Mother on Mortgage she died no arrears

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happydude_1945

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I bought a house and my mother was on the mortgage. We thought she was going gurantor , but she is on the mortgage but not on the deeds of my house.

She never paid the mortgage and I have never missed a payment. She was in her 60s at the time of the mortgage and we got a life insurance policy that was valid for 5 years before I bought the house. The insurer would not renew and the building society would not give mortgage protection insurance when that time was up (she'd been diagnosed with cancer by then).

She waived her right to independent legal advice.

Now she has passed away and I am the executor I have 5 siblings and just discovered on talking to the building society that they believe that a debt exists to them regarding my house.

The terms and conditions of my mortgage don't mention death.

I am happy to continue paying the mortgage.

Do the building society have any right to take the proceeds from the sale of the family home?
 
That is very confusing.

There is a house with your name only on it. Therefore it has nothing to do with your siblings.

There is a mortgage i.e. a loan secured on the house. That is in your name and your mother's name.

Your mother has died, so the mortgage should be transferred to your name alone.

If you want to sell the house, you must pay off the mortgage which is secured on it.

This seems so obvious, I wonder if I have missed the question

Brendan
 
I think the question is can the bank take the proceeds of the sale of the deceased mother's house in settlement of her debt due to the mortgage on the OPs house.

I'd imagine a remortgage would be required by the OP can you get a new mortgage now?
 
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Firstly, my condolences on the death of your mother. It's difficult to deal with these issues when grieving.

Is it the case that the mortgage company want half the mortgage redeemed as one of the mortgage holders has died with no life assurance.
Would you get a mortgage now for the remaining sum under current underwriting rules
 
Joe_90 said:
I think the question is can the bank take the proceeds of the sale of the deceased mother's house in settlement of her debt due to the mortgage on the OPs house.
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OK, that makes more sense.

I am not a solicitor, but it seems to me...

The mother is on a mortgage so therefore the mortgage is a liability of the estate.

The executor must use the assets to discharge the liabilities.

So, yes, the executor must pay down the mother's mortgage from the sales proceeds of the mother's house or any other assets in the estate.

And that is fair enough. The OP would not have got a mortgage without his mother's name being put on the mortgage.

That will leave the OP with a mortgage free house if the proceeds are enough. He will have to pay his siblings from his own money.

A very odd situation.
 
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happydude_1945 said:
The terms and conditions of my mortgage don't mention death.
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Are you sure about this, a mortgage is normally repayable when one party dies, that is why people have insurance.


happydude_1945 said:
Do the building society have any right to take the proceeds from the sale of the family home?
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The probably do. The mortgage is, as has been pointed out, a debt of your mother's estate

happydude_1945 said:
I am happy to continue paying the mortgage.
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This is unlikely to be an option for you.

A new mortgage with the same or another institution is a possible solution, it would allow you to keep paying and keep your siblings share of the inheritance separate from your apartment.

The fact that only your name is on the deeds is crucial here, it would be much more complicated if your mothers name appeared on the deeds as well.

We don't know if your income and the LTV would make a new mortgage difficult, but i would think that you are in a fairly strong negotiating position with the existing institution. The fact that her name doesn't appear on the deeds seems an odd omission on their part.
 
happydude_1945 said:
So it works out great for me and awful for the brothers and sisters
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If I were a beneficiary I'd be enquiring if the bank had made enquiries about the security for the mortgage first.

Then I would be in no hurry to sell any assets in the estate until a judgement had been secured against the property that would be mortgage free as a result of the estate being relieved of its assets.
 
My mother couldn't read especially well and she didn't see a lawyer. She signed a form to say that she didn't want legal advice. We both thought she was going guarantor not going on the mortgage.
 
First port of call is to consult your solicitor. In terms of the mortgage and death of your mother death of 1 party to a loan is not necessarily an event of default. I.e. It must be stated as such on the loan agreement. Also given the circumstances the BS will have no appetite to go to court on this if the loan is being repaid on line. Talk to the BS about having the loan transferred to your own name. Should not be an issue if you have established a good repayment record on the facility.
 
I was speaking to a solicitor on another matter, and mentioned this case.

They don't see how your mother's estate is liable here, unless, as 44b says, there is something in the mortgage deed about it.

You will need a solicitor to sell your mother's house and you should ask them.

If, as executor, you are concerned, you should write to the bank and tell them that you intend to distribute the proceeds and see what action they take, if any.

If you are in arrears and the lender has sought a judgement against you and your mother it might be different.

What is the current state of the mortgage? How much arrears and how much is the loan?

Brendan
 
Thanks for all your contributions and advice.
There is no arrears on my house and amount outstanding on the loan will exceed the total sale on my mother's house (I would only be allowed 1 / 6 of that) but if you sold my house and her house you could pay the whole of mine off.

I don't earn anything close to being able to get a mortgage under the new rules for the amount outstanding (I was earning more ten years ago).

There are no arrears and no missed payments and no arrangement with the building society (like freezing or interest only etc.)
I have warned some of my brothers and sisters about this.
I am worried should I be the executor at all but no one else will do it.
I will say that one of my sisters and one of my brothers are in a hurry to sell up.

The mortgage absolutely doesn't say anything about the whole loan having to be paid back at once if somebody dies. Basically just if you miss three payments or let the place go to rack and ruin.
 
What does your solicitor say?

How much is your mother's house worth? Have you put it on the market?

Does your mother have other assets or other liabilities?

How much is your house worth? What is the outstanding mortgage?
 
As i see it the mother signed the Mortgage and when she died her estate is liable unless the bank is agreeable to release the estate. I would have thought the route to take was to ask the bank to release the estate from liability
 
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