Guidance Leaflet

Mortgage arrears guidance leaflet 

What is a Calling-Up Notice?

• A calling-up notice is usually served by your lender when your mortgage arrears have reached a certain level. The notice effectively ends the mortgage agreement and asks you to pay back the full amount of the loan outstanding to the lender as well as any outstanding arrears. You are usually given 2 months to do this from the date notice is served. If you are unable to pay the amount owed within this period then there is a high risk that the lender will take court action for repossession of the property.

• If you have received a calling-up notice and are unsure about what to do it is important that you seek further advice. The Law Centre may be able to assist in advising you of the options available to you and may be able to enter into negotiations with the lender on your behalf.

What is a Section 11 notice?

• If your lender has served you with a calling-up notice (see above) they are also obliged to serve a Section 11 notice on your local Council. This tells the Council that your lender is intending to take action to repossess your property and that this could result in you being made homeless and in need of accommodation from the Council or elsewhere.

I am in mortgage arrears and have received a court summons. What should I do?

• If you receive a court summons for action being taken to repossess your property it is very important that you take action and seek independent legal advice. The Law Centre may be able to assist in such cases to advise on the options available and may be able to enter negotiations with your lender on your behalf.

• It is important to note that if you fail do take any action and simply ignore the summons then you risk having decree granted against you (i.e. your lender may receive a court order which will allow them to repossess your property) and you may be served with an eviction notice.

What is a Mortgage Rights Minute?

• Depending on the level of arrears and circumstances of your case it may be possible for a solicitor to lodge (i.e put to the court) a Mortgage Rights Minute under the Mortgage Rights (Scotland) Act 2001 if your lender has raised court proceedings against you to repossess your home.

• This Minute asks the court to suspend (i.e. put on hold) the lender’s rights of repossession for a certain period of time to allow you, as the debtor, additional time to take further steps to enable you to pay the arrears and meet your monthly mortgage payments.

• Once the Minute is lodged with the court a hearing will take place where the court will hear the arguments of both parties and make a decision on whether or not to allow any repossession action to be put on hold.

• In some cases it may also be possible to lodge Mortgage Rights Minute where a calling-up notice has been served (see above). This must be done within 2 months of the date the notice was served.

I am in mortgage arrears and have received an Eviction Notice. What should I do?

• A lender cannot serve an Eviction Notice without having a court order allowing them to do so.

• If you receive an Eviction Notice and have not defended the court action raised against you for repossession of your property then it may be possible for a solicitor to lodge (i.e. put to the court) a Reponing Note on your behalf.

• The Reponing Note is a court document which can be lodged by a defender in an action who has not previously lodged a defence with the court and has had decree in absence passed against them. It asks the court to give the defender another opportunity to defend the action and, in mortgage arrears cases, its effect is to put on hold any further repossession action until the case has gone back to the court.

Please note that the information above is intended only as a guide and for specific advice on any of the above or related matters we would always recommend that you seek independent legal advice.