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  1. #1

    Definition of "Mortgage Arrears"

    Does anybody know the official definition of "mortgage arrears" ? I don't mean "How much money ?", or "How many months ?", but more basically, is it :
    a) The lender doesn't have enough of the customer's money ; or
    b) The lender might well have enough of the customer's money, but they have managed to keep it out of the mortgage account.
    Possession decisions are based on Civil Procedure Rules Part 55, which uses the term ; but I can't find anyone in the Government who will tell me what it means.
    Option (b) would seem : seriously unfair, a change of the contract I signed, and a Human Rights violation. Does anyone else have experience of a lender claiming it, and a judge accepting it ?

  2. #2
    I would imagine it's when the customer falls behind their payment schedule, and solutions such as funding it from an overpayment pot have been exhausted. As far as I am aware if you hold funds in say a current account with the same lender then they can effectively begin debiting the repayments from that.

    I am not sure how human rights enter the equation. Whats the situation?

  3. #3
    Mortgage arrears are missed mortgage payments. If you are saying the lender misapplied the payments they are unlikely to take someone to court for repossession. Usually the account is at least 3 months in arrears before legal action started.

  4. #4
    The lender had made me an offer for PPI redress, which I thought was too small. They threatened repossession, to blackmail me into accepting it ; and when I held out for an FOS decision, they claimed possession, and got my home. Years later, I've had back much more than the mortgage arrears.
    I say that if they owed me for PPI, they had my money in time, and it doesn't matter what they called it. If that isn't true, then if I get a tax refund and call it a donation to my holiday fund, HMRC will have to pay me again, repeatedly. The government web-site on bankruptcy and PPI says the the eventual recipient was always the owner of the money.

  5. #5
    I was in the middle of PPI complaint with the FOS.
    The lender said in court, effectively, "We may well owe the customer far more than he owes us, but we have managed to keep his money out of the mortgage account, so can we have his home ?"
    The judge said, effectively, "Sure. If it isn't in the mortgage account, that's all that matters.
    Now they have paid up, it means they had enough of my money all along, and since my contract said "Pay to the bank", rather than "Pay into the mortgage account of the bank", the government evicted me on a condition that it created. The Ministry of Justice, who write the rules, can't tell me if that is the proper outcome.

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