Loophole closure means thousands saved from repossession

Permalink: Loophole closure means thousands saved from repossession
by Kay Murchie

The closure of a legal loophole means that lenders will not be able to repossess a home unless they are in possession of a court order.

Following a period of consultation, the Government plans to close the loophole that previously allowed lenders to repossess people’s homes without going to court.

The decision from the Ministry of Justice comes after months of objections from debt charities which began after a judge ruled in favour of the lender GMAC-RFC in a repossession case last year.

The loophole meant that homeowners who had missed two repayments were vulnerable to immediate repossession.

The Government said that the new measures prevent “rogue lenders” using the loophole.

“Under the existing law, lenders have the right to repossess and sell a property without seeking either the agreement of the owner, or of the Courts,” Justice Minister Bridget Prentice said.

She adds: “While there is no evidence that owner-occupiers are being treated in this way, the Government proposals published today would close this loophole and prevent any future instances of ‘rogue lenders’ behaving this way.”