Not upheld: Irresponsible lending complaint against Rooftop Mortgages Limited

Decision detail

Summary

Mr L complained about a buy-to-let mortgage originated in 2007 by lender P (transferred to RML in 2016) for £111,000 on an interest-only basis. He argued the mortgage was mis-sold and irresponsibly lent based on property overvaluation and unaffordability. When the term expired in 2022, Mr L could not repay and proposed selling the mortgaged property at a loss, supplemented by a future property sale, which would still leave a £19,000 shortfall. RML rejected the proposals due to uncertainty and the remaining debt. The ombudsman found the original lending decision was fair under 2007 standards and that RML's rejection of the proposals did not constitute unfair treatment, as the lender was not obliged to provide indefinite forbearance.

The Ombudsman's reasoning

The ombudsman applied the lending standards and practices that were normal for unregulated buy-to-let mortgages in 2007, not modern standards. The lender was reasonably entitled to rely on a professional valuation from a qualified surveyor. The mortgage was self-certified, which was not uncommon at the time, and there was nothing in the paperwork to warrant further investigation. Regarding RML's post-term actions, while the ombudsman sympathised with Mr L's difficult circumstances, RML was not obliged to provide forbearance indefinitely. RML's rejection of the proposals was based on legitimate concerns about uncertainty and the remaining shortfall, which did not constitute unfair treatment. The ombudsman noted RML had been patient and largely supportive, with only one ill-considered letter for which it apologised.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website