Not upheld: Mortgage administration / arrears handling complaint against Equifinance Limited

Decision detail

Summary

Mr S complained that Equifinance should not have issued a mortgage offer given the property's restricted title reflecting his siblings' beneficial interests. The property was registered in Mr S's name with a restriction protecting his siblings' 25% shares each. When Mr S's first solicitor advised that the restriction could be removed to enable the loan registration, Equifinance issued a mortgage offer on 12 April 2024. However, Mr S's second solicitor later advised that the restriction could not be removed and Mr S could not sign the standard legal charge due to a beneficial ownership clause. Equifinance refused to amend its standard legal charge, and the application did not proceed, leaving Mr S with legal expenses of approximately £1,200. The ombudsman found Equifinance acted fairly by relying on the first solicitor's advice and was not obligated to amend its standard terms when circumstances changed.

The Ombudsman's reasoning

The ombudsman found that it was Mr S's responsibility to ensure the property title was fit for the lender's security. Equifinance reasonably relied on the first solicitor's representation that the restriction would be removed, creating clear title. When the second solicitor indicated the restriction could not be removed and the legal charge could not be signed as drafted, the position had changed from what was agreed when the offer was made. Equifinance was not obligated to amend its standard legal charge on a case-by-case basis, and it was not Equifinance's role to advise Mr S or ensure his solicitor's proposed course of action was viable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website