The news this week that an 11.6 million pound mansion has been repossessed and forcibly put on the property market may please some, to see someone at the higher end of the market suffer, but repossession is no laughing matter. With bank lending grinding to a halt thanks to the credit crunch, and banks trying to reduce their mortgage book, Lib Dem MP Julia Goldsworthy has put forward a proposal to stop banks repossessing houses unless it is a last resort.

It is stated in the terms of any mortgage contract, that your lender has the right to issue repossession proceedings if you do not make required payments. Usually 2 months of arrears is enough for a lender to take action, but they will normally try to come to an agreement with the mortgage holders to clear the arrears and avoid court proceedings.

If the lender is not happy with the amount of arrears, or the borrower's proposal for repayment, they may take possession action in the County Court. They do this so they can take control of the property, and sell it to recover the outstanding balance of the mortgage.

If your lender contacts you about your arrears, don't ignore their letters or phone calls, if you don't respond, they are much more likely to advance with court proceedings. If you are not sure how to respond to your lenders correspondence, contact a housing aid centre or citizens advice bureau, they will be able to help you come up with a proposal to control your arrears and (hopefully) keep your home.

Letter from lender

The first letter you are likely to receive, is a reminder stating that you missed one or two payments, it will normally ask you to confirm how you intend to catch up on the missed payments, or to contact them to discuss your financial situation.

If the lender isn't happy with your proposal to repay, it will contact you again. The second letter usually states that if the arrears aren't cleared or you contact the lender within seven days, then solicitors will get involved. It is always better to speak to the lender before the solictors become involved, and a housing aid centre or citizens advice bureau would be able to help you with this.

Letters from the solicitor

Solicitors will ask much the same of you as the lender, to clear your arrears or contact them with a proposal for doing so. If they are not satisfied with your response, they can start court action without further warning.

It is still worth trying to negotiate with solicitors, even if you can't come to an agreement, the court is more likely to be sympathetic if you made an effort to get things sorted out.