Urgent - help with UCB mortgage trying to take house after husbands death

[Amethyst]

Posted on behalf of new member





Five years ago my husband died following a long battle with cancer and leaving me with two children and his elderly parents to look after.
He bought a house 2 years before he died which was in his sole name and mortgaged with UCB (now Nationwide). During his treatment, he fell into arrears as he was not able to work and I kept UCB informed of the situation throughout. Upon his death, I received a grant of probate and being his executor, wound his estate up. Although this house was not passed to me either in title, nor was I on the mortgage, UCB kept up a tirade of threatening letters, telling me that I would have to pay for the property. I did not have a lawyer at the time, not realising that I needed one, but I did ask my relative who was a solicitor to word some letters for me to keep them from threatening me and to give me time to sort out a way forward as the mortgage was a huge amount.

Since 2008 when my husband died, I have paid the mortgage (around £2000 per month) and maintained and repaired that house as it had been almost derelict when he died, spending over £300,000 in so doing. In November last year when I had received yet another worrisome letter stating that UCB wanted to put up the mortgage rate (already at 4.99%), I telephoned their office and was told that the house would be taken back soon anyway. This really upset me so I telephoned a solicitor who advised me that having looked into the title and mortgage on the house, that it was in fact not my responsibility and I should not have been paying all that I had. I stopped making monthly payments and consulted a solicitor who sent UCB a letter of claim, asking for compensation for some of the monies that I had wrongly paid out. After 6 months UCB wrote back that they were not in the wrong as I had legal advice at the time of my husbands death (this was only to word letters to them to stop them harassing me).

Following this, as I could not afford to continue with legal representation, I responded to UCB myself stating that I would take the case to the Financial Ombudsman and also that I would seek advice from financial experts who might be able to throw some light on this complex and very distressing situation.

To summarise, it seems that UCB should have repossessed the house at the time of their client (My husbands') death and that the property should have been sold and any excess after the mortgage was paid off, should have gone to his estate. Instead, they mounted a campaign of terrorising me both when my husband was ill and for the last 5 years.

The current position is that UCB have repeated their statement that they are not in any way culpable in this matter and they are asking that I voluntarily surrender the house (with all the improvements that I have carried out) to them.

[PlanB]

Re: Urgent - help with UCB mortgage trying to take house after husbands death

Hello *New Member* and to Legal Beagles.

A quick question. Do you want to remain in the house? If the answer is Yes then you can look at ways of you maybe lawfully gaining possession of it. If the answer is No then you should look at ways of extricating yourself from the situation on the best financial terms.

Forgive me for asking this sensitive question, but what were the wishes regarding the house in your late husband's Will?

You say the lender should have repossessed the property when your husband died five years ago leaving you two bring up two children. Maybe it was a blessing in disguise that they got that wrong

[Amethyst]

Re: Urgent - help with UCB mortgage trying to take house after husbands death

Is UCB the Nationwide BS people?

[PlanB]

Re: Urgent - help with UCB mortgage trying to take house after husbands death

Is UCB the Nationwide BS people?

Yes. UCB are a closed book lender (not offering new products) but they still exist in their own right and deal directly with their current customers. UCB specialized in *Self Cert* loans which got them into a lot of bother when the Credit Crunch came along. They shut up shop as a lender but remain a division of Nationwide.

If you have an existing mortgage with UCB it is normally portable to another property of the same value or less if the OP is thinking of moving. The complication is that the loan remains in her late husband's name and even though she has been paying it she probably doesn't have any legal right to force them to transfer it into her name. Parents often help out their kids with mortgage payments but that doesn't give them any legal interest in the property.

The OP says she's invested £300k of her own money in the property. She's not said how much equity is in the property. If there is sufficient capital available at the point of sale then I would think if she has receipts to back up her financial input she may have an argument for claiming that money back.

As yet we don't know the OP's current financial circumstances to assess whether she would pass a lender's criteria to get a mortgage in her own right. If she does then maybe the Nationwide would play ball layball:

What puzzles me is why the lender has left the status quo for five years. I have to say with the utmost of respect that a deceased person cannot own a property.

[Amethyst]

Re: Urgent - help with UCB mortgage trying to take house after husbands death

I haven't heard back from the OP but I can email her if needed.

As the couple were married at the time of the husbands death would the house not automatically pass to her ? Obviously it depends on any will, but in case of intestatcy it would go to the wife, regardless of whether she was a joint owner?

I realise that counts only if the house isn't mortgaged, but as it was, could the wife get her own mortgage on the property. It sounds as though she would have been in a position to do so had she had the correct advice at the time, asd she has been paying the mortgage at £2k a month as well as undertaking £300k worth of work on the property.

What puzzles me is why the lender has left the status quo for five years. I have to say with the utmost of respect that a deceased person cannot own a property.

That may be as she was keeping up the payments? The response has only come since she was advised to claim compensation for continuing payments on her husbands mortgage product. Is there any comeback on the solicitor who advised her to stop making payments and ask for compensation ? (that seems a bit bonkers advice to me - surely the advice should have been how to keep the house as it appears to me that was what was wanted)

[enquirer]

Re: Urgent - help with UCB mortgage trying to take house after husbands death

Five years ago my husband died [...] Upon his death, I received a grant of probate and being his executor, wound his estate up [....] He bought a house 2 years before he died which was in his sole name ...

Who is listed as the owner at the Land Registry?

What did the Will say with regard to disposal of the property?

[PlanB]

Re: Urgent - help with UCB mortgage trying to take house after husbands death

As I understand it a deceased person cannot have a property registered at Land Registry. And I'm certain that a deceased person cannot hold a mortgage account.

http://www.landregistry.gov.uk/publi...to-do-anything

The problem may have been started by lack of legal advice at the probate stage. The OP says she was the executor but doesn't say whether she took legal advice or whether this was a DIY probate.

[MDfrance]

Re: Urgent - help with UCB mortgage trying to take house after husbands death

This is a situation that I know so well as it happened to me when my mother past away in very similar circumstances around 12 years ago. The issue at the time was that although she was not in arrears, she purchased the house from the LA under a right to buy just one year before and if the house was sold there would be a significant penalty by a discount clawback to the council. Initially I had contact with a very snotty agent who stated that I would have to sell the house and settle the account or they default the loan. This was despite the pleas of the threat of being made homeless and as I was living in the house with my partner an children at the time I kept paying but decided to hit the upper level of management with a email pointing out the disgraceful attitude of the department. As sole operating executor with relative grant of probate, I agreed to take sole responsibility for payment of the mortgage and requested that it be switched to interest only payment until either the property is sold or the final date of the original mortgage. They agreed.

This is a little known fact. A property and mortgage can be held in a deceased persons name under a managed estate of a deceased person in probate, this can even be place on the land registry entries for the properties. In fact it is common practice for this to happen if there are significant assets including properties, trust funds and or beneficiaries under legal age. I found a good source of help was the inland revenue estates and trusts unit in Edinburgh who gave me many tips on what to do. The reason being is that probate law and inheritance tax go hand in hand. The most unhelpful was the probate court who told me to get a solicitor and would offer the minimal advice. In fact it took some time for them to understand the concept of a clawback being included as a debt at the time of passing.

Mortgages, like rent need to be paid and there is an irony of owned over rented property. The fact that rented property is not a possession means that the owner can seek immediate possession. In an owned property solely in the name of the deceased with a mortgage in their name, the responsibility and rights fall to the beneficiaries or executor and the mortgage company to seek a mutually beneficial agreement. It is not in the interest of a mortgage company to send in and forcibly wind up an estate unless there are pressing reasons to do so.

So in order for you to be in a better position of continual management and to take over responsibility you must have done or seem to have done the following.

Paid the mortgage continually after death. Payments you make out of your pocket to do so can be claimed back under certain circumstances on the final disposal of assets. You may find that UCB have taken on your payments as executor and therefore any recourse you have is against the estate, not the lender. When you made payments on behalf of the estate then you committed yourself to this risk as executor. The lender is going to be paid whatever the balance is as they, like any other creditors were first in line upon your husband's passing. The lender will get their money in full as they would have charges against the properties which are mortgaged I hazard to guess that you have put no charges or claims on the the property to cover your expenditure.

It raises the question of whether a copy of the will was given to the lender and and if any of the beneficiaries were of age as you may have needed to seek their permission to continue to manage the estate otherwise they can or should have requested a legal winding up.

There are certain statutes of limitations for creditors and beneficiaries. If memory serves, beneficiaries have up to 16 years in which to make a legal claim post probate and I think that it may be 6 years for creditors. However, in saying that the lender is not a normal creditor due to the charges on the property which remain until the debt is settled in full either as a transfer of debt to another lender or upon sale of the property.

Right now you are in a situation where you need to take on an accountant and solicitor to sort out where you stand and the final liabilities including tax. This brings in another issue, have you registered the estate with the inland revenue? because if you have kept the estate going you would need to have filled out the self assessments for estates and trusts for the intervening period from passing to date. Not only that, upon sale of the remaining assets of the estate HMRC will need to be informed and these are the question they will ask? Do you have an estate bank account, What is your estate tax reference and Have you filled out the Self Assessment forms for the years you ran and managed the assets after your husband's passing. This is where your real problem is going to come. You will need to tell them first or you will be in a heap of trouble. HMRC prefer you to bring you mistake to their attention rather than their finding out. So get a reasonable probate solicitor and accountant to get the estate accounts up to date and fill in the self assessment forms.

I have to say one thing don't panic, if you tell HMRC and they see that the estate has not made any money during that period you will not need to pay anything. Even when everything is wound up the original £250k Capital Gains rate at the time of passing still applies so you may still not have to pay anything unless the final disposal value after settlement of outstanding debt exceeds that amount.

Would I recommend going down the DIY probate route. No, no and thrice no. It is for the very brave, daft and completely broke so use a solicitor if you have the money. Believe me a solicitor is best equipped to ties up loose ends. Only if there is no other choice and be prepared for a difficult learning curve and pitfalls. You have quickly gain a basic understanding of inheritance and estate tax and management, probate law, legal rights of the deceased, their estate and your rights as executor. You must also have ability to manage and negotiate debt relief and if you have filled out a self assessment form it will be very handy and most of all be prepared for the personal pressure and distress it brings. There is a risk when you deal with the estate of a loved one their legacy becomes the problems they leave behind rather than the fond memories you had of them.