The term used when a financial or lending institution repossesses or ‘takes back’ the item which was used to secure a loan in the event of the loan defaulting. This is commonly used to refer to home repossession when a mortgage has gone into default, but may also be used to describe other items use for collateral, such as cars.
If a lender seeks possession of a house, there is a strict protocol set out from guidelines by the Council of Mortgage Lenders (CML), whereby the mortgage provider follows certain steps to try and resolve the issue satisfactorily. If these steps fail, the lender may apply to the Court for a possession order. If this is granted, the lender will repossess the property.