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Probate: handing keys to financial provider for loan that costs more than the propert

  • 05-02-2019 3:44pm
    #1
    Guffy
    Registered Users, Registered Users 2 Posts: 8,243 ✭✭✭


    There is a house valued at 100k in the estate with a mortgage of 200k attached to it from a financial provider (no life assurance attached to the loan).

    Is it possible to hand the keys of the property to the bank and walk away or is the administrator/ estate liable for the remainder of the loan also?

    We have a solicitor and will be exploring this avenue with them but I'm just looking for peoples thoughts (or experience) on this, not specific legal advice as we will be getting that from our solicitor anyway.


Comments

  • #2
    ArrBee
    Registered Users, Registered Users 2 Posts: 837 ✭✭✭ArrBee


    Is it worth seeing if the bank will write off 100k?

    Can't be many estates around with houses still valued at 100k....


  • #3
    CIARAN_BOYLE
    Registered Users, Registered Users 2 Posts: 14,599 ✭✭✭✭CIARAN_BOYLE


    I'd be shocked that the bank didn't force mortgage protection before granting the loan. The estate is still liable afaik but it would tend to be a pr disaster.


  • #4
    Guffy
    Registered Users, Registered Users 2 Posts: 8,243 ✭✭✭Guffy


    CIARAN_BOYLE wrote: »
    I'd be shocked that the bank didn't force mortgage protection before granting the loan. The estate is still liable afaik but it would tend to be a pr disaster.

    No mortgage protection unfortunately.


  • #5
    Johnny Red Cab
    Closed Accounts Posts: 128 ✭✭Johnny Red Cab


    If there is nothing in the estate they get nothing more than the house. The executor/administrator is not personally liable for any shortfall.


  • #6
    Johnny Red Cab
    Closed Accounts Posts: 128 ✭✭Johnny Red Cab


    CIARAN_BOYLE wrote: »
    I'd be shocked that the bank didn't force mortgage protection before granting the loan.
    What a lot of people were doing was to take out the insurance and then cancel it once they drew down the funds.


    The banks would very rarely follow up the cancellation of the insurance.


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  • #7
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    If there are other assets in the estate, they could be taken in satisfaction of the outstanding balance on the loan. The executor could be personally liable if they pay out to beneficiaries instead of clearing debts.


  • #8
    Credit Checker Moose
    Closed Accounts Posts: 1,226 ✭✭✭Credit Checker Moose


    Correct.


  • #9
    Guffy
    Registered Users, Registered Users 2 Posts: 8,243 ✭✭✭Guffy


    4ensic15 wrote: »
    If there are other assets in the estate, they could be taken in satisfaction of the outstanding balance on the loan. The executor could be personally liable if they pay out to beneficiaries instead of clearing debts.

    Thanks, this is what we figured alright.


  • #10
    Peregrinus
    Registered Users, Registered Users 2 Posts: 26,998 ✭✭✭✭Peregrinus


    4ensic15 is correct. Still, may be worth approaching the lender to see if a deal can be done, whereby they accept prompt part-payment of the loan in final settlement, leaving some assets to distribute to beneficiaries of the estate.

    This won't involve simply handing them the keys, though. It will involve the executor selling the house and paying them the proceeds (and possibly a bit more, depending on what else is in the estate, and how the bargaining goes.


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