Mortgage repossession
Encyclopedia
Mortgage Repossession
In the UK, the repossession of a person's home due to default on a mortgage is known as mortgage repossession. 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 repossession involves legal proceedings in which a mortgagee, or other lienholder, usually a lender, obtains a court order for possession of a property, prior to exercising the mortgagor's equitable right of redemption
. Usually a lender obtains a security interest
from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults
the lender can repossesses the property. Mortgage repossession is a form of repossession
.
Mortgage Repossession is not to be confused with foreclosure
. In the United Kingdom
foreclosure is a little 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.
In the UK, the repossession of a person's home due to default on a mortgage is known as mortgage repossession. 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 repossession involves legal proceedings in which a mortgagee, or other lienholder, usually a lender, obtains a court order for possession of a property, prior to exercising the mortgagor's equitable right of redemption
Redemption value
Redemption value is the price at which the issuing company may choose to repurchase a security before its maturity date.A bond is purchased at a discount if its redemption value exceeds its purchase price. It is purchased at a premium if its purchase price exceeds its redemption value....
. Usually a lender obtains a security interest
Security interest
A security interest is a property interest created by agreement or by operation of law over assets to secure the performance of an obligation, usually the payment of a debt. It gives the beneficiary of the security interest certain preferential rights in the disposition of secured assets...
from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults
Default (finance)
In finance, default occurs when a debtor has not met his or her legal obligations according to the debt contract, e.g. has not made a scheduled payment, or has violated a loan covenant of the debt contract. A default is the failure to pay back a loan. Default may occur if the debtor is either...
the lender can repossesses the property. Mortgage repossession is a form of repossession
Repossession
Repossession is generally used to refer to a financial institution taking back an object that was either used as collateral or rented or leased in a transaction. Repossession is a "self-help" type of action in which the party having right of ownership of the property in question takes the property...
.
Mortgage Repossession is not to be confused with foreclosure
Foreclosure
Foreclosure is the legal process by which a mortgage lender , or other lien holder, obtains a termination of a mortgage borrower 's equitable right of redemption, either by court order or by operation of law...
. In the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
foreclosure is a little 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.