Getting a write-down for paying off inherited mortgage from Pepper?

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GigaNayr

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7
Hi All,

My sole parent has recently passed away. I'm an only child and i've been left with a mortgage of about 170k from Pepper (which was bought from a bank that left the market). My parent had no life assurance to cover the mortgage due to remortgaging (still not 100% sure of the details, but there is no policy). Also, she was paying interest-only for the few years before she passed.

Aside from the house, I was left very little in terms of liquid cash to settle her affairs. All expenses have been paid out of my pocket so far, however I did very recently get a payout of a pension (around 150k).

I was speaking to a financial advisor and they gave me the advice to try negotiate a once-off payout of the mortgage, at a reduced rate. They said because the mortgage isn't in my name (never signed anything), the fact there was no life assurance on the mortgage (an oversight on peppers side) and the mortgage is due to expire in 2026, puts me in a good position to offer a lower amount to close the debt. The advisor said that because my parents mortgage is sub-prime debt, they may be willing to accept slightly less than the owed amount to put this to bed. The fact that i've inherited this debt and this is my primary residence also bodes well for my argument.

I asked my solicitor if he had experience with this kind of thing, and he didn't. He also doubted I would get anything, expecially with the payout i've gotten recently.

My question is, what do you all think? If I were to offer to pay 140k to close this mortgage (need the 10k to get my own money back for funeral, legal and other debts), how likely am I of getting accepted?
Any advice would be greatly appreciated.
 
Sorry about your loss.

I'd certainly try to offer a reduced final payment - probably try even lower (you never know...)
I'll take from your pension payout that you also have retired (or not far off)? If so, getting anything close to 75% of the debt recovered would certainly be an interesting option for the bank.
 
Thank you.

No, i'm in my mid 20s so i'm not even close to that stage haha Sorry I dind't make that clear, the pension payout I got was from my mams work pension. It's the only asset aside from the house that I was left. The advisor told me I should tell them about the payout, but tell them that I need around 10-20k to close debts and revamp the house (which isn't untrue). I just wonder how I would go about presenting this option to Pepper. Do I just ring up the customer services and tell them my story?
 
I think you need to establish the exact legal situation first.

You have inherited a house, there is a mortgage on the house. Does the bank have the right to sell the house on the death of the original owner. Or do they just have to negotiate with you to seek repayment.

It seems to me you are either in a very weak position, i.e. the bank do have a right to sell the house on the path of your mother,

or

You are in a very strong position and they do not have such a right, they have an unsecured loan to a person who is deceased and you are in a very strong position.

The reason banks require life insurance is to avoid the second situation. If they had life insurance the bank would collect the insurance and clear the loan.

What does it say on the mortgage.

You need proper legal advice.
 
That's a great point. My solicitor did tell me i have dwellers rights as this is my primary residence, and the bank would need to file an injunction to get me out. I don't know for sure if this is reflected in the contract though. I will be sure to ask this exact question, thank you for this.

I think i'm in the strong position, but like you said I can't be sure until my solicitor quotes the contract.
 
The following assumes that the 170k is a secured loan / mortgage.

What you *do* have is time. What you *don't have* is any defence to the debt not being due for payment from your late mother's estate.

In order to force a sale / repossess the property the bank must serve you, as the executor, within two years of your mother's death.

If they don't do so, the debt is statute barred.

It's very unlikely they won't start proceedings; but they have two years to do it.

It is also very unlikely that they will make any deal for less than the mortgage debt, particularly if the value of the property is greater than the debt. You haven't said what the value of the property is?

So bottom line is that you have two options.

A. Sell the property and clear the debt.

B. Settle the debt from your own resources, e.g. a new mortgage in your name and / or funds from your lump sum.

As I've said, you have some time, so if you think your mortgage prospects say next year might be better, then maybe that will be the way to go.

In the mean time I would advise that you pay the equivalent of the monthly mortgage payments into a savings account & have a lump sum to set against the interest payments when you finally reach settlement day.

If this property is your sole residence, you can earn 14k a year tax free under the rent-a-room scheme & I would strongly encourage you to do that & stash that money into your savings account as well.

Final point, do not engage with Pepper on the phone.

If they ring you, tell them to put it in writing.
 
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Thank you so much for this.

The value of the property is higher than the debt (around 300-350k ish).

So do you suggest that I don't try, out of fear of the bank serving me with sale/repossess order? I know it's unlikely, but i'd like to exhaust every option before going into further debt. I'd like to start fresh, ya know?
 
Are you absolutely sure that there's no mortgage protection policy? WAs there one in place at any stage ? I've just moved house and that was one of the conditions for drawdown which I expect is quite normal. The lender would normally hold onto the policy though I wouldn't be shocked if paperwork went missing from time to time. Did you ever discuss this with your parent? If you have access to bank account / credit union statements double check to see if there's any monthly payments going out.
 
The house is not fully paid as there is outstanding mortgage on it. In other words she hasn't left for home in inheritance for you. She has left 350k minus 170k. If you are attached to place, you should look for options to pay outstanding balance and own the place, including income from rent a room..On the other hand, you are quite young to get fixed to a place so selling and walking away with around 180k is very good option.
 
dubdub123 said:
absolutely sure that there's no mortgage protection policy? WAs there one in place at any stage ?
Click to expand...
Whilst the OP should of course double check re any life cover; it is entirely possible for a mortgage to be drawn down without life cover.
 
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GigaNayr said:
So do you suggest that I don't try, out of fear of the bank serving me with sale/repossess order? I know it's unlikely, but i'd like to exhaust every option before going into further debt. I'd like to start fresh, ya know?
Click to expand...
So if you want to 'start fresh', sell the property; you'll have your 150k + net proceeds from house sale.

Of course neither will you have anywhere to live, so you'll have to use your money towards a home.

If you like the property and want to stay there, start putting yourself in the best position to raise a mortgage, e.g. clear CC debt, overdraft etc.

170 mortgage on a 350k property is a good position to be in.

Personally, I wouldn't bother engaging with Pepper at this point; but thats your call. Either way, don't do anything over the phone. Put everything in writing.

Btw, do you have grant of probate yet?
 
Yes I'm totally sure. Pepper confirmed, as did bank of Scotland. Infact, my mam also confirmed before she passed. Also yes, checked bank accounts, credit unions, everything. She was pretty financially irresponsible.
 
Thirsty said:
In order to force a sale / repossess the property the bank must serve you, as the executor, within two years of your mother's death.

If they don't do so, the debt is statute barred.
Click to expand...

Thirsty

Can you clarify this.

A person dies with a house worth €400k and a mortgage of €400k.
The Executor does nothing. Maybe they keep paying the mortgage and so the bank doesn't even know that the borrower has died.
Two years later the Executor says "Gotcha!" They no longer owe the money.

Is that right?

Brendan
 
When I said start fresh, I meant debt free. I do need this home to love in and I'm not in the headspace to buy a new home right now. The ideal outcome would be I pay around 140-150 to close the mortgage, live here for a few years and when I'm ready, move home. Im figuring by the replies that this is not happening.

I'm going to try calling them because it can't really hurt. Worst case I ask them for the final total in writing and work my ass off to pay it off before 2026.

Thanks for your comment.
 
I'm 100% certain of the two years / statute barred; I'm reasonably sure it can only apply where bank has been notified of the borrowers death. Somewhere I have the exact bit of legislation, I'll post the link when I find it.

The OP can't dispose of the property either by sale or transferring in to their name without reference to the debt.

Edit: here's the link

Civil Liability Act, 1961, Section 9

The electronic Irish Statute Book (eISB) comprises the Acts of the Oireachtas (Parliament), Statutory Instruments, Legislation Directory, Constitution and a limited number of pre-1922 Acts.
www.irishstatutebook.ie
 
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Brendan Burgess said:
Maybe they keep paying the mortgage and so the bank doesn't even know that the borrower has died.
Click to expand...
Whilst it may sound unlikely, as long as the mortgage payments land on time and in full, its quite possible for the entire mortgage to be paid off in this way.

Of course the longer a piece of string the more likely it is to break; if there's (say) 20 years left on a mortgage, you have a greater risk than if there was say 5 years left.
 
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Hi Thirsty

My point was "Could they choose to pay the mortgage and not notify the lender. And then after two years claim it was statute barred?"

I presume that Pepper would want the mortgage cleared if the borrower died.

Brendan
 
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