Contacting your lender if you fall into arrears

As said on other pages, it is important that you keep in constant contact with your lender if you fall into arrears with your mortgage. This will likely help to delay any repossession action and most importantly if you are taken to court for a repossession order it will prove to the judge that you have been responsible about the situation.

Many sub prime lenders can be uncooperative when you are trying to negotiate to clear your mortgage arrears and I have heard of many situations where the lender has not agreed to a payment plan to clear the arrears and avoid repossession only for a judge to then agree to a fair repayment plan as they have seen that the borrower has made efforts to clear the arrears.

Here is a guide on what should be considered acceptable to clear your mortgage arrears direct with the lender although if you have a repossession order this is usually suspended with the arrears spread over a longer term including the full term of the mortgage.

• If you have missed one or two payments it is usually acceptable to clear this over 3 to 6 months
• If you have missed three or four mortgage payments 4 to 8 months is considered acceptable
• If you have up to 6 months missed mortgage payments a period of 12 to 24 months should be allowed
• Anything beyond 6 missed payments would usually be settled over a longer term

Some times it may just be best to allow the Court to decide after you have received a repossession order. This may sound too daunting but generally the first hearing is to give the borrower a chance to restructure the mortgage arrears over a period that they can afford and a suspended repossession order is issued. A Judge will very rarely allow the lender seek possession of your home, usually if there is no way you can demonstrate that you are able to make a contribution towards the mortgage arrears.

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