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

It cancels all debts including the mortgage

Answer

It transfers the mortgage to a family member

Answer

It forces the lender to reduce the interest rate

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

The lender automatically receives a warrant when the order is made

Answer

The police issue the warrant directly

Answer

No warrant is needed — the lender can change the locks immediately

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

The mortgage is automatically repaid by the lender

Answer

The deceased's share must be sold immediately

Answer

The mortgage is transferred to the deceased's estate

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

A period where the borrower can stop all mortgage payments without consequence

Answer

A scheme to extend the mortgage term automatically

Answer

A government grant for borrowers in arrears

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

The borrower has no options and must declare bankruptcy

Answer

The borrower must pay the difference immediately from other assets

Answer

The government will cover the shortfall

Question 6

What role does the Money Advice Service play in supporting borrowers with mortgage problems?

Accepted Answer

It provides free, impartial money guidance including debt advice tools, budgeting calculators, and referrals to specialist advice

Answer

It provides mortgages directly to struggling borrowers

Answer

It negotiates directly with lenders on behalf of borrowers

Answer

It is part of the Bank of England