Understanding The Norgan Rule In Relation To Home Repossession
The Norgan Rule is often considered when your lender presses you to repay debts which you may not be able to afford. Judges and lawyers often discuss this rule in court during hearings related to mortgage arrears. The “Norgan Rule” is often called the “Norgan principle or Norgan figure”. To apply The Norgan Rule, the court and your mortgage lender will consider the remaining term of your mortgage when assessing how long you have left to pay your arrears.
For example, if your mortgage term has ten years remaining, the courts will regard this remaining term as the maximum length of time you have left to catch-up with any accumulated mortgage arrears.
If for example you have £12,000 of mortgage arrears and you have ten years remaining on your mortgage term, then if you are able to begin making your monthly mortgage payment plus a payment of £100 per month on top to clear your mortgage arrears, this would clear your arrears by the expiry date of your mortgage. The court will generally accept this as a viable payment plan and will generally stop any possession order or repossession proceedings.
This arrangement can be disadvantageous to you unless you have a genuine financial solution in place to pay the arrears plus the normal payments you were expected to make in the first place. You can offer the lender an alternative viable plan however the court can still make a possession order if it finds that you are unable to make your monthly mortgage payments.
What are mortgage arrears?
If you have missed at least one mortgage payment then you are in arrears. If you can’t make a payment or think you’re going to be late in making your monthly payment, you should contact the lender as soon as possible and ask for help and advice. Your credit history can be affected if you don’t make your mortgage payments on time however your lender may allow you to take a payment holiday (at the mortgage lenders discretion).
What steps can I take if I’m unable to pay my mortgage?
If you miss a mortgage payment, contact your mortgage lender immediately. If you communicate openly and actively, you’ll have a higher chance of avoiding serious consequences. The mortgage lender will examine all your requests but may recommend:
- The deferral of the interest incurring against your mortgage in order to lower the monthly payments.
- Extending the mortgage term and lowering the monthly payment.
- Switching mortgages to one which helps you better maintain your expenditure.
How long before my home is repossessed?
When you fail to pay your mortgage payment for more than one month, you are classified as being ‘in arrears’. This means that whoever lent you money to purchase your house is not being paid back at the agreed intervals. If this situation continues for too long, you could end up having your home repossessed by the lender in order to cover the outstanding debt. Usually, the lender will start to take action after three missed payments.
Lenders will work with you before commencing repossession proceedings since acquiring repossession is costly and time-consuming, and lenders should be willing to help before deciding to take legal action.
The number of months it takes for a home repossession can be up to 9 months. This can vary but generally it takes time. You may have various options available to you for paying off the arrears, so contact your lender and figure out a plan. Your lender may make many offers to help you manage your debt. Because foreclosure is time-consuming, the lender would prefer to work with you for a few months at least.
What are my options if the repossession process has already started?
You can avoid repossession by selling your house before the courts grants the repossession. This can be done quickly and easily. Your credit file will likely be affected significantly by the repossession and the lowered rating may stay for many years. You will receive whatever remains after the lender takes what they are owed.
Another option is to work with Hamilton Paige who can help you deal with your mortgage arrears and then look at different ways to increase your property value with a joint venture.
Are you looking for reliable funding and support for your refurbishment or build project? We are experts in property lending. From enquiry to completion, we’re here to help. If you are interested in contacting us in regards to our financial packages, you can call us on 020 8175 6977 or email us info@hamiltonpaige.com or use the contact page for more details.
Learn more on
– Stopping Homeowner Repossession or Eviction
– How to Stop House Repossession & Everything you need to know
– Can You Sell a House Before Repossession?
– Selling Your House When You’re Behind on Your Payments, In Arrears & Facing Repossession
– About Mortgage Repossession
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