What to do in Mortgage Arrears?
If you have fallen behind in paying your regular mortgage payments then the bank or lender can eventually sell your property. This is generally quite a drawn out process, so if you are having trouble keeping up with your mortgage payments, speak to your bank as soon as possible.
It may be possible to make an agreement to reduce payments or pay off the mortgage more slowly. The most important thing is to communicate with the bank, so they know your circumstances and understand that you are trying your best to sort matters out rather than simply not paying for no good reason.
Under the Credit Contracts and Consumer Finance Act which came into force in April 2005, people facing financial hardship have a new statutory right to approach the lender and ask for their payment schedule to be rejigged provided they are not in arrears. Situations in which this might apply include losing your job, a relationship break-up, illness or injury.
However, the law only allows people to do this if they have not already fallen behind within repayments.This means it is important to act quickly if you think you may be getting into financial difficulties. Once you are already in arrears, the provision does not apply.
If matters cannot be sorted out at this time and arrears continue, the bank or finance company will issue a Property Law Act notice or PLA. (Info on PLA >> more)This gives you the home owner a specified period (of not less than 4 weeks) to pay the whole amount outstanding. If the home owner cannot do that, the bank can take steps to sell the house.
Houses sold at mortgagee sales are often sold for low prices, so it may be better to sell the house yourself, if at all possible. This can be done with short term finance of 7-12 months or so to stop the mortgagee sale process and allow an orderly sale OR refinance at the end of 7-12 months when you are back on your feet so you can retain the property.
mortgage is the most common remedy to stop a mortgagee sale, but you are
unlikely to be able to get another loan from a bank.
This will mean instructing Steve McGowan - Mortgage Broker to approach second tier lenders, which may charge higher interest rates and may also have additional loan fees depending on your equity in the property.
For more information on the Property Law Act 2007 >> more.
Call Steve McGowan - Mortgage Broker/Adviser on 0800 ADVOCO (0800 238 626) for a free consultation.
Call us on 0800 ADVOCO (0800 238 626) or email us.
Some of the 107 homes Steve has saved from the auctioneers hammer!
King George Avenue, Epsom.
Williamson Avenue, Grey Lynn.
Khyber Pass, Grafton.
Ivy Place, Birkdale.
Evandale Street, Glen Innes.
Whangaparaoa Road, Whangaparaoa.
Layton Road, Manly.
Kenwick Place, Pakuranga.
Scenic Drive, Swanson.
Port Waikato Road, Tuakau.
Layton Road, Manly.
Eyre Street, Henderson.
Edinburgh Street, Pukekohe.
Ivon Road, East Tamaki.
Hillsborough Road, Mt Roskill.
Israel Avenue, Clover Park.
Dawson Road, East Tamaki.
Howell Street, Mt Roskill.
Lake Road, Devonport.
Rangatira Road, Birkdale.
Levesque Street, Birkdale.
Alidade Place, Massey.
Otaua Road, Waiuku.
Ambler Avenue, Glen Eden.
Trojan Crescent, New Lynn.