Many people have never been through the trauma of repossession and just the thought of it makes many of us break out in a sweat, but do we really know what will happen?
Each case is assessed individually but alot of the time if you inform the bank of your dire financial situation in time or are approximately less than 6 months in arrears your case will first be passed on to the banks pre-legal department. This department aims to assist in making repayment arrangements for clients who are in arrears, however as I said each case is assessed individually and you should contact your bank to find out what will happen in your situation.
You should then be true to your word and make the payments you have arranged.Most banks also have a system that allows for 3 strikes, if you fail to keep up your end of the bargain 3 times your case will then be passed on to the legal department. They will usually try and design another payment structure however this time they will try and have you sign a document that allows them to sell your home or property using their own agents on your behalf if you again default. Always have a qualified person assess any document like this as there could be pitfalls for you if you sign it without knowing all the consequences thereof.
This is not a pleasant situation to be in and the best advice you can get is to contact your lender as soon as you become aware of a possible problem. Each case is unique but if your situation is a temporary one they will usually be able to offer help.
When you fall behind with payments, because of losing your job for example, you must not let the bank repossess your property. If you see no light at the end of the tunnel sell your house at all cost before the bank auctions your house.
If the bank attaches your property and it goes to auction, you will sit with a blacklisting for a very long time and your loss will be bigger than selling the house yourself. The auction prices are going for 50-60% of market value at present and the banks are selling the houses at 50-60% of outstanding bond! The bank will turn on you for the difference! And that means your other assets.
Even if the bank wrights off the difference between your outstanding bond and auction price and you are rehabbed after 5 years, the bank will not give you a bond again until you pay them back!
Be pro-active and sell your house, even at a loss, to save your financial future.