Mortgage Arrears/Executor of the Estate

Thrugelmir

The possible issue that the lender is referring to. Is that you are continuing to occupy the property. As you are also executor of the estate you are potentially blurring business and personal matters. You were given a 3 month window. So should have used this to resolve either the arrears or start the process of selling the house.

Mojisola

roddo2013 wrote: »

I've been quite fortunate that the estate has been relatively uncomplicated. Creditors have nearly all been dealt with, so as you say it would come down to a negotiation between me and the lender.

Did you take advice before paying off the other debts because the mortgage should have taken priority -
https://www.bereavementadvice.org/probate-and-other-legal-procedures/insolventestates.php

roddo2013

Thrugelmir wrote: »

The possible issue that the lender is referring to. Is that you are continuing to occupy the property. As you are also executor of the estate you are potentially blurring business and personal matters. You were given a 3 month window. So should have used this to resolve either the arrears or start the process of selling the house.

I understand this, but we have had no other option to continue to occupy the property, the lender has the duty to act in our best interests (or so I've been told) if they were to repossess. The 3 month window is their standard practice after a bereavement, and they made it clear that they understood it could take longer for me to provide probate-it wasn't a set time for me to sell up. I was very lucky to obtain probate in 2 months, in some cases probate can take up to a year.
It appears to me they are trying their best to transfer the debt to me whether they think I've done my duty as executor or not. They had suggested for me to think about making payments even before probate had been granted, they have wanted me to make payments from the outset and weren't keen on me attempting to sell the property at all.


One question I do have- Is there anyone I can complain to if the mortgage company have tried to make me personally liable for the debt and put it on my credit record? At no point have they said I'm carrying out the role of executor incorrectly. I assume the ombudsman would be ultimately pointless?


Many thanks for all advice in this thread

ValHaller

roddo2013 wrote: »

One question I do have- Is there anyone I can complain to if the mortgage company have tried to make me personally liable for the debt and put it on my credit record?

Only fight on this front if they do anything. You have enough on your hands without thinking about things which have not yet happened.

Can you confirm that the property remains in your father's estate?

roddo2013

ValHaller wrote: »

Only fight on this front if they do anything. You have enough on your hands without thinking about things which have not yet happened.

Can you confirm that the property remains in your father's estate?

Yes the property remains in my father's estate, the deeds of the property are in both his and my mother's names (also deceased). The mortgage is in his name only.

grey_gym_sock

this is a very difficult situation, but there are 2 outcomes you can aim for:

(1) for you (you and your sister?) to become owners of the property. which is only possible if you can get a mortgage in your own name(s). that does not have to be with the current lender. but would require both sufficient income, and sufficient deposit (from equity in the property, plus any other cash you have available to put in).

(2) the house is sold to pay off the mortgage, or as much of it as possible.

if it's going to be (2), then there's no point in paying anything to the lender. and the liability is not yours - providing you carry out your legal duties as executor correctly.

holly_hobby

Firstly, I am so sorry for your loss, and the current circs you find yourself in, which will be making an already distressing time even more upsetting .... and I and everyone here will try and help as much as we can xx

Moving onto the issue ... most of its been said, but the reason why the current lender wants you to agree to a transfer of equity is so that they may pursue you for any debt and shortfall to mge upon sale, given that Dad is effectively out of bounds.

As it stands, the settlement of the debt is the responsibility of the executor/administrator on behalf of the deceased (ie they are acting as their proxy if you will), from the proceeds of the decds estate. Once the capital from the estate is exhausted, any remaining unpaid creditors (wholly or partially) effectively have to write off the debt, as personal debt is non-transferrable. So the method in the lenders madness, is to try and avoid having to write off any os debt, but instead make you responsible and pursuable for it.

My strong advice, would be not to pay any arrears, communicate only in writing with the lender (which will give you a clear audit trail of what was said, what they have inferred,etc, should you later wish to rely upon it).
I would advise the lender in your role as Executor, that the mge debt and arrears, will be settled from the liquidated estate, when the property has been sold - which is standard probate practice.

To which you either sell it to a 3rd party OR you seek your own mortgage, and purchase it yourself from the estate (nb - this must follow strict guidelines regarding market value etc i.e you can't be seen to pch at a artificially low pch price from the estate, if by doing so you are thereby preventing the settlement of outstanding debt and creditor accounts, as a result of any artificially low market value pch price).

If you feel a little nervous about dealting with the lender, and don't have the assistance of a probate Solicitor, may be worth engaging one to assist with the probate, or consulting CAB whom have duty solicitors you may refer to.

Main thing I want to also say is PLEASE do not feel intimidated by the lender OR under pressure to assume resposibility for the mge - as really they have no legal basis to insist upon this.

Hope this helps

Holly xx

roddo2013

holly_hobby wrote: »

Firstly, I am so sorry for your loss, and the current circs you find yourself in, which will be making an already distressing time even more upsetting .... and I and everyone here will try and help as much as we can xx

Moving onto the issue ... most of its been said, but the reason why the current lender wants you to agree to a transfer of equity is so that they may pursue you for any debt and shortfall to mge upon sale, given that Dad is effectively out of bounds.

As it stands, the settlement of the debt is the responsibility of the executor/administrator on behalf of the deceased (ie they are acting as their proxy if you will), from the proceeds of the decds estate. Once the capital from the estate is exhausted, any remaining unpaid creditors (wholly or partially) effectively have to write off the debt, as personal debt is non-transferrable. So the method in the lenders madness, is to try and avoid having to write off any os debt, but instead make you responsible and pursuable for it.

My strong advice, would be not to pay any arrears, communicate only in writing with the lender (which will give you a clear audit trail of what was said, what they have inferred,etc, should you later wish to rely upon it).
I would advise the lender in your role as Executor, that the mge debt and arrears, will be settled from the liquidated estate, when the property has been sold - which is standard probate practice.

To which you either sell it to a 3rd party OR you seek your own mortgage, and purchase it yourself from the estate (nb - this must follow strict guidelines regarding market value etc i.e you can't be seen to pch at a artificially low pch price from the estate, if by doing so you are thereby preventing the settlement of outstanding debt and creditor accounts, as a result of any artificially low market value pch price).

If you feel a little nervous about dealting with the lender, and don't have the assistance of a probate Solicitor, may be worth engaging one to assist with the probate, or consulting CAB whom have duty solicitors you may refer to.

Main thing I want to also say is PLEASE do not feel intimidated by the lender OR under pressure to assume resposibility for the mge - as really they have no legal basis to insist upon this.

Hope this helps

Holly xx

Thanks for your condolences, and that has been very helpful.

I'm going to be looking into legal advice although I'm comfortable communicating with the mortgage company (by letter). It looks like I will sell the house, and luckily have someone that is interested, so can hopefully avoid estate agent fees.

Probably a stupid question but I assume if I let the mortgage company repossess the house or "handed the keys back" then that would constitute as me not acting correctly as executor of the estate? If, as the lender previously had said, they were in the process of reposession, that wouldn't give me any chance to sell the property?

Thanks again

Thrugelmir

roddo2013 wrote: »

I understand this, but we have had no other option to continue to occupy the property, the lender has the duty to act in our best interests (or so I've been told)

The lender appears to have been fair to the estate. As that's where their obligation . They have no legal responsibility to individuals not named on the mortgage deed. There's no automatic rights to ongoing occupation.

Please take proper legal advice as soon as possible. Executors are bound by law as to their responsibilities and duties, in administering and winding up the the estate. So preference given to creditors or distribution of other assets is potentially a major issue for you.

magpiecottage

roddo2013 wrote: »

It appears to me they are trying their best to transfer the debt to me whether they think I've done my duty as executor or not. They had suggested for me to think about making payments even before probate had been granted, they have wanted me to make payments from the outset and weren't keen on me attempting to sell the property at all.

Oh that is SO poor.

I note that you are doing everything in writing - Good move. Make sure you hang on to it.

One question I do have- Is there anyone I can complain to if the mortgage company have tried to make me personally liable for the debt and put it on my credit record?

Come back here if and when it happens. If I don't spot it somebody will nudge me with a pm.

At no point have they said I'm carrying out the role of executor incorrectly.

They would not necessarily know that - but that is no excuse for misleading you.

I assume the ombudsman would be ultimately pointless?

It has to be done in the right way but I think you could give them a very hard time at FOS if they misled you.




Many thanks for all advice in this thread[/QUOTE]