Lenders can now reposes homes without a court order

The recent case heard in the High court means that lenders can take possession of a home after two mortgage payments are missed.

The judge in the case, which involved GMAC-RFC on a buy-to-let mortgage, based his decision on legislation from 1925.

This decision flies in the face of Government instructions to mortgage lenders to use repossessions as a last resort for when dealing with borrowers with arrears.

Most mainstream lenders are expected to abide by the Government instructions but it is feared that buy-to-let and self-cert mortgage lenders will be tempted to take possession early to mitigate their loss on the property.

Those landlords with mortgages on their rental properties need to ensure that they can maintain the payments or risk losing their investments at short notice.

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12/11/2008 11:33:24