In the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...

, a lender can take possession of a person's home due to default on a mortgage. This process is incorrectly often known as "mortgage repossession"; however, assets can only be repossessed if the lender was the seller, which is often the case with cars but not usually with houses. The correct terminology is "possession". The process typically involves obtaining firstly an order for possession in the courts, then an eviction warrant. The eviction is carried out by bailiffs. Once the lender has obtained possession, it can then sell the home to recoup any lost arrears. Mortgage possession involves legal proceedings in which a

mortgagee A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan. ''Hypothec'' is the corresponding term in civil law jurisdictio ...

or other

lienholder A lien ( or ) is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. The owner of the property, who grants the lien, is referred to as the ''lienee'' and the pers ...

, usually a lender, obtains a court order for possession of a property, prior to exercising the

mortgagor A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan. ''Hypothec'' is the corresponding term in civil law jurisdictio ...

's equitable right of

redemption Redemption may refer to: Religion * Redemption (theology), an element of salvation to express deliverance from sin * Redemptive suffering, a Roman Catholic belief that suffering can partially remit punishment for sins if offered to Jesus * Pi ...

. Usually a lender obtains a

security interest In finance, a security interest is a legal right granted by a debtor to a creditor over the debtor's property (usually referred to as the ''collateral'') which enables the creditor to have recourse to the property if the debtor defaults in maki ...

from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults the lender can possess the property. Mortgage possession is not to be confused with

foreclosure Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. Formally, a mort ...

. In the United Kingdom foreclosure is a seldom used remedy which vests the property in the mortgagee with the mortgagor having no right to any surplus from the sale. Because this remedy can be harsh, courts almost never allow it. Instead, they will usually grant an order for possession and an order for sale, which mitigates some of the harshness of the repossession by allowing the sale. Mortgagors can lose their properties by default on their lease. This could occur where there is unpaid ground rent or unpaid rent on a shared ownership property. In this circumstance the property (or rather the lease) would be subject to forfeiture. Typically, a lender on these properties would pay the ground rent and add it to the mortgage debt to avoid losing their rights to the property.

External links

*
UK Citizens Advice Bureau
*
National Homelessness Advice Service
*
Financial Ombudsman Service
Mortgage industry of the United Kingdom Foreclosure