Not upheld: Mortgage advice complaints complaint against Wave Lending Limited

Decision detail

Summary

Miss H and Miss M complained that Wave Lending Limited mis-sold them an unaffordable buy-to-let mortgage in 2007, arguing that the expected rental income did not cover monthly mortgage payments and that Wave's affordability assessment was flawed. Wave defended its position by noting the broker was responsible for the sale and the complainants self-certified their information. The ombudsman acknowledged that Wave knew rental income would not cover payments but found that the complainants also knew this and chose to proceed on independent broker advice. The ombudsman concluded that the complainants' failure to take mitigating action over 15+ years (such as selling the property or remortgaging) meant it would not be fair to require compensation, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman acknowledged that Wave knew the rental income would not cover mortgage payments and other costs, but found that the complainants also knew this from the outset and chose to proceed on independent broker advice. The ombudsman considered that the complainants had over 15 years to mitigate any unfairness by selling the property, remortgaging, or making a complaint earlier. The ombudsman concluded that the complainants' failure to take mitigating steps over such a long period meant it would not be fair and reasonable to require compensation, even if Wave's lending decision was questionable. The ombudsman also noted that property value decline was due to market conditions rather than Wave's actions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website