In the July/August edition of Ombudsman News, the Financial Ombudsman Service (FOS) gave details of some of the mortgage complaints it had adjudicated upon. Some of the cases are summarised here.
A man claimed his adviser had told him he had six months to ‘port’ his mortgage to another property, yet when he applied to do so two months later, the lender told him the deadline of one month had passed. The customer thus incurred extra fees and a higher interest rate via a new mortgage. The FOS found that the bank had given him incorrect information, and had taken an unduly long time in informing him of the change in the porting terms & conditions. The bank was required to pay the man the amount of his fee for the unsuccessful porting application, the fees for applying for the new mortgage and an amount equivalent to the difference in interest payments for the two deals over the next seven years.
A couple’s repayments were not taken by their lender for several months due to a system error, yet they refused to extend the mortgage term, in spite of the fact that the required repayments almost trebled. The FOS ordered the lender to extend the term by the amount necessary to make repayments affordable, and to pay £400 compensation for distress and inconvenience.
A woman’s application to extend the term of her interest only mortgage was declined as she was over the age of 65. However, she claimed that a member of the bank’s staff had previously informed her a 12 month extension would be permitted, and that she had assumed an extension would be granted and would thus not now be able to raise the funds to pay off the capital balance in time. She did manage to pay the capital just two weeks late, and then complained to the lender. During the FOS investigations it transpired that the member of staff had given incorrect information, in that being over 65 was not necessarily a barrier to extending the mortgage, unless this was also her intended retirement age. The FOS also believed that the bank had been slow to inform her of the rejection of her extension application, and that they should have attempted to reach an amicable solution rather than simply passing the case to the debt collection department. The customer was awarded £500 for distress and inconvenience.
A lender declined an application to port a mortgage, saying that the customer would not have been granted a loan for 4.5 times her salary under their new lending criteria. The FOS said that the lender was failing to apply the transitional provisions under the Mortgage Market Review rules, and that the firm should consider that approving the application would not have increased the customer’s repayments. The lender was forced to pay £200 in compensation and to consider the new application on its own merits. The customer was informed they could complain again if the application was declined.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.