Handing back the keys to a negative equity home

[hobbitum]

My DGF had a lifetime mortgage in negative equity. (I had a thread last year - he’d ignored it all for years).

He passed away and I am executor. I’ve applied for probate and had the first valuation on his flat this week.

With the negative equity and the poor state of the whole building, the (highly experienced) estate agent was aghast and actually said the best thing to do was “send the keys back and run”.

I’d be more than happy to do that. Looking further into it though I read lenders refuse this more often than not, and it drags on.

I’ll be getting some proper conveyancing advice of course, but in the meantime wondered if anyone had any experience of voluntary repossession, and what a mortgage lender will say yes or no to?

If the estate is insolvent then the debt dies with him , they can’t come after you for any balance
They would repossess the house and sell it
However if there are other assets in the estate the balance ,expenses etc would have to be paid to them from that
In the second case the risk of you simply hand back the keys is that they will charge for everything they do and it can be quite expensive

Refuse the executorship.

This sounds like no end of trouble.

Is it too late once you’ve started though?

No just resign.

I agree with a pp. You can relinquish the executorship and ask a solicitor to handle the whole thing.

Actually, thinking about it, is there any chance that he was mis-sold this lifetime mortgage, and that the lender was negligent in letting him borrow far more than he could ever repay? A solicitor could look into that as well.

And who pays the solicitor? Just relinquish

if you relinquish, you relinquish. You don't ask anyone to do anything, but its sounds like the OP has done stuff (intermeddled) and therefore I think can no longer relinquish.

Apart from this, the estate is really straightforward so I really hoped it wouldn’t be too much messing about. The more I read the less confident I am so at this point I definitely need more professional advice.

We certainly think this may be the case as nothing about it makes much sense. But it goes back a long time and I don’t know who could really be held to account. Worth a mention anyway, in the scheme of things.

You’ve applied for probate so presumably the estate is worth more than 5k. If you hand the keys back the mortgage company will sell it add any costs to the account and leave any shortfall. You aren’t liable for this as executor unless there are other money in the estate. You should contact the mortgage company and go from there. When you have already applied for probate it’s too late to relinquish as executor I’m afraid.

https://withfarra.co.uk/guides/renouncing-executorship

If you relinquish executorship, you relinquish the entire estate

Some general advice on voluntary repossession england.shelter.org.uk/professional_resources/legal/home_ownership/mortgage_debt/voluntary_sale_of_a_home_to_avoid_repossession