In what cases can the lender demand to sell mortgage housing?
According to the mortgage law, if the borrower has overdue four or more loan payments in a year, the bank has the right to demand early repayment of the debt and recover the mortgaged housing through the court.
If the client decides to sell the property himself in order to pay off the loan, the bank can meet him halfway and settle the case before the court. But, as a rule, the lender is not ready to wait long and agrees to this option only when the borrower has already found a buyer.
As a rule, the courts almost always take the side of the bank. Do not count on the judge to take pity and forbid the sale of real estate if the family does not have another apartment or house.
By law, mortgaged housing can be recovered and sold, even when a person has only one.
By court decision, the borrower will have to pay the lender the balance of the debt with interest, penalties for late payments and reimburse the costs of the case in court. The court's ruling will also indicate that your home must be sold at auction.
Does the bank have the right to force the mortgage to be repaid ahead of time due to the delay in the consumer loan?
No. The debts on two different loans are not directly related.
The bank has the right to demand early repayment of the mortgage only if you:
But if you do not repay the consumer loan, the bank can go to court, get a writ of execution and forcibly write off the amount of debt from your accounts. It is possible that after that you will not have enough money to pay the mortgage – then you risk losing the mortgaged housing.
Can it happen that the apartment will be sold at a reduced price and the debt will not be repaid?
Yes, there is such a risk. The court appoints the initial auction price in the amount of 80% of the market value of housing, which it takes from the appraiser's report. Such a report is always made before housing is secured.
If the auction does not take place, for example, because no one wants to buy your home, then a repeat auction will be held within a month. The initial sale price for them will be reduced to 68% of the market value.
In the case when it is not possible to sell the property from the second time, the lender takes it for himself for 60% of the market price. The borrower's debt to the bank will decrease by this amount. Then the bank will try to sell the housing on its own.
If the price of the apartment at which it was sold at auction, or the cost at which it went to the creditor, is more than the debt, you will be paid the difference.
But it may happen that even after you lose your home, the debt will still not be fully repaid. Then the bank will try to recover the rest.
Therefore, if housing has risen in price since its purchase on credit, ask the court to conduct an examination of its value. Then both the initial auction price and the amount at which the property will be offered to the lender (if the auction does not take place) will be higher.
How quickly will housing be sold?
As a rule, this procedure takes from several months to a year, since it consists of a number of mandatory stages.
If I suddenly have money, can I buy my own home at auction?
No, the debtor and his family members are prohibited from participating in the auction. But you have the right at any time to repay the debt before the sale of housing.
If neither the first nor the second auction takes place and the bank takes the collateral, you can try to negotiate with him about the repurchase of housing. But the bank has the right to set any sale price or refuse to sell your former home to you at all.
My husband and I agreed to pay the mortgage equally, but he stopped making his part of the payments. Is it possible to divide the housing that is pledged so that my half is not sold?
Even if the shares of each spouse are allocated, the property will still remain pledged. If the bank does not receive payments on the loan on time and in full, it will demand to sell the mortgaged apartment or house entirely.
Can I sell the mortgaged apartment myself, pay off part of the debt and buy another one, cheaper?
When the property is pledged, you can live in it, but you can sell it only with the consent of the lender.
Sometimes banks give permission to sell, but only on condition that the debt will be completely closed at the expense of the proceeds. In such cases, the contract of sale directly prescribes that the buyer will transfer the required amount to the bank to repay the loan, and not to you as a seller of housing.
You will only get the difference between the sale price and the outstanding balance. Perhaps this will be enough to buy another home or at least make an initial payment on another mortgage, with a smaller amount.
At what point are tenants evicted from mortgaged housing?
Housing is put up for sale, even if people are still registered and live in it. Usually bailiffs and auction organizers do not even enter the apartment or house to inspect them. And buyers most often cannot see the condition of housing, they focus only on its address, area and layout.
And only when the property has a new owner, he will have to go to court and demand that the former owners be deprived of the right to use housing. It can take a couple of months, and sometimes more.
If the previous tenants do not agree to leave voluntarily, then as soon as the court decision on eviction comes into force, the buyer turns to the bailiffs, and they vacate the living space.
Is it true that children, disabled people and pensioners cannot be evicted from mortgage housing?
No, a mortgaged apartment or house can be sold and evicted by any tenants if the borrower has stopped paying on the loan. Children are always registered — and removed from registration — together with their parents. Even when minors owned part of the mortgage housing, it can still be auctioned off, and children can be evicted.
What to do in order not to lose the mortgaged housing?
To prevent borrowers from losing their apartment or house due to temporary loss of income, the law allows them to take mortgage holidays.
If the financial situation does not recover completely, you can contact the bank with a request to restructure the loan — change the amounts and payment schedule, for example, reduce monthly contributions and extend the repayment period.
In situations where market interest rates on mortgage loans are declining, it makes sense to consider options for refinancing debt in other banks. Such re-crediting often allows you to reduce payments.
But in any case, we must try to prevent delays in order to remain a reliable borrower in the eyes of banks. If you just stop making payments, then the matter can really come to the sale of housing at auction.
According to the mortgage law, if the borrower has overdue four or more loan payments in a year, the bank has the right to demand early repayment of the debt and recover the mortgaged housing through the court.
If the client decides to sell the property himself in order to pay off the loan, the bank can meet him halfway and settle the case before the court. But, as a rule, the lender is not ready to wait long and agrees to this option only when the borrower has already found a buyer.
As a rule, the courts almost always take the side of the bank. Do not count on the judge to take pity and forbid the sale of real estate if the family does not have another apartment or house.
By law, mortgaged housing can be recovered and sold, even when a person has only one.
By court decision, the borrower will have to pay the lender the balance of the debt with interest, penalties for late payments and reimburse the costs of the case in court. The court's ruling will also indicate that your home must be sold at auction.
No. The debts on two different loans are not directly related.
The bank has the right to demand early repayment of the mortgage only if you:
- delayed payments on this mortgage loan;
- refused to insure mortgaged real estate (or the term of the policy has expired) and did not issue a new insurance contract within 30 days;
- sold or donated mortgaged housing without the consent of the bank;
- grossly violated the rules of its use, maintenance or repair.
But if you do not repay the consumer loan, the bank can go to court, get a writ of execution and forcibly write off the amount of debt from your accounts. It is possible that after that you will not have enough money to pay the mortgage – then you risk losing the mortgaged housing.
Can it happen that the apartment will be sold at a reduced price and the debt will not be repaid?
Yes, there is such a risk. The court appoints the initial auction price in the amount of 80% of the market value of housing, which it takes from the appraiser's report. Such a report is always made before housing is secured.
If the auction does not take place, for example, because no one wants to buy your home, then a repeat auction will be held within a month. The initial sale price for them will be reduced to 68% of the market value.
In the case when it is not possible to sell the property from the second time, the lender takes it for himself for 60% of the market price. The borrower's debt to the bank will decrease by this amount. Then the bank will try to sell the housing on its own.
If the price of the apartment at which it was sold at auction, or the cost at which it went to the creditor, is more than the debt, you will be paid the difference.
But it may happen that even after you lose your home, the debt will still not be fully repaid. Then the bank will try to recover the rest.
Therefore, if housing has risen in price since its purchase on credit, ask the court to conduct an examination of its value. Then both the initial auction price and the amount at which the property will be offered to the lender (if the auction does not take place) will be higher.
How quickly will housing be sold?
As a rule, this procedure takes from several months to a year, since it consists of a number of mandatory stages.
- Consideration of the case in court. Usually the court appoints several sessions and only then makes a decision.
- Transfer of the case to the bailiffs. After the court decision comes into force, the creditor submits the writ of execution to the Bailiff Service (FSSP). The bailiffs will first offer you to pay off the debt yourself and give you a few days to do so. If you do not meet this deadline, the representatives of the FSSP will begin to comply with the court order.
- Debt collection. First of all, bailiffs are trying to write off the debt from the debtor's bank accounts. If they find the right amount on them, then the sale of real estate will be canceled.
- Sale of real estate at auction. If there is not enough money on the accounts, the apartment or house will be put up for auction. The bailiffs themselves are not engaged in bidding — they will transfer the case to the contractor. Those will hold public auctions, in which those who wish to purchase your home will be able to participate.
- Transfer of housing to the bank. If no one wants to buy your property, it will go to the lender.
If I suddenly have money, can I buy my own home at auction?
No, the debtor and his family members are prohibited from participating in the auction. But you have the right at any time to repay the debt before the sale of housing.
If neither the first nor the second auction takes place and the bank takes the collateral, you can try to negotiate with him about the repurchase of housing. But the bank has the right to set any sale price or refuse to sell your former home to you at all.
My husband and I agreed to pay the mortgage equally, but he stopped making his part of the payments. Is it possible to divide the housing that is pledged so that my half is not sold?
Even if the shares of each spouse are allocated, the property will still remain pledged. If the bank does not receive payments on the loan on time and in full, it will demand to sell the mortgaged apartment or house entirely.
Can I sell the mortgaged apartment myself, pay off part of the debt and buy another one, cheaper?
When the property is pledged, you can live in it, but you can sell it only with the consent of the lender.
Sometimes banks give permission to sell, but only on condition that the debt will be completely closed at the expense of the proceeds. In such cases, the contract of sale directly prescribes that the buyer will transfer the required amount to the bank to repay the loan, and not to you as a seller of housing.
You will only get the difference between the sale price and the outstanding balance. Perhaps this will be enough to buy another home or at least make an initial payment on another mortgage, with a smaller amount.
At what point are tenants evicted from mortgaged housing?
Housing is put up for sale, even if people are still registered and live in it. Usually bailiffs and auction organizers do not even enter the apartment or house to inspect them. And buyers most often cannot see the condition of housing, they focus only on its address, area and layout.
And only when the property has a new owner, he will have to go to court and demand that the former owners be deprived of the right to use housing. It can take a couple of months, and sometimes more.
If the previous tenants do not agree to leave voluntarily, then as soon as the court decision on eviction comes into force, the buyer turns to the bailiffs, and they vacate the living space.
Is it true that children, disabled people and pensioners cannot be evicted from mortgage housing?
No, a mortgaged apartment or house can be sold and evicted by any tenants if the borrower has stopped paying on the loan. Children are always registered — and removed from registration — together with their parents. Even when minors owned part of the mortgage housing, it can still be auctioned off, and children can be evicted.
What to do in order not to lose the mortgaged housing?
To prevent borrowers from losing their apartment or house due to temporary loss of income, the law allows them to take mortgage holidays.
If the financial situation does not recover completely, you can contact the bank with a request to restructure the loan — change the amounts and payment schedule, for example, reduce monthly contributions and extend the repayment period.
In situations where market interest rates on mortgage loans are declining, it makes sense to consider options for refinancing debt in other banks. Such re-crediting often allows you to reduce payments.
But in any case, we must try to prevent delays in order to remain a reliable borrower in the eyes of banks. If you just stop making payments, then the matter can really come to the sale of housing at auction.