What is a Home Repossession?

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  • Written By: Alicia Sparks
  • Edited By: Heather Bailey
  • Last Modified Date: 10 February 2020
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A home repossession takes place when a homeowner doesn’t make his mortgage payments and his bank or other lender takes back possession of the home. Perhaps the simplest way to avoid home repossession is to make the mortgage payments on time, but depending on the owner’s financial situation this might not be an option. The bank will go through a series of steps with the homeowner before repossessing the home, and there might be several options available to the homeowner to save or sell his home. If the situation ultimately comes to foreclosure and repossession, the former homeowner should talk with professionals experienced with the area’s home repossession laws. Such a professional can help the former owner learn about additional money owed to the bank and the possibility of repossession with bankruptcy.

A bank or other lender can send a notice of foreclosure and repossession if a homeowner falls significantly behind in his mortgage payments. The definition of “significantly” will vary depending on the lender and the area’s laws regarding home repossession. The bank won’t immediately evict the homeowner. Usually, the bank provides a certain time period to allow the homeowner to try to bring his mortgage payments up to date. This time period also varies depending on the lender and laws, but in most cases it’s a few months.


Sometimes, the bank will work with the homeowner, privately or during a legal hearing, to help him get his mortgage payments up to date and avoid bank repossession. If this isn’t an option, the homeowner can talk with a bank representative or a foreclosure counselor about available foreclosure resources. Some areas have government and even privately owned organizations in place to help homeowners at risk for foreclosure and repossession. If all else fails, the homeowner might be able to sell the home. When considering this route, it’s best to work with a real estate agent who’s experienced in home repossession situations and can make sure every legal requirement is met.

If none of the above options work, the bank will most likely move to finalize the home repossession. Depending on the bank and the area’s laws dealing with the handling of a repossessed house, the former homeowner will have certain responsibilities to meet. For example, first-time buyers and investors are often in the market to buy a repossessed house because of the generally lower price tag. If the sell doesn’t help the bank completely recover its losses, however, the original homeowner might have to pay the difference. Also, areas have laws regarding repossession with bankruptcy, so if the original owner is interested in filing for bankruptcy he’ll first need to find out if it’s a possibility.


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