Deceased Fathers Property

Miasmummy

Hi all, I am hoping for some advice please. My father passed away unexpectedly in November and had a property which is mortgaged with Webb Resolutions and administered by Lapithus Servicing. The mortgage is interest only. Lapithus have begun reposession proceedings as myself and my brothers decided that none of us wanted to live in the property and the mortgage is as much as the property is worth. however, we have had a change of heart and now decided we would like to keep the house and one of us will live in it. I have called Lapithus today to inform them and make an offer to pay a small amount on top of the monthly payments to clear the arrears. They informed me that i would be unable to do that and that i would have to get a new mortgage on the property with another lender. I know very little about properties which are mortgaged and the owner passes away so please forgive me if i ask a daft question but can they insist that we get another mortgage for it. If i attend the reposession hearing and re-iterate that i am prepared to pay the mortgage aswell as payment towards the arrears is the judge likely to award reposession to lapithus. As I say i dont have much knowledge on this subject so any help and advice someone could give me would be a huge help. Thanks

paulmapp8306

Someone will be along shortly, however Id think there right. The original mortgage was not lend on the basis your incomes/ougoings or credit history. I highly susspect you will need one in your own right to pay off the existing mortgage.

Miasmummy

Ah I was hoping that wouldnt be the case! Ive been told so many different things and I know some people have had some rubbish experiences with Webb/Lapithus I just needed to clarify whether they we trying to pull a fast one. Thanks paulmapp8306, if anyone else has any other thoughts or is in agreement i would appreciate it and then i can stop wasting valuable time and energy on the subject. My brain hurts!

Dave_Ham

Ok - unfortunately they will not let you take over the mortgage and make payments, even if more than the mortgage payment.

If you turn up to court (depending upon the hearing date) you are likely to be given some time to finance this yourself.

This will involve having a deposit and getting a mortgage in place quite quickly, other things being equal.

I am sorry for your loss and that you find yourself in this situation, although they had the agreement with your late Father and not anyone else..

I wish you well.

kingstreet

You can't deal with the property and the mortgage alone. They need to be part of the settlement of your father's estate.

Did your father leave a will?

Did he specify who would be the beneficiary of the property and his remaining estate?

If so, has the executor applied for probate?

If there is no will has someone taken on the role of administrator and applied to the probate office for letters of administration?

Basically, you add up all the estate's assets - cash, savings, property etc. Once you've done that, you then need to add together all the estate's debts - mortgage, loans, credit, funeral expenses.

It's the executor/administrator's role to look after the assets and ensure they are used to settle any debts and to ensure any remaining assets are passed on according to your father's will or according to the rules of intestacy.

Please answer the above questions before we move on.

Miasmummy

Hi Kingstreet, he didnt leave a will no. I did add up all of his assets and this resulted in a negative figure in the end as he had nothing apart from a large mortgage (property value doesnt exceed mortgage amount) and a loan. No insurance policies, savings, zip! and then decided (rightly or wrongly not sure) that i didnt need letters of administration as there was nothing of value to administer.

Thanks for your help

antrobus

Miasmummy wrote: »

Hi Kingstreet, he didnt leave a will no. I did add up all of his assets and this resulted in a negative figure in the end as he had nothing apart from a large mortgage (property value doesnt exceed mortgage amount) and a loan. No insurance policies, savings, zip! and then decided (rightly or wrongly not sure) that i didnt need letters of administration as there was nothing of value to administer. ....

If the only asset is a property subject to a mortgage, and the amount outstanding exceeds the value of the property then yes, that's about it. The lender will take possession of the property and sell it. They may well have recourse to the estate for any shortfall, but as there is no estate, they will just have to swallow the loss.

paulmapp8306

That will be wrongly then.

kingstreet

Ok.

As things stand, one of you is going to have to act as administrator. You still have to go through administration to appoint someone to dispose of the property and repay the estate debts.

http://www.justice.gov.uk/courts/probate

In the case of the mortgage, the administrator would have to go to the repossession hearing and defend the issuing of an order on the basis that the property would be sold to repay the outstanding mortgage.

Effectively, one of you then buys the property from the estate. This would be like any other purchase, with a new mortgage and deposit needed. The administrator would appoint a solicitor/conveyancer to handle the sale and the solicitor would need the Letters of Administration before completion could take place - this legally confirms the administrator has the right to sell the property on behalf of the estate.

The purchaser would employ his own solicitor to handle the purchase and the usual fees and costs would be involved, possibly including stamp duty (SDLT). The SDLT situation should be checked out thoroughly.

Miasmummy

Thanks antrobus, that was my understanding too so thanks for confirming

kingstreet

As antrobus says, and TBH I was leaving it to my next post, it'll probably be easier and cheaper for you to allow the property to be repossessed and for the one interested to buy it back on the open market if they have the means to do so.