Mortgage and Repossession Pre-Action Protocol

The Pre-Action Protocol regulates the lead-up to the repossession process.

In the United Kingdom, when a mortgage borrower defaults on his loan, the lender may repossess the home. The lead-up to this process is governed by a set of government rules called the Pre-Action Protocol.

Community Input

When entering the repossession process, lenders are not required to consult local authorities for guidance. Community groups have criticized this because the community, not the lender, incurs the costs of supporting those who lose their homes.

Contact

The Pre-Action Protocol requires that when a borrower falls behind on her payment, the lender first must contact the borrower. The lender must, in clear and understandable terms, communicate the amount of money that is outstanding, the total amount left on the mortgage, and whether the lender will be increasing interest rates or assessing fees.

Repayment Proposals

The Pre-Action Protocol stipulates that the lender must consider any proposal for payment made by the borrower. If the proposal is declined, the lender must explain why in writing.

References

• Ministry of Justice: Pre-Action Protocol for Possession Claims based on Mortgage or Home Purchase Plan Arrears in Respect of Residential Property
• New Local Government Network: New Local Government Network