it through the courts. He was made bankrupt shortly afterwards.

The second was a BTL merchant who rapidly built up a large portfolio on a gearing of 70% loans. A combination of voids, higher IRs, and a sliding property market wiped out his £2 million portfolio and he was made bankrupt. He remarked to a friend "One minute I thought I was a millionaire and six months later I was bankrupt".

TTRTR beware.

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Guest Charlie The Tramp
Repossessions up

At the same time, the Department for Constitutional Affairs (DCA) revealed that home repossession orders also rose sharply in the final quarter of 2005.

Repossession orders have been on the increase since early 2004.

The figures show the total number of homeowners being taken to court during the final three months of 2005 by lenders pursuing mortgage debt rose 50% year on year to 31,018.

Subsequently, 18,784 mortgage repossession court orders were made, 51% of which were suspended.

The DCA's figures will add to concerns about debt and the housing market.

I have a feeling that 2006 is going to produce some horrendous stats.

But bankruptcy is not a soft option, you can lose your home and struggle to get a bank account in future," he added.

Mr Boyden predicted that if current trends continued personal insolvencies could reach 100,000 in 2006.

That was my prediction months back on this forum when the pundits were only predicting 60,000.

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I see BBC News is giving in depth reporting of the repossession and bankruptcy figures.

Not sure that would make for fascinating television... perhaps it could be shown after they've detailed recent M3 money supply data?

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From my experience the increase in available equity in properties means that county court judges are less likely to make an outright order for possession when an offer is made as there is little current risk to the lenders interests. Also there was a case called "Norgan" in the Court of Appeal which stated that repayment of arrears could be made up to the period of the outstanding loan (and further in exceptional circumstances) whereas previously courts were looking for arrears to be repaid in 2 years.

thanks for that...can i ask a few more questions..

if the arrears are repaid over the outstanding term of the mortgage then can the suspended order can last the term of the mortgage too?

do the mortgage companies have the right or desire to load the mortgage rate for those who have a suspended reposession?

and finally...are you encountering any enforcements of suspended reposessions?( will any drop in value or subsequent drop in equity affect the lenders' or judges' acceptance of risk.?) .

from what I can gather the main consideration is that the regular mortgage payments are made with additional payments to clear the debt, this can be over years, also some lenders with after a period of time consolidate the arrears into the mortgage if the HO has been a goodboy/girl and not defaulted again. It seems at the moment that neither the courts nor the lenders wish to push for repossession I doubt this is a humanitarian gesture, they just don't want to scare off future lenders.

Hi Aud

thanks for the explanation. i am concerned that the odpm will use the " hidden" suspended reposessions to skew the figures and report that reposessions are still low. i had never heard of them before today.

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