Mortgage possession orders and effects on home owners

People around the world are facing the worst financial situation. As unemplyment rate is on hike, people are unable to pay the mortgage and as a result losing their homes. This article would help you know the statistics and related posts which are concerned to this topic.

Recent economical downfall has increased the rate of unemployment and with the effect of the global credit crunch on the markets, together with recent figures from the Ministry of Justice, which reported a 17% rise in mortgage possession claims from the second quarter of 2008 when compared with the same period last year, it is likely that an increasing number of clients will get into trouble with their repayments.

Ministry of Justice figures show that mortgage possession orders – made by judges in the county courts – were up by 24% in the third quarter of 2008, compared with the same period last year.

Debt free direct provides these figures in this regard:

The FSA reported a total of 13,161 homes were repossessed by lenders in the third quarter of 2008, as households across the UK continue to struggle with home loan repayments in this grim economic climate.

While the amount of mortgage possession claims issued has only risen by 9% since the third quarter of 2007, the amount of mortgage possessions ordered by County Courts continues to rise. Regionally, Wales was the hardest hit with a 38% increase since the third quarter of 2007, while the Midlands saw the lowest increase in England of 16%.

Some 36,923 landlord possession claims were made, with 28,086 orders granted in the third quarter of 2008. This figure has risen 4% since the same quarter last year and shows that it’s not just UK homeowners struggling with finances.

Council of Mortgage Lenders says:

What happens to your mortgage debt after your home is repossessed?

After your lender takes your property into possession they have a legal duty to sell the property for the best price that can reasonably be obtained. The property will generally go on the market as soon as possible and your lender will get independent, expert advice on the price it should be sold for and the best method of sale.

If the sale of the property results in a surplus after all the money owed to the lender and any other secured lender has been repaid, then this surplus is returned you. Your lender should notify you of the surplus but if you cannot be contacted, the money will either be held by the court or your lender until you can be contacted.

But if the sale proceeds are not enough to pay off the money you owe to the lender, then there is a "shortfall debt" which you still owe your lender after possession.

Interest will usually continue to be charged on your mortgage loan until the property is sold and any shortfall is repaid. There will also be other costs charged to your mortgage account, including estate agents' costs in selling the property and legal costs.

More related articles:

* New pre-action protocol for mortgage possession claims
From "Mortgage solutions" Nine tenths of the law-what happens behind the scenes and the timescales involved

* "Mortgage Introducer" says: Mortgage arrears up but repossession figures stable