Weird one. Anyone come across this before?

LHW99

We had a similar problem on an mortgage endowment policy where the policy was assigned to a previous mortgage lender had not been removed by our solicitor / the society at the time the particular property was sold. We had to locate the original mortgage lender, and who their records had then been passed on to (as the original company had been passed on a couple of times) in order to get that removed so the policy would pay out to us.

Hopefully your sellers have sufficient paperwork to go through to find that out, but as it could be 20 or more years ago, they may well have problems.

GDB2222

I suppose that your solicitor was right to forward the offer of an indemnity policy,, but he has given advice in the clearest possible terms not to accept it. Whilst it must be frustrating for you to have to wait, and I don’t blame you for wanting to vent here, you would be mad to go ahead with the policy. 

The policy is for the benefit of the deceased’s heirs, so that they can get their hands on the money sooner. 

AdrianC

rose_T said:

AdrianC said:

rose_T said:

I know 100% the previous mortgage is paid off but they didn’t go down the road of getting it legally signed off.

How do you know this "100%"...?

We are buying a property that is next door to a family member, who have known the people selling the property. Obviously they were more friendly with the lady who passed than her children. This is how I know it’s paid off. 

Somehow, I think the lender will want more than a bit of light Chinese Whispers.

saajan_12

Removing would of course be the best bet. However there is a downside to that if 
* onward transaction is delayed or falls through, can't get same value again
* purchase falls through and can't get house for same price again
* you're stuck renting for months 
* if moving far, then commuting costs / hassle build up
*..

Its very subjective how much those are worth to you. Also the issues with the indemnity might be mitigated if 
* you plan to live there for longer rather than short term
* you can agree the vendor gets the charge removed within a certain timeframe (and with a retention held until they do)
* the indemnity policy can be passed on when you sell

Of course it all depends on whether your lender agrees.
If they don't, then no go - > insist they get charge removed.
If they do, then still push to get charge removed, but at some point, depending on the above, you may want to accept the indemnity if it doesn't get resolved after x weeks. 

user1977

AdrianC said:

rose_T said:

AdrianC said:

rose_T said:

I know 100% the previous mortgage is paid off but they didn’t go down the road of getting it legally signed off.

How do you know this "100%"...?

We are buying a property that is next door to a family member, who have known the people selling the property. Obviously they were more friendly with the lady who passed than her children. This is how I know it’s paid off. 

Somehow, I think the lender will want more than a bit of light Chinese Whispers.

I presume though there is sufficient evidence to persuade the indemnity insurer to offer a policy, otherwise everybody would be using it as a money-saving way of paying off their mortgages...

Scotbot

rose_T said:

AdrianC said:

rose_T said:

Yes, we want this removed before we proceed. And yes it’s Scotland. 

I know 100% the previous mortgage is paid off but they didn’t go down the road of getting it legally signed off.

How do you know this "100%"...?

My problem now would the executors have trouble trying to get this signed off?

That depends on how much paperwork they have for this old mortgage, and probably also who the lender is.

We are happy to wait for it to be done but would like a rough time frame of how long it can take for sellers solicitor to get this done

How long is a piece of string?

It might be a day or two. It might be near-impossible with the paperwork available. The mortgage may yet turn out to have an outstanding balance.

We are buying a property that is next door to a family member, who have known the people selling the property. Obviously they were more friendly with the lady who passed than her children. This is how I know it’s paid off. 

No you don't.  You know someone who knew the seller who thinks she paid it off.  Maybe she did maybe she didn't. Maybe she had financial difficulties and didn't tell her neighbour. 

rose_T

Thanks for all your replies. 

I will be taking my lawyers advice and in no way will go ahead with the sale without the security deed signed off. 

sheramber

It used to be common to leave a minimum amount on the mortgage - often £1- so that the mortgage company continued to look after the deeds.