CeMAP Post-Completion Issues and Arrears 3

Question 1

What is an Individual Voluntary Arrangement (IVA) and how does it affect a borrower's mortgage?

Accepted Answer

It is a formal agreement with unsecured creditors to repay debts over a period, while the mortgage as a secured debt continues separately

Answer

An IVA is a binding agreement with unsecured creditors to repay a proportion of debts — the mortgage continues as normal since it is a secured debt.

Question 2

What is the process for a lender to obtain a warrant of possession after a court order?

Accepted Answer

The lender must apply to the county court for a warrant if the borrower breaches the terms of the possession order

Answer

If the borrower breaches a possession order, the lender must apply to the county court for a warrant of possession, which is then executed by county court bailiffs.

Question 3

What happens to joint borrowers when one dies during the mortgage term?

Accepted Answer

The surviving borrower typically assumes sole responsibility for the mortgage, and ownership passes by survivorship for joint tenants

Answer

For joint tenants, the right of survivorship means the property passes automatically to the survivor, who becomes solely responsible for the mortgage.

Question 4

What is a 'breathing space' scheme and how does it help mortgage borrowers in difficulty?

Accepted Answer

A 60-day legal moratorium where most creditor action, interest, and charges are frozen while the borrower gets debt advice

Answer

The Breathing Space (Debt Respite Scheme) provides a 60-day period where creditors cannot pursue enforcement action and must freeze interest and charges, giving the borrower time to get professional debt advice.

Question 5

What options are available to a borrower who cannot sell their property for enough to repay the mortgage?

Accepted Answer

Options include negotiating a shortfall agreement with the lender, a managed sale, a deed in lieu of repossession, or waiting for prices to recover

Answer

Several options exist including negotiated sales at a shortfall, payment plans for the shortfall, voluntary property surrender, or government support schemes.

CeMAP - Certificate in Mortgage Advice and Practice Practice Test

CeMAP - Certificate in Mortgage Advice and Practice Practice Test

CeMAP Post-Completion Issues and Arrears 3