What was the reason for the arrears which have accumulated? (d) How much remains of the original term?

Cheltenham and Gloucester BS v Norgan – Gave clear guidelines on exercise of discretion of the court concerning reasonable time for repayment of arrears.

Mrs Norgan had experienced constant difficulty in meeting mortgage payments and on several occasions, actions for possession had been brought and orders postponed under the exercise of statutory discretion. Finally an action for possession was brought and granted.

Mrs Norgan appealed. CA adopted a new policy whereby the court should take as its starting point the full term of the mortgage and pose at the outset the question: Would it be possible for the mortgagor to maintain payment-off of the arrears by installments over that period? To obtain

relief, the mortgagor should present a detailed financial plan which, if implemented, would result in the loan itself, including the arrears, being paid off by the term date of the mortgage.

Evans LJ summarising the considerations that are likely to be relevant when a ‘reasonable period’ has to be established for the purposes of section 36 of the 1970 Act:

(a) How much can the borrower reasonably afford to pay, both now and in the future?

(b) If the borrower has a temporary difficulty in meeting his obligations, how long is the difficulty likely to last?

(c) What was the reason for the arrears which have accumulated? (d) How much remains of the original term?

(e) What are relevant contractual terms, and what type of mortgage is it i.e. when is the principal due to be repaid?

(f) Is it a case where the Court should exercise its power to disregard accelerated payment provisions (section 8 of the 1973 Act)?

(g) Is it reasonable to expect the lender, in the circumstances of the particular case, to recoup the arrears of interest (1) over the whole of the original term, or (2) within a shorter period, or even (3) within a longer period, i.e. by extending the repayment period? Is it reasonable to expect the lender to capitalize the interest, or not?

(h) Are there any reasons affecting the security which should influence the length of the period for payment?