Repossession is not the end of the process of property acquisition. You should not expect everything to be over and nothing left behind once your property is repossessed. In fact, there are many provisions that remain to be followed even after repossession or eviction. Find some information about what actually happens after repossession.
The first thing that the lender will do after repossessing your property is to sell it in best possible price and within the shortest span of time. Lenders do this to recover their investment amount in the property. The homeowner from whom the property has been repossessed remains responsible for the property until it gets sold. Therefore, it is in everyone’s best interest to sell the property quickly. The lenders usually approach an estate agent first. The estate agents sell the property for a commission, usually lesser than a new property. However, if the estate agent fails to sell the property, the lenders go for an auction. In auctions, the property gets sold at a much lower price and therefore it is the last step any lender would take after repossessing the property.
Even after the property gets sold, the homeowner is responsible to pay off the debt that might be left behind due to insufficient funds obtained through the sale. So, the debtor will still have to pay off the mortgage debt if the property is sold in much lower price than the actual debt. Therefore, the homeowner and the lenders look for the best possible price from the market. Even after the sale, the homeowner may still owe the outstanding amount to the lender or mortgage indemnity insurer. The lender may go to court again for recovering this money from the homeowner. So, the responsibilities of the homeowner don’t end with a sale.
Preventing a sale The sale of a property can be stopped even if the property has been repossessed. One way to do this is to prove that the property in consideration has been undervalued. This can happen if you prove the fact before the date of completion. The lenders usually have a legal responsibility to sell the property in the best possible price. So, if you think the deal that has been performed by the lender is unfair, take help of a solicitor. In many of such cases, the homeowner is compensated by the lender due to the mismatch in actual value of the property and the one decided by the lender. The homeowner can stop the sale also if sufficient money can be arranged soon after the eviction. This would need the homeowner to apply for an injunction to stop the sale when the arrangements are made. However, if the contracts with a new buyer have been exchanged, the sale cannot be stopped.
Finding a new house The homeowner would eventually need a new home after the eviction. However, due to the negative circumstances, it may get troublesome to find a new house. The homeowner can take help of advisers, especially a Shelter advice centre, Citizens Advice or other advice centres. They usually keep track of properties for indebted individuals in the local area. It may be a bit tough to get help quickly. So, it is better to prepare ahead and find out the alternatives before the actual need arises.