Overview

The Secured Lending Reform Bill aims to improve the rights of borrowers (mortgagors) facing repossession of their property by lenders (mortgagees). It strengthens borrower protections by limiting lender powers, increasing court oversight, and providing greater opportunities for resolving disputes.

Description

This bill makes several key changes to secured lending laws in England and Wales.

Powers of Receivers

The bill restricts the powers of receivers (appointed to manage a property in default). Receivers will require a court order before taking possession, selling the property, or initiating legal proceedings.

Abolition of Peaceable Re-entry

The bill abolishes the right of mortgagees to repossess a property without court intervention (“peaceable re-entry”), introducing penalties for non-compliance.

Counterclaims in Possession Proceedings

The bill ensures that mortgagors have a full opportunity to raise counterclaims, set-offs, or defenses in court before a possession order is granted. The court must consider these arguments before making a decision.

Extended Court Powers

The bill extends court powers to allow for stays, suspensions, and postponements of possession proceedings and to vary mortgage terms, such as interest rates and payment schedules, when deemed fair by the court.

Repeal of Redundant Section

Section 31 of the Agricultural Tenancies Act 1995 is repealed.

Government Spending

The bill's impact on government spending is not explicitly stated in the text provided. The implementation of the bill may result in some administrative costs for the government, related to the implementation of regulations and court proceedings, but no specific figures are provided.

Groups Affected

This bill significantly impacts several groups:

• Mortgagors (Borrowers): Gain stronger protections against repossession, with increased opportunities to resolve disputes and negotiate modified repayment terms.
• Mortgagees (Lenders): Face restrictions on their powers to repossess properties and increased scrutiny from the courts.
• Receivers: Their powers are significantly curtailed, requiring court authorization for key actions.
• Courts: Will have an increased workload in managing cases and determining the fairness of modified mortgage terms.

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