Secured loans and second mortgages
Secured loans and second mortgages may be regulated by the Consumer Credit Act 1974. The procedures for enforcing the debt by taking possession differ from possession proceedings for first mortgages and secured loans not regulated by the Act.
This can be a complex area of law and advisers who are uncertain should refer to a solicitor or specialist money adviser.
This page explains how to work out whether or not a loan is regulated by the Consumer Credit Act 1974.
If a borrower falls behind with the payments to a secured loan or second mortgage, the lender should first send them a notice of sums in arrears before sending a default notice.
If a borrower has breached her/his credit agreement, the lender must serve a default notice before s/he can take possession proceedings.
The Consumer Credit Act 1974 regulates the serving of time orders.
Last updated: 7 February 2020