Not upheld: Mortgage administration / arrears handling complaint against Intrum Mortgages UK Finance Limited

Decision detail

Summary

Mr and Mrs T complained about Intrum's handling of their mortgage in arrears, alleging the lender was stringing them along and never genuinely considered a shortfall sale. The mortgage had been in arrears for years and was transferred to Intrum in February 2023 when the property was in negative equity with Mr and Mrs T having moved out. Between May and August 2023, Mr and Mrs T explored various options including voluntary surrender and private sale with a shortfall agreement, but ultimately declined to proceed due to concerns about costs. Intrum commenced legal action in August 2023, obtained a possession order in October 2023, and the property was repossessed in January 2024 and sold in July 2024, resulting in a £68,000 shortfall. The ombudsman found Intrum acted reasonably by not pursuing legal action while alternatives were being explored and that the timing of legal action was appropriate. The only issue upheld was a minor administrative matter regarding bank statement format, for which £50 compensation was already offered.

The Ombudsman's reasoning

The ombudsman found that Intrum acted reasonably by not pursuing legal action during May, June, and July 2023 when Mr and Mrs T were exploring alternative options (voluntary surrender and private sale with shortfall agreement). The timing of legal action in August 2023 was appropriate as other options had been exhausted. The ombudsman rejected arguments that the son would have remained in the property longer, noting that vacant possession was required for voluntary surrender. The ombudsman also clarified that the Mortgage Charter's 12-month protection did not apply as the property was not Mr and Mrs T's home and the arrears predated the Charter's implementation. The only error identified was the lack of clarity about bank statement format, which Intrum had already acknowledged and compensated.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website