Letter: Mortgage rules that protect the sincere

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The Independent Online
Sir: As a solicitor engaged in mortgage repossession work, I was interested to note Labour's concerns about the number of secondary lenders seeking possession orders (report, 6 January). However, Jack Straw is mistaken in his suggestion that lenders would seek to enforce suspended possession orders 'when the market picks up'.

Under the Administration of Justice Acts 1970 and 1973 a court can suspend a possession order if there is a reasonable likelihood of the borrower being able to discharge the arrears. The usual order made is that possession will be suspended if the borrower pays the monthly repayment plus an additional sum each month off the arrears. Provided the borrower keeps to that agreement, then in law the lender is not entitled to seek a warrant of possession, whatever the state of the market.

It is only when the borrower defaults under the terms of the order and further arrears accrue that the lender can take possession of the property. If the borrower pays what is due each and every month until all the arrears are discharged, then the possession order lapses; if arrears accrue in the future, the lender must seek a fresh possession order.

Suspended orders are not a 'Sword of Damocles' as Jack Straw would have us think. If the borrower is sincere in his intention to discharge the arrears month by month under a suspended order, then the lender cannot enforce the possession order. If, however, the borrower simply makes an offer of payment to the court in order to obtain a suspended order with no intention of payment, then it is only right that those who wish to pay little or nothing should not do so at the expense of those of us who pay our mortgages each month.

Yours faithfully,

JAN O'LEARY

Dagenham, Essex

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