New law re home repossession

[zxcvbnm]

Does anyone know exactly what the story is re this new law on home repossession?

As in - in effect can someone just basically take a break from paying their mortgage for a year before it is repossessed?
Presumably it is not that easy ?

If someone actually cannot afford to pay any payments (incl. just the interest) and then after a year again they are financially sound and are able to continue paying their mortgage will their credit rating be affected?

WHat are the main bullet point details of this ?

 

[Senna]

I'm not at all sure of the in's and outs, but for what i heard your home will not be repossessed while in the first year of missed repayments (it may be made longer than 1 year).
During this time your interest repayment will be added to the balance of your mortgage and you will incur penalties for missing payments.

So if at the start of 2009 your mortgage balance was 300k and you made no repayments in that year, at the end of 2009 your mortgage balance could be 305-310k (possibly a lot more). If your struggling to make the repayments it would be better to talk to the bank about a 'payment break' first, I know getting a break for 6 months is possible and there will be no penalty or charges.

All the new law mean is your home cant be repossessed for one year, it does not mean that you could just decide to not pay for a year and start as you left off the year before.

 

[Elphaba]

The banks are not clear on this. There are a lot of people out their losing their jobs with their homes at risk, while the big fat cats, i.e. property developers, have just stopped paying their loans. There should clearer procedures in place, I have been in my local bank and all their advertising is for pensions, investments, savings, to get money into the bank. They should have a special helpline for people in trouble, with a number of refinance options, i.e. interest only for a year, payment breaks etc. with reduced solicitor's fees. There is nothing worse than the worry of potentially losing your home, the banks (and our government) still have a long way to go to address this very important issue.

 

[obama]

The banks are undertaking not to take legal action against you in the first 12 months of arrears. However your ICB would be affected and you would find it extremely difficult to obtain credit elsewhere during and after the arrears period.

 

[Elphaba]

I dont think it is cast in stone yet, we received a solicitors letter yesterday, 3 months behind in our mortgage! Have been trying since September to restructure our mortgage, but I have had no reply. Paid 130 to have our house valued in November, have written them letters. We are with First Active/Ulster Bank, I think they are not included in the undertaking, since they have not received a bail out?