Before taking you to court to repossess your home, your mortgage lender must follow the rules outlined in the pre-action protocol.
Pre-action protocol rules
If you have mortgage arrears your lender can take you to court to repossess your home.
To do this, your lender must follow pre-action protocol rules. This means your lender should only take court action as a last resort and after other options haven't worked.
Lenders duties before starting court action
Your lender must treat you fairly. They must consider any reasonable suggestions you make to pay off your arrears.
Before taking any steps to repossess your home, your lender must try to discuss your finances with you and give you a reasonable chance to pay the arrears.
They must send you one of these leaflets offering advice on steps you can take to keep your home:
- National Homelessness Advice Service (NHAS) booklet on mortgage arrears
- the Financial Conduct Authority (FCA) information sheet on arrears or the FCA information sheet on default.
Your lender must give you details of:
- your payments over the past two years
- your monthly instalments
- the amount of your arrears
- how much is left to pay on your mortgage
- the interest or charges that will be added
Your lender must communicate with you in a way that's clear and easy to understand.
Tell your lender if you find it difficult to understand any information they send you.
Rules that apply to borrowers
Some pre-action protocol rules also apply to you. If the case gets to court, you'll need to be able to show that you:
- kept in touch with your lender and that you acted responsibly (by responding to phone calls and letters from your lender)
- explored all available options for paying off arrears
- tried to negotiate with your lender to come to an arrangement
Proposals for how to deal with mortgage arrears
Your mortgage lender must consider any proposals you make for repaying your mortgage arrears. If your lender doesn't accept your suggestions, they must write to you within 10 working days to explain why.
Your lender must also look at any other reasonable suggestions for keeping your home. If your lender makes a proposal for you to clear your arrears, it should be easy to understand. You should be given a reasonable amount of time to consider it.
Keep to any agreement you make with your lender. If you don't your lender can take you to court after giving you 15 working days' notice.
Find out more about how to make a proposal to your lender.
When your lender should delay court action
The pre-action protocol says your lender shouldn't start court action if you are likely to get a payment after you have:
- made a claim under a mortgage payment protection policy
- applied for support for mortgage interest (SMI) or universal credit for help with mortgage costs
You will need to show your lender that you can pay what you owe for any period not covered by your claims and cover any shortfall.
Your lender should delay court action if:
- you're getting help from your local council under a mortgage rescue or homeless prevention scheme
- your income is about to improve enough for you to pay your mortgage (for example you've been offered a better paid job or you're taking in a lodger)
- you've made a complaint to the Financial Ombudsman Service (FOS) about how your lender dealt with your arrears
- you are taking steps to sell your home at a realistic price
If your lender agrees a delay while you sell your home
You can ask your lender to delay repossession while you try to sell your home.
If your lender agrees to delay court action, you must:
- give them details of any offers you get
- show them the Energy Performance Certificate (EPC) for your home or proof that you've arranged for the property to be assessed
You should give your estate agent and solicitor permission to contact your lender directly about the progress of any sale.
If you have tenants
The pre-action protocol doesn't cover buy-to-let mortgages.
Your lender should check if you have tenants. Your tenants might have the right to stay even if your home is repossessed.
If your lender doesn't follow the rules
If your lender doesn't follow pre-action protocol rules, the court could:
- delay the repossession court hearing to give you time to negotiate with your lender
- order the lender to pay your legal costs
- stop your lender from adding their costs on to what you already owe them
Get legal advice before the court hearing if you think your lender hasn't followed the rules.
Get advice from Shelter you're at risk of losing your home.
Call Shelter's free advice helpline on 0808 800 4444.