Not upheld: treatment during arrears and financial difficulties; threatened legal action; refusal to modify mortgage terms complaint against The Stafford Railway Building Society trading as The Stafford Building Society (SBS)

Decision detail

Summary

Mr and Mrs B complained about SBS's treatment during their financial difficulties, particularly the threat of legal action and refusal to modify their mortgage terms. Their mortgage fell into arrears in September 2021, and despite five agreed repayment plans between 2022 and 2025, all were broken. SBS explored options including term extension, product changes, and capitalisation of arrears, but found none sustainable given Mr B's approaching retirement and Mrs B's unemployment. The ombudsman found SBS had acted fairly and reasonably in seeking court agreement for a formal payment arrangement given the persistent arrears and history of broken agreements, and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that SBS had explored all reasonable options available to Mr and Mrs B before commencing legal action, including extending the mortgage term (limited by Mr B's retirement age), changing mortgage products, and considering capitalisation of arrears. The ombudsman noted that Mr and Mrs B had been in arrears for years with no concrete improvement plan, had broken five separate payment arrangements, and had sometimes failed to engage with SBS. The ombudsman concluded that seeking court agreement for a formal payment arrangement was reasonable given this history, and that SBS had treated Mr and Mrs B fairly overall.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website