Posted: Wed Oct 29, 2008 12:30 pm
I have just picked this up effective 19th November
Sorry that it is a long post.
Possession Claims - Pre-Action Protocol
29th October 2008
Pre-Action Protocol for Possession Claims based on Mortgage or Home
Purchase Plan Arrears in respect of Residential Property
Following the recent downturn in the global economy and in response to the rising number of home repossessions in England & Wales, a pre-action protocol for possession claims based on mortgage or home purchase plan arrears for residential property comes into force on 19th November 2008 (there are no transitional arrangements). It should be noted that where a potential claim includes a money claim and a claim for possession the protocol applies to both.
On or after 19th November 2008, all reasonable steps should be taken to discuss with the borrower, or their representatives, the cause of the arrears, the borrower’s financial circumstances and proposals for repayment of the arrears prior to issuing a possession claim. It should also be remembered that where a claim has been issued, both parties should be able, if requested by the court, to explain the actions that they have taken to comply with the protocol.
Points to note from 19th November 2008
The protocol applies to arrears on:
• first charge residential mortgages and home purchase plans regulated by the Financial Services Authority under the Financial Services and Markets Act 2000
• second charge mortgages over residential property and other secured loans regulated under the Consumer Credit Act 1974 on residential property
• unregulated residential mortgages
The primary aims of the protocol are:
• to ensure that a lender or home purchase plan provider and a borrower or home purchase plan customer act fairly and reasonably with each other in resolving any matter concerning mortgage or home purchase plan arrears
• to encourage more pre-action contact between the lender and the borrower in an effort to seek agreement between the parties, and where this cannot be reached, to enable efficient use of the court’s time and resources
• to emphasise that where either party is required to communicate and
provide information to the other, reasonable steps should be taken to do so in a way that is clear, fair and not misleading (if the lender is aware that the borrower may have difficulties in reading or understanding the information provided, the lender should take reasonable steps to ensure that information is communicated in a way that the borrower can understand)
Where the borrower falls into arrears the lender should provide the borrower with the following:
• the required regulatory information sheet or the National Homelessness Advice Service booklet on mortgage arrears (if appropriate)
• information concerning the total amount of the arrears; the total outstanding of the mortgage or the home purchase plan; and whether interest or charges will be added (including details or an estimate of the interest or charges payable)
The lender should also do the following:
• advise the borrower to make early contact with the housing department of the borrower’s Local Authority and, where necessary, refer the borrower to appropriate sources of independent debt advice
• consider a reasonable request from the borrower to change the date of regular payment (within the same payment period) or the method by which payment is made. The lender should either agree to such a request or, where it refuses such a request, it should, within a reasonable period oftime, give the borrower a written explanation of it s reasons for the refusal
• respond promptly to any proposal for payment made by the borrower.
If the lender does not agree to such a proposal it should give reasons in writing to the borrower within 10 business days of the proposal
• allow the borrower a reasonable period of time in which to consider any proposal for payment by the lender.
• warn the borrower, by giving the borrower 15 business days notice in
writing, of its intention to start a possession claim unless the borrower remedies the breach in the agreement
A lender should consider not starting a possession claim for mortgage arrears where the borrower can demonstrate to the lender that the borrower has:
• submitted a claim to an insurer under a mortgage payment protection policy and has provided all the evidence required to process a claim
• a reasonable expectation of eligibility for payment from the insurer
• an ability to pay a mortgage instalment not covered by the insurance
If a borrower can demonstrate that reasonable steps have been or will be taken to market the property at an appropriate price in accordance with reasonable professional advice, the lender should consider postponing starting a possession claim. The borrower must continue to take all reasonable steps actively to market the property where the lender has agreed to postpone starting a possession claim.
Where the lender has agreed to postpone starting a possession claim the borrower should provide the lender with a copy of the particulars of sale, the Home Information Pack and (where relevant) details of purchase offers received within a reasonable period of time specified by the lender. The borrower should give the lender details of the estate agent and the conveyancer instructed to deal with the sale. The borrower should also authorise the estate
agent and the conveyancer to communicate with the lender about the progress of the sale and the borrower’s conduct during the process.
Where the lender decides not to postpone the start of a possession claim it should inform the borrower of the reasons for this decision at least 5 business days before starting proceedings.
ALTERNATIVE DISPUTE RESOLUTION
The court takes the view that starting a possession claim is usually a last resort and that such a claim should not normally be started when a settlement is still actively being explored. Discussion between the parties may include options such as:
• extending the term of the mortgage
• changing the type of a mortgage
• deferring payment of interest due under the mortgage
• capitalising the arrears
COMPLAINTS TO THE FINANCIAL OMBUDSMAN SERVICE
The lender should consider whether to postpone the start of a possession claim where the borrower has made a genuine complaint to the Financial Ombudsman Service (FOS) about the potential possession claim. Where a lender does not intend to await the decision of the FOS it should give notice to the borrower with reasons that it intends to start a possession claim at least 5 business days before doing so.
Well guys here you have it straight- lets try and monitor if anyone on this site has any problems.
Sorry that it is a long post.
Possession Claims - Pre-Action Protocol
29th October 2008
Pre-Action Protocol for Possession Claims based on Mortgage or Home
Purchase Plan Arrears in respect of Residential Property
Following the recent downturn in the global economy and in response to the rising number of home repossessions in England & Wales, a pre-action protocol for possession claims based on mortgage or home purchase plan arrears for residential property comes into force on 19th November 2008 (there are no transitional arrangements). It should be noted that where a potential claim includes a money claim and a claim for possession the protocol applies to both.
On or after 19th November 2008, all reasonable steps should be taken to discuss with the borrower, or their representatives, the cause of the arrears, the borrower’s financial circumstances and proposals for repayment of the arrears prior to issuing a possession claim. It should also be remembered that where a claim has been issued, both parties should be able, if requested by the court, to explain the actions that they have taken to comply with the protocol.
Points to note from 19th November 2008
The protocol applies to arrears on:
• first charge residential mortgages and home purchase plans regulated by the Financial Services Authority under the Financial Services and Markets Act 2000
• second charge mortgages over residential property and other secured loans regulated under the Consumer Credit Act 1974 on residential property
• unregulated residential mortgages
The primary aims of the protocol are:
• to ensure that a lender or home purchase plan provider and a borrower or home purchase plan customer act fairly and reasonably with each other in resolving any matter concerning mortgage or home purchase plan arrears
• to encourage more pre-action contact between the lender and the borrower in an effort to seek agreement between the parties, and where this cannot be reached, to enable efficient use of the court’s time and resources
• to emphasise that where either party is required to communicate and
provide information to the other, reasonable steps should be taken to do so in a way that is clear, fair and not misleading (if the lender is aware that the borrower may have difficulties in reading or understanding the information provided, the lender should take reasonable steps to ensure that information is communicated in a way that the borrower can understand)
Where the borrower falls into arrears the lender should provide the borrower with the following:
• the required regulatory information sheet or the National Homelessness Advice Service booklet on mortgage arrears (if appropriate)
• information concerning the total amount of the arrears; the total outstanding of the mortgage or the home purchase plan; and whether interest or charges will be added (including details or an estimate of the interest or charges payable)
The lender should also do the following:
• advise the borrower to make early contact with the housing department of the borrower’s Local Authority and, where necessary, refer the borrower to appropriate sources of independent debt advice
• consider a reasonable request from the borrower to change the date of regular payment (within the same payment period) or the method by which payment is made. The lender should either agree to such a request or, where it refuses such a request, it should, within a reasonable period oftime, give the borrower a written explanation of it s reasons for the refusal
• respond promptly to any proposal for payment made by the borrower.
If the lender does not agree to such a proposal it should give reasons in writing to the borrower within 10 business days of the proposal
• allow the borrower a reasonable period of time in which to consider any proposal for payment by the lender.
• warn the borrower, by giving the borrower 15 business days notice in
writing, of its intention to start a possession claim unless the borrower remedies the breach in the agreement
A lender should consider not starting a possession claim for mortgage arrears where the borrower can demonstrate to the lender that the borrower has:
• submitted a claim to an insurer under a mortgage payment protection policy and has provided all the evidence required to process a claim
• a reasonable expectation of eligibility for payment from the insurer
• an ability to pay a mortgage instalment not covered by the insurance
If a borrower can demonstrate that reasonable steps have been or will be taken to market the property at an appropriate price in accordance with reasonable professional advice, the lender should consider postponing starting a possession claim. The borrower must continue to take all reasonable steps actively to market the property where the lender has agreed to postpone starting a possession claim.
Where the lender has agreed to postpone starting a possession claim the borrower should provide the lender with a copy of the particulars of sale, the Home Information Pack and (where relevant) details of purchase offers received within a reasonable period of time specified by the lender. The borrower should give the lender details of the estate agent and the conveyancer instructed to deal with the sale. The borrower should also authorise the estate
agent and the conveyancer to communicate with the lender about the progress of the sale and the borrower’s conduct during the process.
Where the lender decides not to postpone the start of a possession claim it should inform the borrower of the reasons for this decision at least 5 business days before starting proceedings.
ALTERNATIVE DISPUTE RESOLUTION
The court takes the view that starting a possession claim is usually a last resort and that such a claim should not normally be started when a settlement is still actively being explored. Discussion between the parties may include options such as:
• extending the term of the mortgage
• changing the type of a mortgage
• deferring payment of interest due under the mortgage
• capitalising the arrears
COMPLAINTS TO THE FINANCIAL OMBUDSMAN SERVICE
The lender should consider whether to postpone the start of a possession claim where the borrower has made a genuine complaint to the Financial Ombudsman Service (FOS) about the potential possession claim. Where a lender does not intend to await the decision of the FOS it should give notice to the borrower with reasons that it intends to start a possession claim at least 5 business days before doing so.
Well guys here you have it straight- lets try and monitor if anyone on this site has any problems.