PCA says that currently, when a borrower dies, the mortgage provider has a limited insight into the household circumstances and that can inadvertently lead to outcomes which are less than satisfactory.

Where amicable resolution cannot be achieved, lenders can be forced to exercise their rights to repossess the property if they perceive their loan to be at risk, PCA says. More often they continue to take payments without a new contractual relationship being in place while they provide extended forbearance to allow the deceased’s family members time to sell, or re-mortgage.

Aligning with the Financial Conduct Authority’s new Consumer Duty obligations, PCA’s new Probate Mortgage Resolution Service takes the time-consuming task of resolving the issue away from the lender.

It means that cases which previously may have taken years to resolve, or in extreme circumstances could have resulted in a home being repossessed, can now be resolved amicably producing better outcomes for all concerned PCA says.

The firm claims that in trials with a major national mortgage provider over the last two years, PCA’s Mortgage Resolution Service was able to resolve 93% of all referred cases, 60% of them within 12 months.

PCA chief operating officer Nick Cherry says that banks want to do the right thing by their customers, but often don’t know where to start: “Most have an initial period of forbearance where they try and resolve the situation themselves,” he explains, “and sometimes they are successful. But in many cases they hit a roadblock.

“Based on our experience, we believe there are at least £25m per month of mortgage accounts sat in this unresolved status beyond the lender’s initial forbearance period – that’s at least £300m per year where we believe our new product could add significant value. And the numbers could be higher.”

“Mortgage lenders invest heavily in long-term relationships with the customers and our Mortgage Resolution Service is an extension of that support when families need it most.  Bereavement is a difficult time for families, and there are many cases where a home, which is mortgaged by the deceased, is still being lived in by a relative or beneficiary and the mortgage payments continue to be paid. The challenge for the mortgage provider is in their obligation to deliver good outcomes to their customers without knowing who the ‘real customer’ is after the mortgage holder has died.

“We help facilitate those good outcomes, reaching out to the executors with a speedy resolution that wherever possible keeps a loved one in their home with a new mortgage from the lender that is set up with consideration of their own particular circumstances.”