Joint owner stopped paying life policy, what to do.

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lylolil

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The joint owner of my PPR left and stopped paying anything into the mortgage for last two years. I was contacted by the Life Assurance company today to say they have now stopped paying the policy on their life linked to the mortgage. I have a separate policy on my own life. The policy will lapse in a week should I try to pay it? I am already struggling trying to slowly pay off arrears. Mortgage is with IBRC now Lonestar.
Thanks
 
Don't even consider taking on yet another financial burden.

The joint owner's life policy is of no relevance to you given that they are not contributing to the mortgage at the moment so their death would not put you in a worse position than you are now.

Your objective now should be to get the joint owner off the mortgage (if there's any equity in the property) or to crystallize the losses quickly (if you're in negative equity) to make sure the other party doesn't leave you taking responsibility for the loss on their investment.

In practical terms (assuming negative equity) the ideal solution here would be for them to make a payment to you covering their share of the current loss at the same time as you take over full ownership of the property and have them removed from the mortgage: none of these steps may prove possible.

Another solution you would have is to sell the property but you are liable for all of any shortfall in the sale proceeds if the lender does not bother to chase the other party, and there is some evidence in your post that they are more likely to be successful chasing you than the joint owner.

A strategy you may want to consider is to stop paying the mortgage and see if the fear of being chased by the lender would make the joint owner start contributing again or at least amenable to a permanent solution.

But there is nothing in it for you to keep going as you are...the only parties gaining from the current situation are the lender and the joint owner. The life policy issue is a red herring; get the bigger issue sorted.
 
Hi Oysterman,

Many thanks for your advice. Bank wont let the joint owner off the mortgage I've tried. The negative equity if I sold now is so large 100,000 grand approx that I couldn't hope to pay it and I'd still have to find new accomadation and pay for that. The co owner given past behaviour will leave me to face that entire shortfall and the bank sees me as the Mark. I will focus on my main problem of paying the mortage .
Thanks again.
 
The bank may opt to pay the other persons annual mortgage protection policy. They may just debit the mortgage with the policy premium. If the bank can get an insurance company to clear the debt should anything happen to the other party then they would pay it.
In the end if you continue to clear the mortgage arrears you will end up also paying the other persons mortgage protection policy as well.
The bank are getting you to clear the lot.
 
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