What happens the mortgage when a joint owner and borrower dies?

[Brendan Burgess]

Johnny and Mary, who are not married, have a house worth €300k and a mortgage of €400k.

Due to their age, they don't have a mortgage protection policy in place.

Mary dies.

Johnny retains his full liability for the mortgage.

But what if Mary has say €50k in her estate?

Johnny wants to keep the house. What legal steps are taken to get the house and mortgage into his name?

To make it more complicated, the mortgage is a tracker mortgage, and the bank is insisting that the house is sold and that Johnny is responsible for the shortfall.

Brendan

 

[Monbretia]

Can Johnny afford the repayments on his own on the full amount?

 

[Brendan Burgess]

Yes.

 

[mf1]

Were they joint owners or tenants in common?
Did they have any agreement in place?
Did Mary leave a will? Who is the beneficiary?
Any redress possible under the 2010 Civil Partnership and CoHabitants Act?

If he is a joint owner, the house is already in his name.

mf

 

[Brendan Burgess]

Thank mf

I was asked the question in the pub last night and I had never come across the issue before.

In most cases, there is mortgage protection in place.

I will tell him to talk to his solicitor and/or post here.

Brendan

 

[Monbretia]

Well if he can afford the repayments and he now owns the lot then the bank are going nowhere once he keeps paying.

 

[Joe_90]

If he is joint tenant the house is his.

What about the debt does that go into the estate or stay with the property. Is there anything in the mortgage document that makes it repayable?

 

[mf1]

What about the debt does that go into the estate or stay with the property. Is there anything in the mortgage document that makes it repayable?

I think the mortgage remains joint and several so it is both a charge on the property and due by each ( which includes their estate).

Not sufficiently up on mortgage deeds to know if there is anything in the mortgage document that makes it repayable.

mf

 

[twofor1]

Is there anything in the mortgage document that makes it repayable?

Danske mortgage agreements have a list of ‘’Occurrences’’ whereby the mortgage will become immediately due and payable on demand, I would guess most other lenders have similar.

There are all the usual ones, then;

If in our reasonable opinion, circumstances are so altered since the granting of the loan……..

Mary’s death would surely be a major alteration of circumstances since the loan was granted.

Could this clause or similar be the basis for the banks seemingly unreasonable insistence on selling the house.

 

[trojan]

As i see it Johnny will have to ask lender to release their recourse against the estate. If the lender is a bank and the 50K happens to be with that bank then there might be a reluctance to release these funds without maintaining some lien thereon. It is totally unreasonable to expect to have the house sold and i wonder at what level was this decision made. As previously stated death of a borrower of guarantor triggers the option of demanding payment. I would assume a solicitor would only charge a modest fee to get matters sorted out and banks usually react in a more reasonable way when dealing with solicitors ( I am not a solicitor but a long retired bank manager). When they are dealing with the "ordinary" person the easy option is often put forward initially.