Help please! Mortgage shortfall when buying from a deceased sellers estate.

InNeedOfLuck

Hello,

I wonder if i could ask a question in the hope that someone can advise/share their experiences.

I am purchasing a property where the seller sadly died a few days before settlement (seller hadn't signed missives prior to passing away) so i am now purchasing from the Executors of the late sellers estate as the family/Executors are still keen to sell. The seller had 2 mortgages over the property and it now appears that my offer is now a little short of one of the lenders final redemption figure.

The other party solicitors are asking that mortgage lender to accept my offer and to request they take "a hit" with the shortfall. Apparently they will get a considerable amount of the mortgage repaid from my Offer if it is acceptable to them.

Can i ask, has anyone had any experience of a situation like this whereby a mortgage lender has been asked to proceed with a sale that leaves a shortfall in the amount owed by the deceased owner, how likely is it for mortgage providers to do this an agree to such requests?

Any advice greatly appreciated!

Many thanks.

BJV

So sorry. I am waiting to complete and would be devastated if this happened to me. I can not offer any advice except to say that someone will be along soon and I am sure that they will be able to help.

InNeedOfLuck

Thank you, BJV. I know, I am at my wits end with worry. Fingers crossed someone has some positive advice/experiences to share with me. Just really hope this purchase works out!

silvercar

Is there any other money in the estate? If there is, then the lender will expect the executor to use that money to clear the mortgage. If not then it should be more straight forward than for example a seller still alive trying to persuade a lender to allow a sale with shortfall.

The problem is that the lender may insist on a full statement of the deceased's finances and the solicitor/ executor could take a while to produce this.

kingstreet

I agree with silvercar.

The only way the lender will even consider removing its charge is if the estate is insolvent and the last penny goes into settling the liability.

If not, it will simply not agree to the removal of the charge and the solicitor for the vendor will be unable to offer unencumbered title.

InNeedOfLuck

Thanks for your comment silvercar.

No there is apparently no more money in the estate for the Executors to pay the shortfall.

The seller died over 6 months ago and i believe Confirmation of Estate has been recieved. The mortgage provider has asked for information re the Estate (I assume ths is, as you suggested, to confirm there is no more money in it) along with information from the estate agents to confirm it was adequately advertised and that the best offer was obtained (mine was the highest offer)

Do you think this may be an indication that the lender is seriously considering the request from the solicitor

In your experience silvercar, is this something that mortgage lenders do do on occasion, and it is not just a long shot request

Thank you again, and im sorry for all the questions.

InNeedOfLuck

Meant to say, the solicitor is forwarding all the information required by mortgage provider to them ths week.

InNeedOfLuck

Thank you kingstreet. Would you mind explaining what an unencumbered title is please (apologies for my ignorance).

silvercar

InNeedOfLuck wrote: »

Thanks for your comment silvercar.

No there is apparently no more money in the estate for the Executors to pay the shortfall.

The seller died over 6 months ago and i believe Confirmation of Estate has been recieved. The mortgage provider has asked for information re the Estate (I assume ths is, as you suggested, to confirm there is no more money in it) along with information from the estate agents to confirm it was adequately advertised and that the best offer was obtained (mine was the highest offer)

Do you think this may be an indication that the lender is seriously considering the request from the solicitor

In your experience silvercar, is this something that mortgage lenders do do on occasion, and it is not just a long shot request

Thank you again, and im sorry for all the questions.

If they have asked for this information then it sounds like they are taking it seriously.

It does happen very occasionally. We were involved in a chain where the seller was trying to make it happen and failed - but then she was alive and her deceased husband had taken loans on the property. But they did look into the case and would have agreed had there been no other funds in his estate.

Unencumbered title is one where there are no loans taken out by the previous owner registered to the title. You would need this to get your mortgage registered as first charge on the property.

kingstreet

InNeedOfLuck wrote: »

Thank you kingstreet. Would you mind explaining what an unencumbered title is please (apologies for my ignorance).

Vendor's solicitor undertakes to purchaser's solicitor that the property is free of any charge or other liability and that the transfer can proceed unencumbered.

getmore4less

Surprised they bothered to administer the estate if the only asset is a house with secured debt more than value.

(in england they could not pay fro the funeral or take estate admin fees from the proceeds)

Probably lucky for you they did, the lender becoming the seller would be game changer.