CeMAP Post-Completion Issues and Arrears 2

Question 1

What is mortgage forbearance and what options might a lender offer?

Accepted Answer

Forbearance involves temporary concessions such as payment holidays, reduced payments, term extensions, or temporary interest-only periods

Answer

Forbearance means the lender writes off the entire debt

Answer

Forbearance is only available for buy-to-let mortgages

Answer

Forbearance means transferring the mortgage to another lender

Question 2

What is the Pre-Action Protocol for possession claims and what does it require?

Accepted Answer

It is a set of steps lenders must follow before issuing court proceedings for possession, including exploring alternatives and providing information to the borrower

Answer

It is a protocol for surveyors conducting property valuations

Answer

It is a procedure for registering a new mortgage

Answer

It applies only to commercial property repossessions

Question 3

What happens to any surplus funds when a repossessed property is sold?

Accepted Answer

Any surplus after repaying the mortgage debt, arrears, and costs must be returned to the borrower

Answer

The lender keeps all proceeds from the sale

Answer

Surplus funds go to the local authority

Answer

There is never a surplus on repossessed properties

Question 4

What is a Suspended Possession Order and when might a court grant one?

Accepted Answer

An order granting possession but suspending it on condition the borrower makes agreed payments towards arrears

Answer

An order preventing the borrower from selling the property

Answer

An order suspending the mortgage entirely

Answer

An order preventing the lender from changing the interest rate

Question 5

What support services should a mortgage adviser direct a client to if they are facing financial difficulty?

Accepted Answer

To free independent debt advice services such as StepChange, Citizens Advice, and National Debtline

Answer

Only to the lender's own collections department

Answer

To a private debt management company

Answer

To a solicitor for bankruptcy proceedings

Question 6

What is the effect of a bankruptcy order on a borrower's mortgage?

Accepted Answer

The mortgage remains as a secured debt, but the property may be sold by the trustee in bankruptcy to satisfy creditors

Answer

The mortgage is automatically cancelled

Answer

Bankruptcy protects the property from repossession

Answer

The lender must accept reduced monthly payments permanently