Raworths LLP
The Duties of Mortgage Lenders The Duties of Mortgage Lenders

Legal Articles

Jan 16

The Duties of Mortgage Lenders

When mortgage arrears are serious and/or there is a breach of the mortgage covenants, the lender will usually seek an order for repossession of the property. Once it has possession, it will normally sell it with vacant possession. If this course is taken, it becomes responsible for the maintenance of the property from the date on which repossession is granted. The lender owes the borrower a duty of care and is accountable to the borrower for its conduct in dealing with the sale, but that duty does not extend to obtaining the best possible price on sale – it must obtain the ‘true market value’ or ‘proper price’. In general, as long as the lender obtains a valuation of the property and exercises reasonable judgment, and does a reasonable job in marketing the property, it will have done its duty.

The Council of Mortgage Lenders has recently agreed a revised protocol to adopt prior to seeking repossession of properties in cases of mortgage arrears.

There is also good general advice for borrowers with financial problems  on the CML website.

Source: Private

  • « Older Entries
  • Newer Entries »

‹  Return to News / Articles

Other Articles

Sep 16

Stamp Duty Land Tax and Second Properties – The Basics

Stamp Duty Land Tax (SDLT) was brought in to replace the old ‘stamp duty’ and has been complex since its inception. Among the transactions subject to SDLT are residential property sales....

MORE

Sep 16

Bank of Mum and Dad Lending Issues

A recent report that the ‘bank of Mum and Dad’ is one of the leading sources of finance for house purchase will come as no surprise to many – it...

MORE