Question
What is the name of your state? Cumbria, England
My mother bought her house 2 years ago and has recently died, we have recently found out that the bank allowed her to have a mortgage without any life insurance on the property although the banks web site clearly states security is required on a mortgage. I am her son, i am 19 years old and i am currently living in the property on my own. The bank is now threatening to reposess the house. Is this legal?
Answer
What is the name of your state? Cumbria, England
My mother bought her house 2 years ago and has recently died, we have recently found out that the bank allowed her to have a mortgage without any life insurance on the property although the banks web site clearly states security is required on a mortgage. I am her son, i am 19 years old and i am currently living in the property on my own. The bank is now threatening to reposess the house. Is this legal?
**A: response if the property was in the US; of course it is. There is no law requiring the mortgage company to insure the life of a mortgagor to protect their mortgage. Furthermore, it is easy to resolve the current issue; pay the mortgage.
Answer
I don't know about England, but in the US the only thing required is mortgage insurance (if there's less than 20% downpayment) and homeowner's insurance (for floods, fire, hurricanes, etc.) Life insurance isn't required but most people do buy life insurance when there's a big mortgage.
Did you inherit the house? If you have ownership of the house, the first thing you must do is: find out what the equity in the house is. If there is sufficient equity then you might be able to refinance the house to lower the monthly payments and even get some money back to tie you over until you figure out what to do. Another thing to do is get a second mortgage on the house, bring the payments current and try to sell the house.
If that doesn't work, then try renting out the rooms in the house for a few hundred a month to college students etc. to bring in some money. For ex: If there's 4 bds, rent out each room for $400-500 a month and live in the basement or attic and use that money to pay the mortgage. Can't be picky if you need the money.
Answer
What is the name of your state? Cumbria, England
My mother bought her house 2 years ago and has recently died, we have recently found out that the bank allowed her to have a mortgage without any life insurance on the property although the banks web site clearly states security is required on a mortgage.
In the US, the "security" on a mortgage IS the real estate. If one can't pay the mortgage, the bank gets their security, the real estate it secures, back. Nobody HAS to ADD additional life insurance to pay off a mortgage if they die BECAUSE the real estate normally covers the debt and then some.